CorMedix Inc. (CRMD) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary provides mixed signals. While there are positive aspects such as potential revenue growth from REZZAYO and DefenCath, and expected synergies from the Melinta acquisition, there are concerns about increased operating expenses and lack of clear financial guidance for 2026. The Q&A session reveals some uncertainties, particularly around pricing dynamics post-TDAPA and exact utilization figures for DefenCath. These mixed elements suggest a neutral sentiment, indicating the stock price may remain stable over the next two weeks.

Key Financial Performance

Revenue $104.3 million, a year-over-year increase of $77.5 million. This growth was driven by faster-than-expected adoption by DefenCath LDO customers, utilization growth from the existing customer base, and partial quarter contribution from the Melinta portfolio assets.

Net Income $108.6 million, compared to a loss of $2.8 million in the third quarter of 2024. This improvement was largely driven by a substantial tax benefit of $59.7 million due to the realization of deferred tax assets, equating to 100% of CorMedix's historical net operating losses.

Adjusted EBITDA $71.8 million, up from a loss of $2 million in the third quarter of 2024. This reflects the momentum of operations and excludes one-time acquisition-related costs, stock-based compensation, and the tax benefit realized this quarter.

Operating Expenses $42.6 million, compared to $14.1 million in the same quarter last year. The increase of $28.5 million includes nonrecurring costs of $12.7 million associated with the Melinta acquisition and integration, as well as severance costs. Other increases were driven by stock-based compensation, operating expenses from Melinta's business, and increased R&D investment for expanded indications of DefenCath.

Cash, Cash Equivalents, and Short-term Investments $55.7 million at the end of the quarter. This reflects the timing of financing and acquisition activities, including a $150 million convertible debt offering and $40 million in common stock issued to fund the Melinta acquisition.

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Operating Highlights

Acquisition of Melinta Therapeutics: CorMedix acquired Melinta Therapeutics in a cash and stock transaction, creating a diversified specialty pharmaceutical company with a broad portfolio of commercial and late-stage pipeline products.

Rezzayo Phase III ReSPECT study: Enrollment for the global Phase III ReSPECT study evaluating Rezzayo for prophylaxis of fungal infections in allogeneic bone marrow transplant patients has been completed. Top-line data is expected in Q2 2026.

DefenCath expansion: DefenCath is being expanded into the prevention of CLABSI for adult patients receiving total parenteral nutrition (TPN). Phase III completion is anticipated by late 2026 or early 2027.

Revenue growth: Record revenue of $104.3 million in Q3 2025, driven by DefenCath sales and partial contribution from Melinta portfolio assets. Full-year revenue guidance raised to $390-$410 million.

DefenCath adoption: Faster-than-expected adoption by DefenCath LDO customers and utilization growth from existing customers contributed significantly to revenue.

Integration of Melinta operations: Integration of CorMedix and Melinta operations progressed faster than expected, with $30 million of projected $35-$45 million synergies expected to be captured by end of 2025.

Rebranding: CorMedix rebranded as CorMedix Therapeutics, unifying all employees under the new name and adopting a new logo.

Real-world evidence study: A real-world evidence study for DefenCath in collaboration with U.S. Renal Care entered its second year, with interim results expected by the end of 2025.

Strategic investment in Talphera Inc.: CorMedix made a minority investment in Talphera Inc., gaining a foothold in a late-stage critical care product. CorMedix has a right-of-first negotiation to acquire Talphera after Phase III results in H1 2026.

Focus on antifungal prophylaxis market: Rezzayo is positioned to address a $2 billion market for immune-compromised patients undergoing antifungal prophylaxis, with potential to become a new standard of care.

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Risk or Challenges

Integration of Melinta Therapeutics: While the integration of Melinta Therapeutics has progressed faster than expected, there are still ongoing challenges related to systems integration, which is expected to complete in 2026. This could potentially delay operational efficiencies and synergies.

Post-TDAPA pricing and Medicare Advantage engagement: The company is working to finalize supply pricing with customers and engage with Medicare Advantage payers for the post-TDAPA add-on periods starting in July 2026. Any delays or unfavorable outcomes in these negotiations could impact revenue and profitability.

Phase III clinical trials and regulatory approvals: The success of the Phase III ReSPECT study and Nutri-Guard clinical study is critical for future growth. Delays in trial completion, regulatory hurdles, or unfavorable trial outcomes could significantly impact the company's strategic objectives and market opportunities.

Supply chain and operational integration: The transition of DefenCath promotion to an internal field organization and the integration of supply chain operations pose risks of disruption, which could affect product availability and customer satisfaction.

Dependence on DefenCath and Rezzayo: The company's financial performance is heavily reliant on the success of DefenCath and the anticipated approval and adoption of Rezzayo. Any setbacks in these areas could adversely affect revenue and market position.

Economic and market conditions: Unfavorable economic conditions or changes in market dynamics could impact customer adoption rates, pricing negotiations, and overall financial performance.

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Guidance & Outlook

Revenue Guidance: The company has raised its pro forma combined full-year revenue guidance from a minimum of $375 million to a range of $390 million to $410 million.

Adjusted EBITDA Guidance: Pro forma fully synergized adjusted EBITDA for 2025 has been increased from a range of $165 million to $185 million to a new range of $220 million to $240 million.

Synergy Capture: Approximately $30 million of the projected $35 million to $45 million of total synergies are expected to be captured on a run rate basis before the end of 2025.

Talphera Investment: CorMedix has made a strategic minority investment in Talphera Inc. and anticipates Phase III results in the first half of 2026. The company has a right-of-first negotiation to acquire Talphera following these results.

DefenCath Utilization: Planning with customers for the post-TDAPA add-on periods, expected to begin in July 2026, is underway. The company is working to finalize supply pricing and engage with Medicare Advantage payers.

Rezzayo Phase III Data: Top-line data for the use of Rezzayo as prophylaxis of invasive fungal infections is expected in the second quarter of 2026. The total addressable market for this indication is estimated at more than $2 billion.

DefenCath Expansion: Phase III completion for the prevention of CLABSI in adult patients receiving TPN is anticipated by the end of 2026 or early 2027. The total addressable market for this indication is up to $750 million.

Real-World Evidence Study: Interim results from the real-world evidence study on DefenCath are expected by the end of 2025, focusing on its effects in reducing catheter-related bloodstream infections and associated costs.

Integration Progress: Systems integration from the Melinta acquisition is expected to complete in 2026. The unified sales organization will begin supporting all portfolio products in early Q1 2026.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:On DefenCath, do you have a sense of inventory stocking versus utilization in 3Q, and how should we think about potential seasonality throughout the year?

A:Smaller customers hold about 2-3 weeks of inventory, while LDOs hold 3-4 weeks. There was a couple of million dollars shipped at the Q3 cutoff that could have been captured in Q4. There is no significant seasonality in the DefenCath business, and the Melinta portfolio also lacks significant seasonality. Opportunities for cohort expansion exist, particularly with Medicare Advantage patients.

Q:Is the real-world evidence mutually inclusive with agreements on final pricing around the post-TDAPA period?

A:Real-world evidence is most applicable to Medicare Advantage, which can contract separately. Traditional Medicare pricing is determined by the ESRD final rule. The company plans to use data to argue for the value of prevention to Medicare Advantage plans.

Q:How has the use been in terms of the number of patients and the type of patients that the LDO has been using the product in?

A:Utilization has been faster than expected, with significantly more than the initial target of 6,000 patients. Most patients are likely Medicare fee-for-service, with opportunities in Medicare Advantage.

Q:What can we expect from the real-world data coming at the end of the year?

A:The year 1 results will include data from approximately 2,000 patients, double the Phase III LOCK-IT study. It will cover reduction in CRBSI, hospitalizations, missed treatment sessions, TPA utilization, and antibiotic use, compared to historic infection rates.

Q:How should we think about the second half '26 revenues and pricing dynamics post-TDAPA?

A:There will be price compression as pricing shifts from ASP to post-TDAPA add-on. The final ESRD rule will determine the calculation for utilization. The company is prepared to work around the framework once finalized.

Q:What are the goals of discussions with customers into the post-TDAPA period, and what data are being used?

A:The company is using real-world evidence data to demonstrate the impact on the healthcare system. Anecdotal feedback from customers indicates noticeable reductions in infection rates.

Q:How are you viewing the DefenCath inpatient opportunity, and how do you expect it to progress in '26?

A:Inpatient growth has been steady but smaller compared to outpatient. Starting next year, the new combined field team will promote DefenCath in the inpatient segment, which offers higher revenue per patient.

Q:How are you thinking about the investment in Niyad?

A:The company sees Niyad as a good fit with its commercial infrastructure. While some marketing investment may be required, it aligns well with existing call points.

Q:Can you provide an update on the pricing of DefenCath over the third quarter?

A:Pricing has slightly eroded quarter-over-quarter due to agreement structures, but volume growth has offset price changes.

Q:Are you aware of any legislation bills in Congress that could modify the TDAPA reimbursement?

A:A bipartisan bill proposed by Senators Booker and Blackburn could expand ASP-based pricing from 2 to 3 years and make the post-TDAPA add-on permanent, among other changes.

Q:What do you think is misunderstood regarding the Melinta transaction, and why are investors not crediting its value?

A:The Melinta base business provides a stable revenue base and risk mitigation. Rezzayo prophylaxis has significant growth potential, and TPN offers opportunities outside hemodialysis. These growth drivers are not being fully appreciated by investors.

Q:Review of Unclear Management Responses

A:Management avoided providing specific financial guidance for 2026, including clarity on back half '26 revenues and pricing dynamics post-TDAPA. They also did not provide exact patient numbers for DefenCath utilization or detailed stratification data. Additionally, they did not comment on specific pricing for DefenCath in Q3 or provide a definitive investment plan for Niyad.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

CRMD Transcript

CorMedix Inc. (CRMD) Q3 2025 Earnings Call Transcript

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The earnings call summary reveals strong financial performance, with significant cash flow improvements and decreased marketing expenses. The guidance for DefenCath sales is robust, and the Melinta acquisition offers growth potential, especially with REZZAYO. Despite some uncertainties in integration costs and competitive pressures, the overall sentiment is positive. The Q&A section highlights confidence in growth drivers and minimal concerns about risks. The company's strategic focus on growth and market expansion, along with a positive sales outlook, supports a positive stock price reaction.

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Positive5-6

The earnings call summary highlights strong financial performance with a net income of $20.6M and a significant improvement from a net loss in the previous year. The company's revenue guidance and cash position are robust, with positive feedback from customers on product integration. However, there are operational and clinical development risks noted, but these do not overshadow the strong earnings and optimistic guidance. The Q&A section reveals management's confidence despite some uncertainties. Overall, the positive financial results and guidance suggest a likely stock price increase in the short term.

CRMD Report

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