CRMD

Good morning, and welcome to the CorMedix first quarter 2026 earnings and corporate update conference call. Today's conference call is being recorded. There will be a question-and-answer session at the end of today's presentation, and instructions on how to ask a question will be given at that time. At this time, I would like to turn the conference call over to Dan Ferry from LifeSci Advisors. Please go ahead.

Good morning, welcome to the CorMedix first quarter 2026 earnings and corporate update conference call. Leading the call today is Joe Todisco, Chairman and Chief Executive Officer of CorMedix, he is joined by Liz Hurlburt, EVP and Chief Operating Officer, and Susan Blum, EVP and Chief Financial Officer. In addition, Beth Zelnick Kaufman, EVP and Chief Legal and Compliance Officer and Corporate Secretary, Mike Seckler, EVP and Chief Commercial Officer, and Dr. Matt David, EVP and Chief Business Officer, are also on the line 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 1995.

These statements are statements other than statements of historical fact regarding management's expectations, beliefs, goals, and plans about the company's prospects and future financial position. Actual results may differ materially from the estimates and projections on which these statements are based due to a variety of important factors, including the risks and uncertainties described in greater detail in CorMedix's filings with the SEC, which are available free of charge at the SEC's website or upon request from CorMedix. CorMedix may not actually achieve the goals or plans described in these forward-looking statements, and investors should not place undue reliance on these statements. CorMedix 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 are provided in CorMedix's earnings release in the current report on Form 8-K filed with the SEC. This information is also available on the investor relations section of CorMedix's website. At this time, it is now my pleasure to turn the call over to Joe Todisco, Chairman and Chief Executive Officer of CorMedix. Joe, please go ahead.

Thanks, Dan. Good morning, everyone, and thank you for joining us on this call. CorMedix is entering 2026 with strong momentum across our core priorities, delivering durable DefenCath utilization growth, advancing high-value pipeline opportunities, and driving meaningful profitability and cash generation. These elements together form the foundation of our long-term value creation strategy. We announced this morning the first quarter net revenue of $127.4 million, significantly above street consensus and adjusted EBITDA of $70 million. Susan will provide more granular details of first-quarter financial results, but I am proud of the team's execution, which led to this fantastic performance.

As a result of our Q1 performance as well as other market intelligence, we are increasing our full-year financial guidance for net revenue from the previously announced range of $300 million-$320 million to a revised range of $325 million-$345 million. The increase in guidance reflects strong first-quarter execution and continued confidence in underlying demand trends while incorporating expected variability in DefenCath sales in the second half of 2026 as we transition through reimbursement dynamics. We're also raising our full-year adjusted EBITDA guidance from the previous range of $100 million-$125 million to a new range of $115 million-$135 million.

DefenCath variability in the back half of 2026 is the result of the expiration of our initial TDAPA reimbursement and the transition to the post-TDAPA add-on phase of reimbursement by CMS. Based on the current CMS calculation methodology, the company expects a significant increase in the post-TDAPA add-on amount in 2027 compared to the second half of 2026, which is expected to produce a higher net selling price per unit in 2027 compared to our current estimates for Q3 and Q4 of this year. Our primary objective for Q3 and Q4 is to maintain or grow existing patient utilization heading into 2027.

Based upon our first quarter performance and feedback from existing customers, we are raising our full-year DefenCath guidance from the previously announced $150 million-$170 million range to a new range of $175 million-$195 million. This guidance is based on existing customer run rates and does not include potential upside from new customers or any new volumes that result from potential successful contracting with Medicare Advantage, both of which we are actively working hard to pursue. Despite pending TDAPA expiration, we continue to see DefenCath evolving into a standard of care therapy within its target population, supported by strong clinical value and increasing adoption.

It's worth noting that our three current largest customers for DefenCath have either recently published or presented information demonstrating the positive clinical impact that DefenCath has had on their patients' infection and/or CRBSI-related hospitalization rates, or made similar public comments related to the positive impact DefenCath has had in their clinics.

In addition to strong Q1 financial performance, we were also excited to recently announce the preliminary top-line clinical results from the ReSPECT study, a phase III clinical study evaluating REZZAYO for the prophylaxis of invasive fungal disease in adult immunosuppressed patients undergoing allogeneic bone and marrow transplant. As Liz will explain in more detail, we believe the top-line results position REZZAYO to become an attractive option for clinicians for prophylaxis of IFD, and we will now begin to work together with our global partner to prepare for FDA submission of the sNDA in the second half of this year and plan for a potential commercial launch in 2027.

With respect to commercial readiness and as we begin to prepare our commercial infrastructure for a potential launch of REZZAYO for prophylaxis, we expect to incur incremental spend in the back half of this year, including the anticipated addition of between 15 to 20 incremental headcounts across both commercial and medical. This increase in resources and operating spend is reflected in our full-year cash OpEx guidance of $145 million-$160 million. As a reminder, our cash OpEx guidance excludes non-cash charges such as stock-based compensation. I'd now like to turn the call over to our Chief Operating Officer, Liz Hurlburt, to provide an update on clinical activities. Liz, please go ahead.

Thank you, Joe, and good morning, everyone. As Joe mentioned, we were delighted to announce preliminary top-line results of the ReSPECT study at the end of April. The ReSPECT study met its primary endpoint for the FDA of fungal-free survival at day 90, showing non-inferiority versus the standard antifungal regimen with 60.7% fungal-free survival at day 90 for REZZAYO compared to 59% for the standard antifungal regimen, or SAR. Importantly, we believe top-line results demonstrate that REZZAYO has comparable efficacy to SAR against invasive fungal infections from all three measured pathogens, Candida, Aspergillus, and Pneumocystis. In addition, results showed a favorable profile in multiple secondary endpoints, most notably treatment-emergent adverse events leading to dose reduction, interruption, or withdrawal of study drug and study discontinuation.

As we've stated previously, the objective with the ReSPECT study was to show comparable efficacy to the standard of care while also demonstrating a better overall safety profile with regard to drug-drug interactions and toxicity. We believe this study has achieved that objective and that the results position REZZAYO as a differentiated prophylactic therapy with a meaningful commercial opportunity. It's important to remember that this was a global study conducted by our partner, Mundipharma, who owns global IP rights and will pursue regulatory approvals outside of the U.S. Mundipharma is currently the holder of the U.S. NDA filing and, under the terms of our agreement, transfers ownership of the NDA to CorMedix following approval of an sNDA for the prophylaxis indication. The parties must work together on the publication of data and any submissions to the FDA.

Currently, the parties expect to hold a pre-NDA meeting with the FDA in the coming weeks and to submit the sNDA in the second half of 2026. Shifting gears to our phase III TPN study, despite efforts to increase study enrollment, total enrollment remains at about 1/3 of the total number of patients needed for an interim analysis of 90 patients. The adaptive design of the Nutri-Guard study allows for a minimum of 90 and a maximum of 200 participants based on the incidence rate of CLABSI. An interim assessment will be made by the Independent Data Monitoring Committee after 15 participants have experienced a CLABSI event. In addition, cumulative infections have shown to be lower than our pre-study estimates, which also impacts our statistical projections for study timing. Based on these two factors, study completion timing is now trending into 2028.

We are actively taking steps to accelerate this timeline. Most importantly, we intend to open additional clinical sites as well as submit a protocol amendment to the FDA, which, if approved, should support expanded inclusion criteria and broader enrollment. We will continue to update on progress as we move throughout the year. I would now like to turn the call over to Susan to discuss the company's first-quarter financial results and financial position. Susan?

Thanks, Liz, good morning, everyone. We are pleased with our first quarter results, which reflect strong execution across the business and the benefit of the contribution from the acquired Melinta portfolio. As a reminder, because the Melinta acquisition closed in August 2025, the first quarter of 2026 includes a full quarter of Melinta operations, while the first quarter of 2025 does not. Accordingly, year-over-year comparisons are heavily weighted by the broader product portfolio and relative cost structure of the combined company. We also filed our Form 10-Q this morning. I encourage you to review it for additional detail and important disclosures. Turning to the numbers, first-quarter 2026 net revenue was $127.4 million, compared with $39.1 million in the first quarter of 2025.

First quarter revenue included $97.5 million from DefenCath and $29.9 million from the Melinta portfolio. The year-over-year increase was driven primarily by higher sustained DefenCath demand, including the impact of sales to our largest dialysis customer that we onboarded mid-last year and the addition of Melinta revenue. First quarter DefenCath sales benefited from a non-recurring $9 million favorable change in estimate related to certain sales allowances, primarily Medicaid rebates and product returns, as noted in our earnings release. Even excluding this change in estimate, our net revenue was above consensus for the first quarter of 2026. Operating expenses were $41.5 million in the quarter, including $7.2 million in R&D, $12.5 million in selling and marketing, and $21.7 million in G&A.

The increases versus the prior year period reflect the larger combined company, including higher personnel-related costs, more robust commercial and IT infrastructure, and a greater level of development activity across the broader portfolio, including a focus on pediatric programs and a biodefense indication for Baxdela, many of which are partnered with BARDA. We are also subject to higher branded prescription fees attributable to the addition of Melinta's commercial products, as well as to year-over-year product sales growth. Year-over-year increases in OpEx were also driven moderately by moderately higher legal fees and our continued investment in the development of DefenCath for the TPN indication.

On the bottom line, we recorded net income of $38.6 million or $0.48 per basic share and $0.43 per diluted share, compared with net income of $20.6 million or $0.32 per basic share and $0.30 per diluted share in the first quarter of 2025. In addition to net revenue and operating expenses, EPS was impacted by non-operating expenses of approximately $25 million associated with the routine quarterly mark-to-market of marketable equity securities and contingent consideration, which reflects the approximate fair value of the future milestone and royalties payable to former Melinta shareholders, as well as income tax expense under U.S. GAAP. On a non-GAAP basis, adjusted EBITDA was $70 million for the quarter, compared with $23.6 million in the first quarter of 2025.

This EBITDA metric excludes one-time acquisition-related and reorganization costs, stock-based compensation, and the non-recurring revenue adjustment this quarter. It provides additional insight into the strength of our core operating performance. A reconciliation to the most comparable GAAP measure is included in this morning's earnings release. We ended the quarter with $178.1 million in cash and cash equivalents, excluding restricted cash. During the quarter, we generated cash from operating activities of $42.4 million, which was impacted by large incentive rebate payments made to customers during the first quarter. You'll note a related and significant decline in accrued expenses of approximately $50 million from December 31, 2025, to March 31, 2026, on our balance sheets.

Cash flow from operating activities was partially offset by $11.1 million used in cash to repurchase shares under our stock buyback program, driving a $33.3 million increase in cash during the first quarter. We continue to believe we are well-positioned with a strong balance sheet to support our operating priorities and growth initiatives. Now I will turn the call back to Joe for closing remarks. Joe?

Thanks, Susan. I'm very excited about where the company is today and where we have the potential to go. CorMedix has entered 2026 with strong momentum across all three pillars of our investment thesis. First, DefenCath continues to exceed expectations despite pending TDAPA expiration, demonstrating strong underlying utilization demand, which we believe positions itself well to become a durable cash-generating franchise post-TDAPA. Second, we're advancing a pipeline of high-value late-stage opportunities, including REZZAYO for prophylaxis and DefenCath and TPN, which could meaningfully expand our long-term revenue opportunity.

Third, we've delivered significant profitability and cash generation over the last year, allowing us to reinvest in growth as well as shareholder value creation through stock repurchases while maintaining financial flexibility. We remain confident in the outlook for this year and our path to future growth and sustained profitability. We'd now like to open it up for questions.

We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please take up your handset before pressing the keys. If at any time a question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Jason Butler with Citizens. Please go ahead.

Hi. Thanks for taking the questions, and congrats on the quarter. Wondering if you could comment on the trend in revenue that we should expect to see for DefenCath for the second quarter. Obviously, adjusting for the one-time $9 million benefit, should we expect a consistent net price? Are you expecting demand growth? To any extent you can comment, what are your updated thoughts on the guidance you gave for DefenCath in 2027? Thank you.

Thanks, Jason. Appreciate the questions. I think a couple of things to think about when you're thinking about DefenCath through 2026 to start. You know, first, we did have the $9 million good guy right in the first quarter, that's kind of a one-timer. For the second quarter, and I know we mentioned on the last call, it's really, for us, a kind of a two-month quarter, because as we move into June and given the price dynamic that's gonna take effect on July 1, we're gonna take a decent shelf stock adjustment in the month of June. Right now, you know, we're accruing for that at about four weeks of stock, as our largest customer typically holds about four weeks.

Some customers hold a little less, maybe we end up having some favorability there. We're assuming it's going to be a two-month quarter and expect it to be in the range of about $60, right? Give or take a couple of million. You know, for the back part of the year, I think you can kind of just break out the rest of the guidance and spread it across Q3 and Q4, you know, for the back part of the year. For 2027, as we mentioned in the script, we expect to see appreciation in the net selling price as we move into 2027 compared to the third and fourth quarters.

You know, right now I think I'm comfortable saying we're affirming the guidance we put out previously for 2027. It's a little bit premature, right? We'd like to see how we move through the year into the third and fourth quarter, and would love to be in a position later this year, early next year, to take that guidance upwards. I think I'd wanna reiterate that, you know, as we mentioned, neither guidance really includes, you know, upside from anything we may do with Medicare Advantage or onboarding, right, potential new customers.

Really helpful. Thanks, Joe. Can I just quick follow-up, the TPN trial? Can you give us any more color on the changes in the exclusion/inclusion criteria and how that both changes your view on enrollment, but also the patient profile that you'll end up with in the study?

Look, and I'll let Liz comment in a moment. I don't think the patient profile changes during the study, and I really don't wanna put out specifics of what criteria we've asked. We've simply asked the FDA to amend.

I think, Jason, right, these are really medically complex patients. I think we did a solid job in estimating the number of infections we anticipated them to have. When you look at the overall pool of TPN patients, there's really subgroups and subpopulations within that. The actual group of eligible patients is smaller, and there are a lot of logistical challenges that we've seen with them because they are so medically complex. We are asking the FDA to take a look at the inclusion criteria to see if we can be a little bit more generous with it without compromising the data. I think until we get feedback on that amendment, we're gonna have to stay quiet on the specifics of it.

We're hopeful, obviously, that enrollment would re-accelerate if that amendment goes through, so that we can include, you know, more TPN patients that maybe do have some additional comorbidities going on as well.

Yeah. I think it's also worth noting, right, when you have a projection like this on study timing, it's a moment in time, right?

Yeah.

You know, to the extent we are able to, you know, increase enrollment, you know, those timelines can shift, you know, pretty quickly.

Appreciate it. Thanks for taking the questions.

Thanks.

The next question comes from Roanna Ruiz with Leerink Partners. Please go ahead.

Hi. Morning, everyone. A couple from me. First on DefenCath. I noticed you talked about increasing customer run rates. I was curious if you could elaborate a bit more on that, and are there any strategies that you wanna use going forward to keep bolstering it?

Sure. Thanks, Roanna. Yeah, I think when I said increasing run rates, we saw a little bit of an uptick from Q4 to Q1 in terms of utilization, and that was nice to see. That was not something that was in our initial guidance or budget. We're happy to see that patient numbers continue to grow. You know, what we're doing going forward is a lot of the initiatives we talked about, specifically with outreach to Medicare Advantage, and opening up that patient pool. You know, right now, based on, you know, data we see, we think we've, you know, most of our patients, the overwhelming majority, are Medicare fee-for-service. Probably more than 90% of our patients are in Medicare fee-for-service.

That's a big opportunity over the long term, would be in Medicare Advantage.

Yep. Got it. I have a follow-up on the TPN study. With the amending of the protocol, does that impact the statistical plan at all? Could it actually impact the future label? Are there any steps you're taking to ensure tight trial execution going forward as you expand?

Sure. I'll take on the trial execution. I pride us that we run these studies in-house. We've got a really robust team that is on top of all of the details of execution on this. Couple of things, right? We are adding additional sites in the U.S. We have five additional sites in Turkey being activated over the next 45 days, we expect to see some enrollment there. In terms of the statistical plan, yes, there would be changes to the statistical plan if the amendment is approved. I do not anticipate potential label changes. I would say it's really premature to comment on what the label is because data guides the label.

That being said, you know, the intent of the study and what the projected label that we are working towards would be for risk reduction of CLABSI in adult patients with TPN.

I think that would remain the same. Depending on the additional populations, that could be included in it, that could potentially expand, but we need to wait for feedback from the FDA.

The next question comes from Leonid Timashev with RBC Capital Markets. Please go ahead.

Hey, guys. Thanks for taking my question. You know, now that you have the top-line REZZAYO data in hand, I'm just wondering if you could comment on some of the assumptions that you had made before around payer negotiations, expectations for pricing, and if there's any early feedback you've gotten from KOLs, as you sort of discuss the data and what your expectations are for utilization. Thanks.

Thanks, Leo. Just a couple of things. The full data has not yet been published, right? We've put out a press release in combination with our partner, Mundipharma, that announces some of the top-line results. In the upcoming months, we're gonna be working with Mundipharma to get a more full data package made public. At that time, we'll be able to have conversations with KOLs around the specific data. We're not really in that position today to have those conversations yet and then really start talking or doing a lot of the things that we're going to be doing around market research for pricing and penetration assumptions.

I'd say later this year, we can probably give a little bit more color on that.

The next question comes from Les Sulewski, with Truist Securities. Please go ahead.

Hey, this is Jeevan on for Les. Thanks for taking our questions. First one is what specific customer or payer actions have followed the recent positive real-world data for DefenCath? separately, where do you think based on the data you have right now, where do you think REZZAYO could have the most launch friction? You know, if you think about hospital protocols, pricing, or generics.

Yeah, I think I'm going to start with the REZZAYO question. I'm going to kind of defer to what I had said to Leo, is that it's, you know, we need to have substantive conversations once the full data is made public with key opinion leaders and take feedback. We'll be in a position to do that in the next couple of quarters, and by the end of the year, be in a better position to kind of give directional guidance of how we think, or the direction of the TAM and potential peak sales, maybe by the end of the year. On your first question, I just want to make sure I understand what you had asked. You asked if the real-world evidence has had any customer or feedback impact.

Is that what you'd asked?

Yeah, just positive developments on the customer or payer front after the.

Yeah.

-publications.

Well, look, I mean, it's been positively received all around, right? Not just on the real-world evidence that U.S. Renal Care has published, but our other customers as well. You know, IRC has put out some public information around the significant impact that DefenCath has had in their clinics. Fresenius has made public statements right on their recent earnings call about the value of DefenCath in their clinics. We're happy about what we are seeing play out in real time from a clinical standpoint in terms of the utility of the product. We are using all of that information in discussions. When you talk about payers, it's really Medicare Advantage, right? We're using all of that information in our ongoing discussions with the MA plans.

The next question comes from Brandon Folkes with H.C. Wainwright. Please go ahead.

Hi, thanks for taking my questions, and congrats on a really good quarter. You know, maybe just one from me. You know, given the success of REZZAYO and prophylactic, do you still place a high priority in bringing in additional assets over the next 12 to 18 months? You know, it seems like Teflaro will read out in potentially late 2026 or 2027. Has the bar changed in terms of bringing in additional assets, given that the internal opportunities are a lot more de-risked, given the positive REZZAYO data from you? Thank you.

No, I mean, I wouldn't say it changed. I'd say it's actually the other way, right? I think it's actually even more important to find things that are complementary to where, you know, we potentially see REZZAYO sales deployment, right, in those hematology oncology clinics, bone marrow transplant centers. Looking for products that could potentially be complementary in that space is definitely a priority.

Great. Thank you very much.

The next question comes from Serge Belanger with Needham & Company. Please go ahead.

Hi, good morning. A couple of REZZAYO questions from us. The first one, I know we have a pre-NDA meeting planned ahead of a potential sNDA filing in the second half this year. Just curious at this point, if you expect that you'll require more than the trial generated in the ReSPECT trial to file the sNDA. You expect coming out of the pre-NDA meeting, you'll have some clarity on what the potential label expansion could look like. Thank you.

Look, I'll let Liz give, you know, her feedback. I think from a label standpoint, we won't have that feedback, right, until later on in the process. I think in terms of, in terms of your first question, that's really what the pre-NDA meeting is for, Serge. It's to kinda get confirmation from the FDA that, you know, the data that we have, you know, in terms of the ReSPECT study, and other supportive data, is sufficient, right, to support the submission of the NDA. Anything to add?

Yeah, no, I would agree. Just again, you know, Mundipharma is a marketing authorization holder here. They are leading regulatory activities at this point, in concert with us. I would say, you know, once we have initial meetings with the FDA and get that feedback, the team will certainly strategize on next steps, but it would be premature to comment on the label, certainly before the full data set is available.

The next question comes from Jason Kolbert with D. Boral. Please go ahead.

Hi, guys. A couple of questions. I'm struggling a little bit on the DefenCath guidance and the numbers. If I take the 97 and I subtract the one-time payment, and I kind of annualize that out for the rest of the quarters, I come very close to the full year guidance without the Melinta product. I'm trying to understand how much of the quarter number is inventory versus how much is real use, and what's the normalized run rate for DefenCath in these patients?

Jason, I think I really addressed this with Jason Butler's first question from Citizens. I guess first you have to understand the nature of TDAPA, right? Our TDAPA is going to expire on June 30th, which is going to move us into a bundled payment system for Q3 and Q4. As we have said on previous calls, we are going to take some price erosion in Q3 and Q4 with the goal of maintaining patient volumes. When you talk about inventory, the inventory turnover is pretty quick, right? You know, at most, as I said, our largest customer, we believe, holds about four weeks of stock on hand. Others are in the two to three week range.

You know, the reason why you can't just straight line, right, the 88 across is because, as I said, the second quarter, we're gonna have that shelf stock adjustment in June, right? We expect utilization to remain, you know, pretty strong. It will take some price erosion in the set in June, right, in advance of moving into the back part of the year. Right? That's kinda how, you know, you should think about the guidance. In 2027, right, as we said, we expect to kinda step back up in price across the same utilization, which will produce a higher revenue amount in 2027. You know, that's how you should be thinking about DefenCath trajectory.

Okay. I mean, I'll continue to look at the numbers, but it still seems like a pretty big drop-off is gonna be required in order to stay in your guidance, not go above it. Can you talk about the tax rate, too? I was surprised. The tax rate seemed pretty high. Were there not a lot of offsets applied to it? What's the normalized tax rate going forward?

Our tax rate is essentially the statutory tax rate, the federal rate, plus a blended rate for state taxes. The GAAP rate is just that. It's about 28%. If you look at the tax expense compared to operating income, you exclude the non-cash mark-to-market of our marketable equity securities and the market-to-market of our contingent consideration, it's about 20%. That is a GAAP rate. We do have significant tax attributes, most prominently NOLs that will reduce the taxable income that we pay, the taxes that we pay. The GAAP rate you can think about it as a statutory rate. We don't have a lot of transactions that result in permanent differences.

Okay. Thank you so much. Congratulations on the numbers.

Thank you.

This concludes our question-and-answer session. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.