CorMedix(US:CRMD)2024-10-30 16:32Financial Data and Key Metrics Changes - The company's net revenue for Q3 2024 was $11.5 million, exceeding Street consensus, driven largely by the initial anchor customer, U.S. Renal [8][19] - The net loss for Q3 2024 was approximately $2.8 million or $0.05 per share, compared to a loss of $9.7 million or $0.17 per share in Q3 2023, indicating improved financial performance [19] - Operating expenses increased by approximately 33% to $14.1 million in Q3 2024 compared to $10.5 million in Q3 2023, primarily due to higher selling and marketing and G&A expenses [19][20] Business Line Data and Key Metrics Changes - DefenCath's commercial launch has seen significant progress, with the first full quarter of product shipments and outpatient utilization [7][8] - Selling and marketing expenses increased 66% to $6.7 million in Q3 2024, while G&A expenses rose 76% to $6.6 million, reflecting increased marketing efforts and personnel costs [20][22] - R&D expenses decreased by approximately 73% to $0.7 million due to the approval of DefenCath, with costs related to medical affairs now recognized in selling and marketing or G&A expenses [21] Market Data and Key Metrics Changes - The company has secured agreements with two midsized dialysis operators and one large-scale operator, which will provide access to DefenCath in roughly 60% of U.S. dialysis clinics [8][12] - The company expects to operationalize agreements with new partners and commence purchases before the end of Q4 2024 [9][10] Company Strategy and Development Direction - The company is focused on expanding the utilization of DefenCath among existing customers and onboarding new ones, while also exploring opportunities to expand the product label beyond hemodialysis [24] - The company plans to submit a refined clinical protocol for adult total parenteral nutrition (TPN) to the FDA by mid-November, aiming for FDA approval by late 2027 to 2028 [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving EBITDA positivity in Q4 2024, despite variability in revenue guidance due to the timing of purchases by new customers [10][24] - The management noted that the initial rollout of DefenCath has been protocolized, indicating a top-down approach in outpatient settings, which is expected to lead to a quick patient conversion ramp once implemented [11][27] Other Important Information - The company recorded net cash used in operations of $45 million for the first nine months of 2024, compared to $27.7 million in the same period in 2023, with cash and cash equivalents of $46 million as of September 30, 2024 [23] - The company anticipates the clinical study for TPN to cost between $10 million and $12 million, with the majority of expenses occurring in 2025 and 2026 [14] Q&A Session Summary Question: Can you speak to the use you are seeing today to what extent it is being driven by individual doctors or centers' decision to use the product versus the overall institution already implementing SOPs? - Management indicated that the rollout has been largely protocolized, driven by a top-down approach in outpatient settings, with centers establishing criteria for DefenCath use [27] Question: How do the reimbursement dynamics compare to what you are actually seeing during the launch? - Management noted that claims data lags, with initial utilization primarily among fee-for-service patients, expanding to Medicare Advantage and commercial payers [28] Question: How should we think about expenses in Q4? - Management expects operating expenses to be in the range of $15 to $17 million for Q4 [29] Question: Can you remind us of the stocking of DefenCath facilities, the holding time, and the order frequency? - Management stated that initial customers are not seeing much stocking, with estimates of holding inventory for about 10 days, while larger customers may hold 15 to 30 days [33] Question: What is the strategy to capture the other 40% operators? - Management is re-engaging with the remaining operators and generating additional data to encourage adoption, with a focus on the top five dialysis providers in the U.S. [43] Question: What percentage of Q3 sales did U.S. Renal account for? - U.S. Renal accounted for more than 90% of Q3 sales, and management is working to replicate their successful implementation with other customers [48] Question: What is the expected impact of the transition from WAC to ASP on ordering patterns? - Management does not expect the transition to impact ordering patterns significantly, as agreements have been structured around this change [50]