CorMedix Inc. (CRMD) September 2026 Conference Transcript

Good afternoon, everyone.

I'm Rahul Sood, Managing Director in the Healthcare Investment Banking Group at Wells Fargo. I'm joined on the stage today by, with Joe Tedesco, Chairman and CEO of CoreMedics. Joe, welcome.

Thank you. Good to be here, Raul.

Thank you. Thank you for being here. So why don't we get started? CoreMedics has seen a lot of change over the past couple of years. Take us through the journey. Where CoreMedics was in 24, where CoreMedics is today.

Well, look, I mean, I joined Cormedics in 2022, right? And we've changed significantly, right, since then. I joined a company that was pre-commercial, single product company, resolving a CRL, right? But had a great product in DefendCath with a really strong clinical proposition and a really, you know, unique reimbursement, right? This Tadapa reimbursement that can present some challenges. In 24, you know, we had gotten the product approved in late 23, but from where we were in 24, right, we were building out launch infrastructure. We were starting to commercialize the product. Only the first, well, not the first, only one of three Tadappa launches at the time. And I think what we made it was one of the first that was really truly successful over that two-year period of time where you have separate payment. And, you know, we leveraged that and that cash flow into the acquisition of Melinta and really built the company into a diversified, especially pharmaceutical company with a large deployment in institutional settings of care, right, and that being hospitals and fusion clinics, and we'll be entering into the hematology oncology space, hopefully with the approval of Rezao for an expanded education next year, but really built a more robust diversified Great.

You touched upon this, that you acquired Melinta. Your portfolio has gone from single product to eight marketed products today, sold in more than 500 hospitals, infusion centers, and clinics. How would you describe the commercial platform that you've built, and what does it let you do next?

Look, it's big and it's scalable, right, in terms of we are deployed in the inpatient space, right, in the hospital space. We have touch points into infusion clinics, right, and we're building touch points into the hematology, oncology, bone marrow transplant center space. So there's a lot of commonality amongst what I call institutional settings of care, particularly for injectable drugs in terms of how they're sold, how they're priced, how they're marketed, where you really don't need to necessarily focus just on a single therapeutic area to obtain some types of synergy. So look, we're focused on, one, executing on the assets we have in that space, but also looking to layer on additional assets that are synergistic with that field deployment.

You touched upon Melinta. That acquisition closed last year. So you've gone past the one-year anniversary mark on it. Can you review the rationale for that transactions? And how do you see that business position today for success?

And you're right. We just hit the one-year anniversary last week of the Melinta acquisition. And for us, it was really transformational. We were, as I said, in the midst of the first year of our Tadapo, driving decent cash flow, but knowing that we have this reimbursement transition and kind of wanting to parlay that cash flow and success into a more diversifying transaction. And Melinta gave us that. It gave us what I'll call a stable-ish-based business of institutionally utilized anti-infective drugs, drugs like Vabermir and medicine, as well as a potential future growth asset with Roseo, which we've just read out the phase three data for prophylaxis of fungal infections. So for us, I really see it as transforming the business and putting us in a much stronger position today than we were 12 months ago.

Got it. Let's switch gears on to DefendCath. You touched upon the Tadapa piece. That's something quite unique. Not a whole lot of drugs have gone through that reimbursement mechanism. You guys have done it quite successfully. It's been, DefendCath has been a driver for the business over the past couple of years. Can you discuss the shift now that you're going in this new reimbursement dynamic? And where do you see the business going over the next 12 to 18 months with that?

Yeah, so the shift that takes place is under Tadapa, this transitional drug add-on payment. You get 24 months or two years of separate payment, buy-and-build reimbursement, and it transitions into three years of a bundled add-on. And in the ESRD space, the dialys operators essentially get a fixed amount of money, right, for all drugs and services used in administering dialysis. And then they, for innovative drugs, they give an add-on payment for a period of time. So we're, you know, we're working through that transition right now. And our goal, when R to DAPA ended on June 30th and we moved into July 1, was to essentially preserve patient volumes. We had built up a good, in our mind, patient run rate. and we decided to really discount the price in order to make it more cost-neutral for the dials operators to maintain patients on therapy. And our expectation is that in 2027, the bundled add-on will go up from what it was calculated for the third and fourth quarter and we'll be able to get a little bit more price appreciation or, sorry, a little more profitability in 2027. Now, 12 to 18 months, there's a lot of moving parts for DefendCat and things that are going to impact kind of what the potential for DefendCat sales will be as we enter 2027 into 2028. Later this year, the ESRD final rule will come out from CMS. One of the aspects is the amount of money that will go into the bundle for 2027, but also how they elect to do the bundleized calculation. They had proposed to move from an annual to a quarterly. We're going to have to see what happens with that. A lot of public comment was submitted. Opposite of that, we're working very hard to obtain, with Medicare Advantage, separate reimbursement for DefendCath. We view this as the biggest untapped market potential for DefendCath patients. MA patients are more than half. Our estimate is around 60-65% of patients fall under Medicare Advantage. We think very few of our patients today are Medicare Advantage patients. We think most of them are fee-for-service. So if we're able to obtain separate reimbursement for that patient population, I think it'll set the product up well for better long-term viability as a value driver. I think it's also worth noting we did submit a second. We submitted two letters to CMS in the comment period on the ESRD proposal. Well, one was around the actual calculations of TADAPA itself and things that could be done longer term to benefit TADAPA. The other was very specific to DEFENCATH and their classification of DEFENCATH as an existing functional category under the PPS. They made that determination in 2024. When you actually look at how the functional categories are spelled out, there is no category for prevention of infections. because there's a category around treatment of fungal and bacterial infections, but we don't fall within that category. So we think the appropriate remedy would be for CMS to create a new functional category, which would, instead of a three-year Tadap, would require a permanent adjustment to the bundle that would provide more sustainable reimbursement. So we're working multiple angles to try to create sustainable reimbursement value for DefendCath and for the betterment of patients.

And can you talk a little bit of the timeline for these as well?

So the timeline for the ESRD final rule is likely late November. I think last year it slipped into December, but there was a government shutdown that kind of kicked everything out. So our expectation is at some point in November, the ESRD final rule would come out. On Medicare Advantage, these are large organizations that don't historically move quickly. I think we've made a lot of progress over the past several months. in, you know, one, getting buy-in on the formic economic and then clinical value proposition for Defend-Cath, and now really trying to work through operational aspects of what this could look like. So, you know, I like to say I'm cautiously optimistic. You know, we could have something by early next year, right, that's in place, but it's, we're trying to do something that's never been done, right, which takes something that's inside the bundle and then contract it for separate payment. We're also one of only a handful of Tadapa drugs, and we're the only preventative. So there's a unique value proposition for DefendCath in terms of eliminating cost from the system. The hospitalization costs, the infection costs, and those costs fall squarely on the MA plan.

Got it. Very helpful. You recently announced a pilot for DefendCath with the LDL. What could this mean longer term outside of just some of the other things that you just talked about?

Look, that's a good question, and that's something that we were really excited to finally get across the goal line, so to speak, in terms of having an agreement in place with this dialysis operator. They are the largest. They were one of the only top five that did not adopt the FENCAT during the two-year to DAPA period. So they've initiated a pilot that we believe is an operational pilot, not a clinical pilot. We'll be meeting with them later in the fall, and hopeful that this could turn into something that becomes a value driver, certainly from a volume standpoint, right? To drive value from a pricing standpoint, we're going to need some of those other things that I mentioned, whether it's, you know, a change in reimbursement on Tadapo or Medicare Advantage to kick in from a pricing standpoint. But, you know, we really see them as a meaningful validation of the clinical value that Defend-Cath brings to patients.

So I think you just touched upon this. it appears to me that now you have commercial supply agreements in place with all five of the largest dialysis providers?

That's correct.

In the U.S.? What should that tell investors about the value prop of DefendCath and how it sits as a standard of care?

Well, look, we've put out a treasure trove of real-world evidence that shows that this product absolutely works not just in terms of reducing infections, but it keeps patients out of the hospital. And that's the biggest source of savings for the payer. Now, unfortunately, traditional Medicare, Medicare fee-for-service patients, the framework is not there for separate contract negotiation for traditional Medicare patients. But it is there, or it is possible for Medicare Advantage, right? So that's why we're spending so many resources there, because the real-world evidence is compelling that this product absolutely works. We have more data coming out later this year in the fall in multiple settings of care, not just in outpatient hemodialysis centers, but also in the hospital inpatient setting. It shows that we have a material impact on infection rates.

So just staying on that topic, you had the U.S. renal care interim analysis, which showed a 72% reduction in catheter-related bloodstream infections and a 70% reduction in analyzed CRBSI-related hospitalizations. Pretty compelling data sets. How does that help you, and how does that help you in the conversations with the payers that you're going through?

It was really a needle mover at the beginning. That's actually what got us in the door, right? Because the real-world evidence, and it's not a small handful number of patients. It's been thousands of patients. And the way that the real-world evidence study was designed with U.S. renal care is a complete apples-to-apples. We took the same patients two years prior and then a year after, and were able to compare BSI rates on a patient-to-patient level and have a material impact on infections and hospitalizations. That can be directly translated A to B into savings. So Medicare Advantage knows exactly what they spend on each hospitalization on average and can actually look at the value of investing in prevention. So it's been incredibly helpful. Now, later this year, we're going to have the full, or U.S. Renal Care will be publishing the full data set for that interim period, as well as some other analysis that was done from a pharmacoeconomic standpoint on the benefits of the FENCAP in the outpatient settings. We're excited for both of those.

Let's switch gears a little bit and talk about the Reseo and the prophylactic. Can you, for audience's benefit, can you just quickly recap the data, the top line data that came out earlier this year? And I believe there's a full data set that will be coming out at a conference.

Yeah, I apologize. I didn't memorize the data, Raul. But look, we met the primary endpoint for non-inferiority versus standard of care. But more importantly, we announced certain secondary endpoints, which really had to do with safety of the drug in comparison to the standard of care. which are these azole, right, antifungal drugs. Now, why we're excited about Rosea, which is currently approved for treatment of candida-related infections. Now, that's a smaller total addressable market treatment, and the patient population is almost exclusively inpatient setting, which has some payer headwinds, right? You've got this DRG reimbursement that it can be a little bit of a headwind in the inpatient setting, but for prophylaxis, a large number of the, a large amount of the treatment opportunity is outpatient, which means buy and bill reimbursement. So you don't have that payer headwind. You have a large total addressable market in terms of total number of patients across multiple underlying conditions that have to get prophylactic antifungal therapy already. The standard of care are these azole antifungal therapies, which are known to have certain kind of safety side effects. They tend to be hepatoxic. They also have a large number of drug-drug interactions with other drugs that this patient population is taking. So we do see an opportunity for another entrant in this space that, and I believe that we've shown a better overall safety profile in the initial top-line data, and we do expect to have the full data set coming out in the fourth quarter of this year.

Can you talk about the potential market opportunity that you see here, which gets you excited?

Look, as we said, the TAM is significantly larger than in treatment, and the TAM spans both multiple underlying conditions, right, compared to just where we ran the clinical study as well as multiple pathogens, so to speak. So, you know, we have a good breakout of the TAM in our corporate deck. Now, the market for, you know, if you just look at, you know, apples to apples, the design of our clinical study, it's $500 million, right? It's a big market opportunity alone just where we ran the clinical study, which is patients with underlying hematological malignancies that are getting bone marrow transplant. As I said, we do see the market opportunity potentially broader than that. Ultimately, we have to see what the FDA label ends up being from a underlying condition standpoint as well as a pathogen standpoint. But by and large, because of the issues associated with the standard of care, where we see a lot of low-hanging fruit there just with patients for which the azoles are contraindicated.

Given how much clinicians weigh drug-drug interactions and toxin in this setting, can you just elaborate a little bit more on how do you see it as a fitting?

Well, look, I think it's going to matter. Regardless of label, even if you, as I said, if you just look at the low-hanging fruit, So I don't know ultimately how. So once we have the full data set out, the goal was to take that data and then go do another round of market research with the actual product profile and see, okay, how do we think this is, what this ramp is really going to look like and what uptake is going to be. But just looking at the number and the amount of patients or the percentage of patients for which existing antifungal therapy is discontinued because of toxicity or drug-drug interactions, you know, the feedback or the market intel we've seen is upwards of 15 to 20 percent, and depending on where the survey is done, have to discontinue this azol therapy. And there's a whole other slew of patients for which, you know, they don't even attempt azol therapy. That, to me, says there's a big market opportunity there, even if you're not the standard of care, right, to come out and, you know, establish a position in this space.

So, thank you. So the prophylaxis, this indication, could expand Rosario's addressable market roughly 8-4 from what I can see. And you're adding, I think you've said publicly, you're adding 15 to 20 commercial and medical positions to be ready for this. Can you just walk us through the launch prep and the path from the SNDA to an approval in the first draft of 2017?

Right. So, I mean, the activities we're doing now are, you know, more along the lines of staffing, right? So we've started to identify key roles and add on critical personnel that were going to be needed that either have those relationships in the BMT hematology space or deep expertise in that space. It's an incremental add-on from what we had. It's not a complete or large build, and I think we'll be ready in the first half of next year. As I said, we're also waiting for the full data set to be published. Unfortunately, because we are partnered with Mundi Pharma on this, and they're the global sponsor, we don't have unilateral control of how and how much data comes out into the public realm, but they are going to be publishing more data, upcoming medical conferences in the fourth quarter, and that'll give us the opportunity to have the full data set available to begin socializing with key opinion leaders. And that's really where, I don't want to call them pre-marketing activities, but we'll be doing additional market research, additional ad boards, and preparing for a rollout of the drug, hopefully in the second half of next year.

And the existing commercial infrastructure that you have in the hospital space, you can leverage?

Yeah, so we have a field deployment in the hospital inpatient space, in the infusion clinic space. We'll be pivoting some of that into the hematology-oncology infusion space, as well as the bone marrow transplant centers. Now, there's not a large number of BMT centers, so it's not that difficult to reach those locations with the same amount of headcount. We also have an inside sales team that's really effective at hitting white space, right? The areas where it's not cost-efficient to have a key account manager in that space but can do it remotely.

Got it. Very helpful. You talked about that Mundi Pharma is the partner. They own the rights for it. But if I understand it right, the ownership of the USMDA transfers to CoreMedics on approval of the prophylactic SNDA. How meaningful is it for CoreMedics to own and control the US asset outright?

Well, look, I think it's meaningful to the extent that we have control and we are the primary mouthpiece then with the agency or with anyone else. I think we've been fortunate that Moneyform is a good partner, that as we've gone through this process in terms of compiling the SNDA, they've taken our feedback, and we'll see how, as we go through, hopefully, label negotiations with FDA that we can get to a place where we're all happy with the final label. Got it.

Can you talk us through the other key products that are in your portfolio and any key trends that you're seeing in those franchises?

Yeah, well, look, as part of the Monta transaction, as I said, we diversified the business and we brought in what I'll call a stable-ish based business of some anti-infective drugs. The two largest being Vibomir and Minicin from a revenue standpoint. and they provide good durability with very little SG&A required to kind of maintain those market opportunities. One of the products I think we're excited about for next year is Commercin, which is a long-acting anti-infective, one of only two drugs in the class. The other drug, Dalvance, went generic last year. We do think there's going to be a relaunch opportunity from a promotional standpoint, the drugs on the market, middle of next year with the infusion clinic space. So we're going to look for that to be a catalyst going forward in the future as well. And we also have a drug like Bextella, which is a fantastic broad-spectrum antibiotic that is partnering with BARDA in a biodefense collaboration. And I think we're hopeful that down the road that could lead to a stockpile. So I think there's some other good kind of hidden value drivers in that moment of portfolio.

How should investors think about the durability of the portfolio that you have with DefendCath, with the portfolio that came from Alinta? Just to remind the audience, Pazio has patent exclusivity coverage out to 2038. And I believe the other brands that you, the other products that you have, they're all into 2030s.

Well, look, DefendCath's durability has very little to do with IP. It's all about reimbursement and what we're able to do from creating sustainable long-term reimbursement for that product. And that will really guide what durability this product can have in the upcoming years. From an IP standpoint, it's got data exclusivity to 2032, patent protection into the 2040s. And we're not aware of anyone actively working on development at this time. Rosario as well, long data exclusivity, long IP. I think the shortest term is really medicine, which has an LOE date in 2031. And then drugs like Vabamir, the API is incredibly difficult and expensive to develop and make. We're not aware of any DMFs that have been filed for Vabamir. Same with the Ritavansin. Very difficult and expensive to make. So I think we're hopeful that in addition to the IP that's out there, there's a little bit of a technological moat around those.

Got it. Can you talk a little bit about the Cormedics today? You've got a strong presence in the hospital with the portfolio you have. You've got DefendCath, which has an application inside the hospital, but also in the dialysis centers. How do you view Cormedics five years from now in terms of the portfolio composition and what else you may do versus where it is today?

Look, I think we've been pretty vocal about what we're looking to do in terms of building this business with add-on or tuck-in business development that's highly synergistic either with the field deployment in hospital, in the infusion clinic space, you know, hematology, oncology. Institutional settings of care focused on largely injectable drugs, I think, is what we're focused on. And from a deal-type standpoint, we're looking for things that are either commercial or very close to commercial, things that are going to be near-term accretive and drive value from shareholders where we can extract commercial synergy and leave it there.

And in terms of the scalability of this platform, that you already have a big footprint within the hospital, how scalable is it if you're adding one, two, or three more?

We've got capacity for more products, right, and the typical field team can handle multiple products in the bag. Now, I think a great example would be our strategic investment in Telfer, right? We've taken a minority stake in Telfer. We have a right of first negotiation to acquire that company after its phase three data readout, which will either be late this year or early next year. And, you know, that's a product that's used exclusively in a hospital ICU center. We would not need to add any additional boots on the ground to commercialize that product. So those are the types of things that fit very well, I think, within the portfolio.

Very well. You reported about $260 million in cash June 30th for Q2. You just talked about business development as not the only pillar, but one of the pillars and avenues for growth. Can you talk a little bit about the capital allocation in terms of these priorities?

Yeah, so look, I think we were pretty active early in the year in terms of stock repurchasing when we were trading where we were. We're sitting here today over $300 million in cash on hand. We'll report a number later on. but you know we're focused right now on building dry powder for business development that's really kind of the core focus you know in addition to the cash that we have on hand we've got good debt capacity on the balance sheet right now the ability if we found the right synergistic deal we could add a turn or two of debt right to to kind of increase our funding capability and we can certainly supplement that you know with with equity possibly depending on on where we where we're trading and how we think about the specific deal.

There's a very strong free cash flow generation at the company. You generated about 100, just a tad shy of $130 million in the first half. A little bit more than $275 million of adjusted EBITDA over the past, over the trailing 12 months. You talked about the share repurchase, the $75 million that was authorized. How do you view the buybacks against the business developments?

Well, look, I think we continue to evaluate the buybacks as we go based on where the stock is trading and what we see. As I said, we were active in the early part of the year. The focus right now is on building dry powder and looking for business development opportunities that are going to provide longer-term strategic value to the shareholders.

Can you talk about what an ideal next deal for Codemetics? could look like in terms of therapeutic area, stage size, I understand the hospital.

Well, if I'm going to create a perfect world. Yeah, let's talk about that. It's something that is commercial, fits very well, likely with Roseo in the prophylaxis indication. I think that's, or it could be with the hospital and patient deployment. Something in those two spaces that already comes with an established revenue position, but we do think we can get additional growth, that's a perfect world. In an even more perfect world, maybe it's got a pipeline asset attached to it that's ready to be approved. I don't have a crystal ball or a magic wand, right? I can't create that out of thin air. But, you know, we would try to find deals that replicate some pieces of that, right? And see, you know, we've got a pretty big business development funnel and a lot of things that are under valuation right now. And, you know, hopefully we can get, you know, something across the goal line in the near term.

Got it. What are your thoughts on the key milestones for quarter medics over the next six months, 12 months, that we should be looking out for?

Look, we've got a few, right? So first, you know, I know we announced that we were intending to submit the SNDA in the third quarter, but shareholders should be looking for an announcement around an acceptance for review. We won't ever comment on when something's submitted, but rather when FDA accepts it for review. and gives us a target action date. I think we have real-world evidence coming out later this year around the FENCAP that that's going to be pretty exciting and compelling. As I said, we're working with Medicare Advantage plans and hopefully can get something that we can announce publicly that I think can move the needle. But, yeah, I think those are kind of the near-term catalysts in the next six months.

Got it. Any last takeaways that you would like to leave the investors with?

Look, I'm excited about where we are. We've got a really strong balance sheet. We've got robust cash on hand as to the ability to add more. We've put a really strong team in place, both from a leadership standpoint as well as from a sales and operational and medical deployment standpoint. And we can layer more assets onto this organization and continue to build for the future.

Wonderful. Any questions from the audience? Joe, thank you so much for joining us.

Thanks for having me, Roy.