Hi, good morning. Welcome to Needham's 23rd Annual Healthcare Conference. I'm Serge Belanger, one of the healthcare analysts at Needham, and we're happy to have for next session, Joe Todisco, the CEO of CorMedix. And, I think this is a very timely, fireside chat for the company, given that, they're getting ready for, sorry, an imminent, product launch in the coming weeks. So I'll hand it over to Joe, and he'll provide an overview of the company before we jump into, questions. Yeah, thanks, Serge. It's great to be here. Yeah, as you mentioned, so, CorMedix is a or has been a development-stage biotechnology company. We received FDA approval for our first product, our lead product, DefenCath, this past November. DefenCath is the first and only catheter-lock solution ever approved by the FDA. The product is an antimicrobial catheter-lock solution. It's a combination of taurolidine, our proprietary new chemical entity, and heparin. The product was approved by FDA to reduce the occurrence of catheter-related bloodstream infections in the limited population of hemodialysis patients that are receiving hemodialysis through a central venous catheter. So that approval came in this past November of 2023. And we are expecting to launch on the inpatient market side in, in, on April 15th, and then later on the outpatient market segment, this July. And the timing around those dates are driven by the effective date of reimbursement. Most of the patients associated or in our target patient population fall under Medicare. We expect to have. We have inpatient reimbursement already in place, so that's guiding our launch on April 15th. We expect to have outpatient reimbursement in place by July. What is unique about DefenCath and the key component API, taurolidine, is that taurolidine is a non-antibiotic antimicrobial, right? So it has broad-spectrum activity against Gram-positive and Gram-negative bacteria, as well as fungus. But it doesn't demonstrate any or has not demonstrated any antimicrobial resistance. So that's from an antibiotic stewardship standpoint, right, incredibly important, from a public health standpoint. So, Serge, I'll pause there and see what you know would you like to lead the discussion. Yeah, so maybe let's talk about CRBSIs, how much of an issue they are, and what is currently done to minimize them or avoid them? Sure. Well, look, catheter-related bloodstream infections are a significant problem in the hemodialysis setting, as well as broadly, you know, across different, therapeutic settings within healthcare. But, you know, our indication is focused specifically in hemodialysis patients that have a central venous catheter. In that patient population, these infections happen incredibly often. About a third of hemodialysis patients with a CVC will experience a CRBSI. They happen incredibly fast. Most of these infections happen in the first 90 days that a catheter is inserted in the patient. And they kill at an alarming rate, you know, 15%-25% of the patients that contract a CRBSI will ultimately die from that infection. Now, what is being done currently? You know, there are a number of initiatives in place in terms of cleanliness and hygiene that steps being taken to try to mitigate these infections. Despite existing remedies or either preventative or treatments for infection, the infections still occur at a very high rate, and they still kill at a very alarming rate. We are the first and only FDA-approved catheter-lock solution for the reduction in risk associated with catheter-related bloodstream infections in hemodialysis patients. We're excited about the opportunity that we have to launch the product in the coming months. Great. I think in the past, you've highlighted the market opportunity here is kind of separate into two segments. There's an inpatient and outpatient segment. I think it'd be worthwhile to highlight, you know, the details and what those segments look like. Sure. So the inpatient market segment, it's smaller from an aggregate vial standpoint, but likely larger from a patient standpoint. You know, upwards of 5 million patients a year receive dialysis while in the hospital, some for a few days, some for several weeks. Most of those, about two-thirds of those patients, are in for something called acute kidney injury, right? So they may not necessarily have end-stage renal disease. They have acute kidney injury. But they are still susceptible while they are there. They're getting hemodialysis through a catheter. They're exposed to the risk for infection. And then you add on to that a percentage of end-stage renal disease patients that have to be dialyzed when they are admitted for any condition, right? They have to receive their dialysis in the inpatient setting. So that market is sized at around 4 million vials, right? You know, just under 4 million, as I think our corporate presentation is posted. You know, 3.8-4 million vials is how we size that market. On the outpatient side, most end-stage renal disease dialysis sessions take place in the outpatient setting. You know, we've sized that market at around 37 million-45 million vials. I like to say 40, you know, for it to be a nice round number. About 40 million vials on the outpatient side, about 4 million vials on the inpatient side. Now, from a reimbursement standpoint, both of these are reimbursed fairly differently. You know, when a patient is admitted for an inpatient stay in the hospital, typically, and these are mostly Medicare patients that we're dealing with in both settings of care. Typically, the facility gets reimbursed what's called a DRG, a diagnosis-related payment. It's a lump-sum payment. It covers all goods and, you know, all services and drugs used to treat that indication. But we've secured something called a new technology add-on payment, an NTAP, which adds on an additional payment for the inpatient facility for utilizing DefenCath for patients that are there getting hemodialysis. On the outpatient side, we expect to have something similar. Now, let's just take a step back. On the inpatient side, our NTAP, because of our QIDP status and the innovative nature of the product, we were able to apply for our NTAP before we had our NDA approval secured from FDA. So we already have that NTAP in place, and that's why we're able to affect our inpatient launch on April 15th. Now, on the outpatient side, we weren't able to apply for reimbursement until we received the NDA approval. So two components were required. The first is a J-code. We need a J-code for outpatient reimbursement. We applied for that in December. I'm happy to say the CMS granted that on April 2nd. So we have our J-code in place. What we now need is approval of our TDAPA application. We submitted our TDAPA application in January. You know, our expectation, and we've received written feedback from FDA that they're working toward, you know, provided they approve the application, they're working toward an implementation of July 1st for that TDAPA. So that's what's guiding the timing around our outpatient launch. OK. I wanted to drill down a little more on both segments. I'll start with inpatient. You mentioned about the opportunity of about 4 million vials. So maybe if you could just walk us through, like, what I don't know if there's a typical case of a patient coming into the hospital. How long would they stay, and how many vials they, you know, they could see? So I mean, I can tell you we based our NTAP on the average patient getting about 19.5 vials over a 13-day stay. And I think that's, you know, in our 10-K filing in terms of how we, you know, we estimate. Now, obviously, there's going to be patients that are there for a couple of days, and then patients that are there for several weeks, right, if they're being hospitalized. So I don't know that I can walk you through, all right, a typical case patient as if it were, like, a migraine drug, right? You know, migraine patient, that kind of thing. But what I can say is about two-thirds of those patients are there for acute kidney injury. Some, you know, they may not necessarily have end-stage renal disease, but they end up being dialyzed for, you know, for a week, two weeks, three weeks while they're in a hospital stay. And then you do have very sick end-stage renal disease patients that are hospitalized often and need to be dialyzed. And they are, you know, about half of those patients are deemed by physicians to be the highest risk for bloodstream infections. Yeah. The NTAP reimbursement is obviously designed to cover some patients that stay for 13 days or some that stay? Well, there's specific requirements around when a hospital can apply for it and how they get reimbursed NTAP. As long as they utilize one vial of DefenCath, theoretically, they can apply for the NTAP, provided that the DRGs for that disease state have been absorbed, right? So they need to absorb the DRG and then utilize the drug for overage. OK. So I think you've said April 15th is, I guess, a week from now is when the sales force gets deployed and the product becomes commercially available? Well, the sales force has already been deployed. So we, you know, we got approval in November. We did our hiring over the course of December and January and early February. We held our sales training meeting and launch meeting at the end of February. And we've really had the team out in the field since in March. And, you know, as we've talked about kind of publicly on the last earnings call, you know, on the inpatient side, the ramp's going to be, you know, slower, right? So hospital facilities, there's a process, a P&T process, that can take anywhere from three to nine months. You have to work through the P&T for each independent health system. And then, you know, as they adopt, right, and they edit on formulary, it'll get implemented into the guidelines. You know, we expect over the course of 2024 and early 2025 to be working through those P&T meeting processes and getting the product into adoption. I know we're still on the inpatient side, but this is a little bit of a contrast with the outpatient side, who I expect to be more of a kind of a stepped growth, right, where as a facility comes online, you're getting probably more meaningful pieces of business in chunks, right, that'll come and grow in chunks. Whereas I expect a little bit more of a steady ramp on the inpatient side from a utilization standpoint. OK. So when you do present the product and, I guess, the value proposition of DefenCath to a P&T Committee, how do they evaluate it? Do they spend some time? Well, if they're going to look at the criteria, they're going to look through they're going to make a medical determination. They're going to look through the clinical results. They're going to look at the health economic data that we provide, you know, our kind of cost offset model and some of the other information that we provide to them so they can make a risk-cost analysis and benefit for their patients and make that determination. You know, we feel pretty good about the case that DefenCath makes, an incredibly strong Phase III clinical study, right, demonstrated a 71% reduction in risk associated with CRBSI in the hemodialysis patients with CVCs. So, you know, I think we've got there's a lot of compelling reasons, I think, for institutions on both the inpatient and outpatient side to adopt the product. When the product gets through the P&T Committee, does this decision to use it come down to the hospital, or it's on a physician basis? You know, there's the expression, if you've seen one IDN, you've seen one IDN. I think some of the health systems are very top down, right, where they're very centralized control. Others give a lot more freedom to the hospitals. But ultimately, you know, there will have to be some level of hospital-specific interaction, right, where, you know, we have to make sure from a pull-through standpoint that it gets into the guidelines in that facility and they're compliant with the formulary decisions at the upper level. Got it. OK. But I think what is different here compared to, let's say, a retail drug for any therapeutic space, it's from an infrastructure standpoint, we obviously have a very lean team, right? We've talked about having about 30 key account managers, key account directors. It's much more of an institutional contracting type discussion as opposed to the traditional medical rep that has to go into the office, promote the product to the doctors, and get a prescription written for a unique patient, right? We're looking at it from a key account standpoint where if Hospital A adopts for their patients that are getting hemodialysis through a CVC, that's not going to require each individual nephrologist to make a determination for patient A, B, C, D, and E, right, kind of thing. Yeah. OK. So like you mentioned before, the sales force has been deployed, and they've obviously had discussions with P&T committees at this point. And some of them. Look, we've got some meetings that are scheduled in April and May, hoping to get more on the docket across all of those months, right? There's a time lag, right? We cannot take a product to P&T Committee with an institution. An internal sponsor or champion, a doctor within that facility, has to make the request to bring it to P&T. And those are the types of interactions that we're working on now and hopefully to get more advocates and more health systems and build momentum as the year goes on. OK. And then obviously the outpatient segment a little later, you mentioned July once TDAPA comes online. Well, we're hoping, look, the expectation is that TDAPA comes online in July. You know, CMS, as they said, they told us in writing, they're working toward a July effective date. So hopefully, that all occurs. And yes, so that's guiding the timing around July. OK. But you feel pretty confident about a TDAPA decision? Well, I feel pretty confident. The The J-code was approved on time with no issues, right? We do have some other correspondence in writing from CMS where they do believe the product is eligible for TDAPA. So absent, I think, a request for any more information, I think I feel pretty confident that we meet all the criteria. Yeah. That makes sense. And like you mentioned, this is a much larger opportunity, about 10x what the inpatient vial volume is, at least from a vial perspective. But it's much more concentrated just because there's a couple of large operators, right? Look, you've got two large operators that are exceeding 80% share. Then you've got another kind of three that are also not as large as the top two, but get you to probably about 90%. And then you've got a large number of smaller operators that make up the bottom 10%. So yeah, you do have two kind of mega buyers that are, so to speak, very meaningful. Is contracting kind of the way in here, contracting with these? Oh, absolutely. That's a big part of the focus and discussions that we're having now. That's part of it. But they also do have a P&T process themselves. They make a medical determination. They make a cost determination, cost-benefit. And I'm not going to comment on any specific customer discussions, but we're actively engaged across both therapeutic settings with multiple customers currently. We were happy to announce this morning our first commercial partnership signed with ARC Dialysis, one of the fastest growing dialysis operators in the Southeast U.S. And hopefully, we look at it as kind of we just laid a keystone, right, in terms of building a foundation. We've laid the keystone. Now let's build upon it. Yeah. Going back to that partnership, it's a five year commercial supply agreement. I guess how does that work in terms of do they have certain volumes they need to meet? Well, look, I'm not going to comment on specific provisions of the agreement. You know, those are somewhat confidential. But as I said, we're happy that ARC has come on board as our first customer. Hopefully, I think it shows that the interest they have in doing the right thing for patients. And I'm excited for where we're going to head. OK. So we should expect additional partnerships to be announced? Well, that's ultimately our goal. Yeah. Yeah. OK. Once you sign these partnerships up, should we assume that these will start using the product right away, or they still have to go through the evaluation process? Well, look, obviously, we've signed ARC. I think what you should assume is that there'll be some ramp, right, for implementation. But we've signed it early enough where, hopefully, by July, they can kind of hit the ground running. We're kind of thinking about outpatient adoption and kind of how they step it internally within their own systems, whether it's ARC or any other outpatient. I do think they'll likely start with the fee-for-service patients where TDAPA is attached. We actively are engaging with a number of Medicare Advantage plans, as well as commercial plans. I think as those, hopefully, as plans come online, we'll see expanded utilization into other patients with different insurance. OK. Fee-for-service is about 40% total of ESRD patients. Medicare Advantage is another 40%. Then you've got commercial and Medicaid making up the bottom 20% and DOD, VA. Yeah. And then reimbursement process here is very different than the inpatient one. Maybe just talk about TDAPA. Well, it's an add-on payment to a bundle. It's a different add-on payment, right? But it's a similar structure to an NTAP payment, essentially, where CMS for fee-for-service patients is providing a meaningful add-on payment to the dialysis provider for utilization of DefenCath. Now, they've expanded TDAPA from two years to five years. The first two years is essentially a separate payment. And then years three, four, and five is more of a bundled payment that has some price erosion built in in years three, four, and five. We've established our pricing structure to account for that framework upfront. So I think longer term, when we talk about inpatient versus outpatient, I think the inpatient side will see a little bit more pricing stability from a long-term standpoint compared to outpatient. I think there'll be meaningful value in the long term on both segments, but higher margin, likely, on the inpatient side than the outpatient side. Are the dialysis centers, they have a lot of experience with TDAPA? I mean, a lot. I mean, I think there's only been four or five products that have received TDAPA, right? So that's certainly something that we are working. We're establishing a reimbursement call center for, not for patients, but for institutions that need advice and guidance on how to process these TDAPA claims and NTAP claims as well. But that's part of the expectation. There's definitely going to have to be some reimbursement education as this evolves. This is going to work concurrently with the J-code, right? They're both kind of hand in hand? So you need a J-code. A J-code A J-code is an HCPCS code that you get from CMS, which you need for any type of outpatient claims processing, right? So you could not utilize the product in an outpatient setting without the unique J-code, which we did get last week. Now, they'll attach a modifier to that that presumably allows for the TDAPA add-on payment. Got it. OK. Let's assume July 1, TDAPA. You get good news from FDA. I assume it's going to be right, CMS. You'll be ready to deploy at that point? Well, we are ready to deploy. I mean, we're having those discussions. I've got inventory manufactured, ramping up more through the back part of the year, certainly being able to fulfill more than just what we see as our base case from a revenue standpoint, being prepared for upside. But yeah, everything's firing right now. All right. Good. Maybe just remind us of the IP around DefenCath, whether you have any exclusivities. So we have 10 years of statutory market exclusivity under which the FDA cannot approve a competing generic product for 10 years. five years of that is new chemical entity. five years is QIDP. We have a couple of patents that are Orange Book-listed, one of which has an expiration date that goes beyond that 10 years, goes out to 2042. It's a formulation patent with some interesting claims. We believe it provides some meaningful protection from an IP standpoint. From a statutory exclusivity standpoint, there's also the potential to get another six months of exclusivity for conducting a pediatric hemodialysis study. OK. So that takes you out beyond 2042. So very long runway. Well, no, that doesn't go beyond 2042. We have the 10 years that goes 2023 to 2033. You get an extra six months on that exclusivity. We have a formulation patent that goes to 2042. Now, generic competitors may try to challenge that patent. We don't know what'll happen in the future. They can't even attempt to file an application for another couple of years. Statutorily, they could not get approval till the end of the 10 or 10 and 1/2 years. OK. I think in the last quarterly update, we started discussing potential label expansion opportunities. You can just talk about it. I know you're going to be meeting with the FDA. I think that's going to be pretty determinant on what. So I'm just going to meet with the FDA and see if we want to have a post-approval discussion around label expansion. We're not going to communicate too much about it right now, what the plans are. Hope to have that meeting by mid-year. And then we'll communicate what we can after that, right? So we've talked publicly about where the opportunities are, whether it's in TPN, some sections of oncology. We think there's potentially value. We need to have the FDA kind of buy into our development program, which will be kind of multi-stepped. In a perfect world, you would go to the FDA and say, hey, can I just get an indication for use in all catheters everywhere? But you can't really design a study that fits within FDA frameworks from that standpoint. You have to, obviously, be very methodical about how you design an expansion, get FDA's buy-in on those plans, and then you proceed. Yeah. I mean, you still need to talk with the agency. But would a development path ideally look similar to what was done with DefenCath for? Look, I would say we hope not, right? I mean, that was a very extensive, large Phase III clinical study. I think our hope is to be able to expand label into different therapeutic areas with less of a large-scale clinical study. But we can't control what the FDA is going to ask for. So I'd say step one is we're having this discussion with FDA mid-year. The focus that is a focus, right? The focus is on launching DefenCath in the hemodialysis segment and building that, recognizing we do have time. While we want to make sure that we take the right course of action and don't rush into anything prematurely. Okay. From a manufacturing standpoint, I don't think you're dual-source at this point. But the plan is to be there. So the plan would be to get Siegfried up online by the end of this year, right? We're currently single-source with Rovi as the finished dosage manufacturer. Great relationship, great manufacturer. We're building all of our launch stock from there. But getting Siegfried online is our backup site, hopefully, by the end of the year. OK. Let's just cover financials in terms of last reported cash balance and kind of your OpEx expectations. Well, look, so I think the last reported cash balance is around $76 million, $77 million. We've guided for the first time ever. We've given guidance, right? We've given some OpEx guidance going forward, between $15 million-$18 million a quarter. And we've also said we think we can get to run rate break-even by the end of the year, right? That's if you look at kind of December exit, December 2024, from a cash flow standpoint. So that's our base case. We still kind of maintain. I haven't seen anything to deviate from that base case so far. Sorry. Go ahead. Yeah. I mean, obviously, sales is going to be back-end loaded through the year. So I guess the second half is when that profitability target comes into focus. Yeah. So I think we haven't put any revenue guidance out there, but said, obviously, second quarter will be somewhat light, right? We're not expecting a huge amount of sales. I don't expect to kind of stuff the channels, so to speak, or stock the channel, so to speak, in the second quarter. But we'll see a little step up, hoping to see a step up in third quarter and then again in the fourth quarter. And by the end of December, as I said, the expectation or the hope is to get to cash flow break-even on a run rate basis. Yeah. This is not a one-time cash flow break-even. It's going forward on a steady basis. Well, hope to then continue to grow from there. That's the expectation. Good. All right. Just to finish off, at this point, getting ready to launch, what do you think is the most misunderstood or underappreciated aspect of the CorMedix story or DefenCath? Well, I think in terms of misunderstood, we're in a challenging environment from a therapeutic standpoint. It's not one of the therapeutic categories that's typically talked about, like oncology or neurology, right? There's a lot of acronyms associated with our reimbursement. We've got NTAPs. We've got TDAPAs. They're each unique. They're add-on payments. So I just think what's misunderstood is that it's atypical of the normal, let's say, oncology buy-and-build drug that investors are a little bit used to. So I think we do have a compelling kind of value proposition that maybe is not fully appreciated. And I think we just need to execute on our side. And we've certainly been doing that over the last 12 months with getting approval. We got our J-code. We're now in the process of launching. We signed our first commercial supply agreement with ARC. And I think we'll continue to build from there. OK. All right. Well, thanks for spending time with us this morning and talking about CorMedix and the upcoming DefenCath launch. All right. Thank you. Looking forward to hearing more news on product update. All right. Sounds good.