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spk01: Good afternoon, and welcome to the Corps Medics fourth quarter earnings conference call. Today's 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. I would now like to turn the conference over to Daniel Ferry from LifeSci Advisors. Please go ahead.
spk02: Good afternoon, and welcome to the Corps Medics fourth quarter and year-end 2021 earnings conference call. Leading the call today is Dr. Matt David. Interim Chief Executive Officer and Executive Vice President and Chief Financial Officer of CoreMedix. He is joined by Dr. Phoebe Mounts, Executive Vice President and General Counsel. 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 subject to certain risks and uncertainties and include, but are not limited to, any of the following. Any statements other than statements of historical fact regarding management's expectations, beliefs, goals, and plans about the company's prospects, including its clinical development program, manufacturing activities, and marketing approval for DefendCath, in the U.S. and other product candidates. Future financial position, future revenues and projected costs, and potential market acceptance of DefendCast, Neutralin, and other product candidates. More specifically, forward-looking statements include any statements about our clinical development goals, clinical development plans, excuse me, and the cost, progress, results, estimates, and interpretations thereof, projections as to the company's future capital raising and spending and cash position, expectations as to the timing and nature of anticipated regulatory actions, possible product licensing, business development, or other transactions, any commercial plans and expectations, market projections for our product candidates, and expectations as to the manufacturing and product component costs. Actual results may differ materially from these projections or estimates due to a variety of important factors, including but not limited to uncertainties related to clinical development, regulatory approvals, and commercialization. These risks are described in greater detail in Coromatics' filings with the SEC, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Coromatics. Coromatics may not actually achieve the goals or plans described in these forward-looking statements, and investors should not place undue reliance on these statements. Please note that Coromatics does not intend to update these forward-looking statements except as required by law. At this time, it is now my pleasure to turn the call over to Dr. Matt David, Interim Chief Executive Officer and Chief Financial Officer of CoreMedix. Matt, please go ahead.
spk06: Thank you, Dan. Good afternoon, everyone, and thank you for joining us on this call. While it has been an incredibly busy time, we are excited to be here this afternoon to discuss CoreMedix updates as well as reflect on our priorities as a company over the coming months. On today's earnings call, we will discuss the fourth quarter and full year 2021 financial information and the overall progress CoreMedix is making in bringing DefendCast to the U.S. market for its first indication for use as a catheter lock solution for the hemodialysis patients to reduce catheter-related bloodstream infections. Let's begin with the topics for discussion today. On February 28th, we announced that Cormedex had resubmitted the DefendCath NDA to the FDA in parallel with our third-party contract manufacturer, or CMO, submitting responses to the deficiencies identified at the manufacturing facility in the post-application action letter issued by the FDA concurrently with the CRL in 2021. The Cormedex team, led by Phoebe, worked tirelessly in conjunction with our CMO in order to reach that important milestone for Cormedex. Yesterday, we were very pleased to share that the FDA has accepted the NDA resubmission for filing and begun the review process. Phoebe is here to provide details on our progress on the regulatory and manufacturing fronts since our last update. As we continue to chart a course toward the potential of the FENCAP approval and launch, Cormedex announced recently that the Board has appointed Joe Tedisco as Chief Executive Officer. Joe brings significant experience in commercial operations, leadership, and business strategy to our organization and has spent the last 10 years building and leading commercial organizations globally across multiple therapeutic areas. Most recently, Joe served as Chief Commercial Officer of Amil's Specialty Business, where he was responsible for managing and growing a $400 million run rate business with roughly 200 employees. Everyone at Quamatics joins me in welcoming Joe, and we look forward to working with him when he joins on or before May 16th. We have continued to balance our preparations for launching DefendCat while limiting our cash burn so that financially we have the resources to efficiently bring DefendCat to patients in the U.S. following an anticipated FDA approval. With the NDA resubmission now being reviewed, we expect to see some increases in spend in the coming quarters as we ramp pre-commercial activities and manufacturing activities in planning for a potential launch. I will provide an update on our fourth quarter and full year 2021 financials and provide color regarding our cash position. During our earnings call in November, we discussed some of the work that the CoreMedix team had completed to highlight the magnitude of catheter-related bloodstream infections in the hemodialysis patient population via abstracts that were presented at industry conferences. The last topic today is to provide some color on the continued work by our commercial team and medical affairs team as we prepare to bring DefendCast to patients following an FDA approval. While we are a modest-sized team, this important work leverages consultants, market research firms, and thought leaders as we continue to expand our understanding of, one, the hemodialysis market opportunity across the spectrum of care, two, reimbursement dynamics, and three, pharmacoeconomic considerations that will each factor into our commercial strategy for DefendCath. Now let's move to the first topic. Phoebe will provide the regulatory and manufacturing update. Phoebe?
spk08: Thank you, Matt, and good afternoon, everyone. I am very pleased to be able to report that FDA has accepted the DefendCath NDA resubmission for filings. I would like to start with my gratitude to the resubmission team of Reyes Barrios, Amaru Sanchez, Jessica Vaughn, and Sibu Varghese, and express my appreciation for being able to work with dedicated individuals whose hard work and expertise have enabled core medics to move to a step closer to FDA approval and reducing life-threatening catheter-related bloodstream infections in patients. As we had announced late last month, we believe the resubmitted NDA for DefendCast provided the data requested by FDA in the complete response letter or CRL. In parallel, we worked collaboratively with the company's third-party contract manufacturer and believe it addressed the deficiencies identified at the manufacturing facility in the post-application action letter issued by FDA to the manufacturer concurrently with the CRL. FDA reviewed the NDA resubmission for completeness and made a filing decision. In accepting the resubmission for filing, FDA informed core medics that the resubmission is complete and considered a Class 2 response to the action letter. FDA's policies and procedures define a Class 2 resubmission essentially as a resubmission that includes any item not specified as a Class I item, which is an explicit list of nine items, such as minor reanalysis of data previously submitted. The DefendCast resubmission has new manufacturing data that has not been previously submitted to FDA and is therefore considered Class II with a six-month review cycle. As we had previously discussed, FDA had stated that resolution of the deficiencies may require a pre-approval inspection of the manufacturing facility. We have learned from our manufacturing partner that it has been notified by FDA already that the FDA will conduct an inspection. We believe that CoreMedix and the manufacturer have adequately addressed the concerns identified by FDA and we remain committed to working jointly to ensure a successful inspection. We believe that FDA will complete the pre-approval inspection within the six-month review period. FDA has begun its evaluation of the NDA, and we will continue to respond promptly to FDA's request for additional information, which have already begun, to ensure a timely review of the NDA. CoreMedix had not been asked to resubmit any information relating to clinical data from the Lockett 100 study. I can assure you that we will continue working diligently to demonstrate to FDA that the manufacturing facility is ready to support commercial operations for DefendCast and to secure FDA approval of the DefendCast NDA. We are committed to providing updates to investors as appropriate over the coming months during the review process. I would now like to turn to our activities directed towards ensuring that CoreMedix has secured adequate manufacturing capacity for DefendCast to meet the unmet medical needs of reducing catheter-related bloodstream infections. CoreMedix is planning for clinical trials following an anticipated FDA approval to be in a position to expand the indications for use of DefendCast. We also believe it is important to anticipate potential supply chain challenges and ensure multiple sources are in place to provide adequate inventory. Accordingly, as CoreMedix has previously discussed, we are engaged in identifying additional potential manufacturers of defend cath in the United States while we work to obtain marketing authorization from FDA. We are actively engaged in discussions with potential manufacturers and in the process of conducting appropriate due diligence at the facilities to ensure a good track record of FDA compliance, appropriate technical expertise, and available capacity to meet our manufacturing goals. We anticipate being able to complete our diligence process in the coming weeks. Thank you and I will now turn the call back to Matt to cover financial results, cash guidance, and commercial strategy updates for DefendCash. Matt?
spk07: Thanks, Stevie.
spk06: Next, I will provide an overview of our fourth quarter and full year 2021 financial results, as well as an update on CoreMedix's cash position. The company has followed its report on Form 10-K for the full year ended December 31st, 2021. urge you to read the information contained in the report for a more complete discussion of our financial results with respect to our fourth quarter 2021 financial results the company has cash and equivalents and short-term investments of 65.5 million as of december 31st 2021 including approximately 3 million in net proceeds from our atm program in first quarter of 2022 Cormedex has December 31st pro forma cash and equivalents of $68.5 million. Our net loss was approximately $7.8 million, or $0.20 per share, compared with a net loss of $6.1 million, or $0.19 per share, in the fourth quarter of 2020. The higher net loss recognized in the fourth quarter of 2021 compared with the same period in 2020 was driven by increases in costs related to the manufacturing of DefendCast, prior to its potential marketing approval, and non-cash charges for stock-based compensation. We recorded an increase in SG&A and an increase in RMD expenses. Operating expenses in the fourth quarter of 2021 increased approximately 28% to $7.8 million, compared with $6.1 million in the fourth quarter of 2020. RMD expense increased by approximately 41% to $3.2 million, driven primarily by an increase in costs related to the manufacturing of DefendCast prior to its potential marketing approval and to a lesser extent by an increase in consulting fees and an increase in non-cash charges for stock-based compensation. SG&A expense increased approximately 21% to $4.6 million compared with $3.8 million in the fourth quarter of 2020. This increase was driven by an increase in non-cash charges for stock-based compensation and an increase in personnel expenses as a result of additional hires partially offset by a decrease in costs related to market research studies in preparation for the potential marketing approval of DefendCast and a decrease in consulting fees. With respect to our full year 2021 financial results, our net loss for 2021 was approximately $28.2 million or $0.75 per share compared with a net loss of $22 million or $0.77 per share in 2020. The higher net loss recognized in 2021 compared with 2020 was due to higher G&A costs as well as a smaller tax benefit received in 2021. Operating expenses in 2021 increased approximately 8% to $29.5 million, compared with $27.3 million in 2020. R&D expense decreased by approximately 2% to $13.1 million, driven by net decreases in costs related to the manufacturing of DefendCath prior to its potential marketing approval and a reduction in clinical trial expenses due to the closing of our Lockett 100 clinical trial. These decreases were offset by increases in non-cash charges for stock-based compensation and increases in consulting fees and personnel expenses. SG&A expense increased approximately 18% to $16.3 million compared with $13.9 million in 2020. This increase was driven by an increase in non-cash charges for stock-based compensation, an increase in personnel expenses partially offset by decreases in consulting fees, and costs related to market research studies in preparation for the potential marketing approval of DefendCash. We recorded net cash used in operations during 2021 of $21.2 million compared with net cash used in operations of $22 million in 2020. The difference was primarily driven by an increase in accounts payable compared to the same period in 2020, partially offset by an increase in net loss mainly attributable to lower cash received in 2021 from the NOL sale versus the same period in 2020. CoreMedix remains in a good position from a balance sheet perspective. We believe our pro forma cash and equivalents of approximately $68.5 million gives the company flexibility to fund its operations through the first half of 2023 after taking into consideration costs related to commercial supply and costs related to the initial stages of the potential commercial launch for the FENCAP. We remain optimistic about our progress toward an anticipated FDA approval for the FENCAP in 2022. As highlighted previously, we believe that our current cash and equivalents, as well as the potential mechanisms available to us for capital raising, allow us to be prepared for the future, given we are facing what we hope and believe will be a pivotal time ahead for core medics as we seek to bring DefendCath to patients in the hemodialysis setting.
spk07: As the last topic today,
spk06: I would like to highlight the continued efforts by the Chormetics team to expand our understanding of one, the hemodialysis market opportunity across the spectrum of care, two, the reimbursement dynamics, and three, pharmacoeconomic considerations that will each factor into our commercial strategy for bringing DefendCat to patients upon its approval. Chormetics has continued to work with outside consultants and market research firms to further develop our views on the hemodialysis market across all settings of care. We are working to build our understanding of each of the key steps of a patient's journey, including the initiation of hemodialysis treatment, the placement and maintenance of a central venous catheter, and the chronic hemodialysis treatment in an outpatient setting and at times in an inpatient setting. Changing the status quo rarely comes without cost, without compelling data, and without a coordinated effort around education. The CoreMedics team is spending time and resources on developing our understanding, our relationships, and our strategy around all the key constituents of the hemodialysis landscape in order to be prepared to bring defendCAT to patients following its approval. On the reimbursement side, we are working with consultants and engaging with decision makers to inform our strategies around defendCAT's reimbursement. This includes core medics interfacing with a broad consortium of groups including various types of dialysis providers, Centers for Medicare and Medicaid Services, or CMS, hospitals, and patient advocacy groups, such as National Kidney Foundation and Dialysis Patient Citizens. On the medical affairs side, recall that CoreMedix presented at a pair of conferences in the fall of 2021 and highlighted work that was done integrating multiple clinical and claims databases that CMS and dialysis providers use to track patient care and quality metrics in end-stage renal disease patients. The conclusions from those retrospective studies underscored the significant incidence of and mortality related to CRBSIs and economic costs related to these infections. These findings are especially important since approximately 80% of patients undergoing hemodialysis start with a central venous catheter as their first vascular access. We also noted that approximately 29% of the patients in the cohort had a CRBSI post-CVC insertion, and we discussed how CRBSIs lead to more hospital admissions, longer stays, and a more complex clinical course. The team at CoreMedix is aiming to update and expand the breadth of this work based on available data, and we'll look to have a presence at relevant conferences as we look ahead. With Joe joining the company this spring, we will aim to leverage his significant experience in commercial strategy as we further the efforts I have described and continue to prepare to bring DefendCast to patients in the U.S. following its approval. The Chromedics team is enthusiastic about our recent announcements and is highly focused on our commitment to patients in need of alternatives that reduce CRBSIs that contribute to significant levels of morbidity and mortality. To summarize what Phoebe and I have discussed today, we continue to focus our efforts on the following. First, we are pleased to be able to share the updates regarding the recent resubmission of the DefendCath NDA and its acceptance for filing by the FDA. With a six-month review period, we look forward to sharing updates as appropriate. There is much to do in the interim to ensure that Cormetix has launched inventory and has secured sufficient manufacturing capacity for the longer term. In addition, we are carefully balancing our cash burn while preparing for the commercial introduction of DefendCap once we have approval of the NDA by FDA. As the commercial strategy continues to take shape with our incoming CEO, we look forward to discussing in greater detail in the future. Also, we are continuing to plan to broaden the opportunity for DefendCap following its approval and continuing to expand our understanding of opportunities to benefit patients with central venous catheters, such as hemodialysis across the spectrum of care, total parenteral nutrition, and oncology. I would like to take a moment to recognize the broader core medics team, many of whom have been instrumental in our achievements over the past several months. We remain confident that we have a strong team and appropriate resources in place to continue to advance the FENCAS toward potential regulatory approval later this year and bring the FENCAS to hemodialysis patients in the U.S. Thank you for your continued support of and interest in CoreMedix.
spk07: Operator, please open the call for questions.
spk01: Thank you. Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Our first question comes from Jason Butler with J&P Securities. Please proceed.
spk04: Hi. Thanks for taking the questions, and congrats on the progress. Great to see you. First one, Matt, have you received a PDUFA date from your FDA yet, and can you share that with us? And then on the reimbursement side of things, are you still planning to pursue reimbursement under the Tdapa program, and what would the timelines be based on your PDUFA date? Thanks.
spk06: Thanks, Jason. First on the PDUFA side, I'll pass things to Phoebe to start. Thanks.
spk08: Thanks, Jason. Thanks, Matt. As I'm sure most folks know, the Prescription Drug User Fee Act, or PDUFA, sets performance goals for FDA for completion of agency review. And those are goals, performance goals, and not statutory timelines imposed on FDA. So everyone is cognizant of issues that can develop during the review process that may impact the timeline. COVID-19 pandemic, everyone's acutely aware of unforeseen disruptions of travel and planned activities. So given the potential for changes, we are prepared to work within the six-month review cycle, and we're hoping for the best. So we will provide updates to investors if there are significant delays that occur in the review timeline, but we're hopeful that six months of review will be sufficient.
spk06: Thanks, Stevie. And I'll just jump in on your other part of your question, Jason, which was about TDAP, I think. Yeah, as you know, we're evaluating all the alternatives, but continue to believe TDAP route is an important one for products in the renal space. We've talked about the timing before, which is that you apply following an approval. And so it takes, depending on the timing of the quarterly cycle, it takes one to two quarters.
spk04: Got it. Great. And then just... Second one for me, you said that you were, forgive me if I'm not quoting you exactly, but confident that the planned inspection, manufacturing inspection can happen within the six-month window. Is that inspection already scheduled, or what gives you the confidence that FDA can get that done within the six-month period? Phoebe?
spk08: We've learned from the manufacturer that FDA has reached out to them about scheduling the inspection, so. And based on the discussions that are ongoing, I'm confident that we'll get it done in the six months.
spk04: Okay, great. And then just last one from me. As you work through the commercial preparations, are you having any direct interactions with the, you know, the leading dialysis providers? Or can you just give us any more color there about how you're building awareness of the products and the data sets?
spk06: Yeah, no, absolutely. Thanks, Jason. Yeah, as we touched on, there's a number of things that the core medics team is doing to prepare for commercial launch. The team has been expanding our understanding of the defend cath opportunity through market research, payer research, and really continuing that work on the pharmacoeconomic side. We have broadened our understanding of the patient journey for a renal failure patient that includes all the components from placement of a central venous catheter to initiation of hemodialysis, to inpatient visits and beyond. And so we will begin to recruit, I think, some of the key commercial roles as we prepare for potential launch. But we're just really continuing on that work and laying some of the groundwork at this point. I think once Joe gets up to speed and really begins on the chromatic side, we'll talk a little bit more about the commercial strategy so you'll get some of that detail in the future.
spk04: Okay, great. Thanks again for taking the questions, and again, congrats on all the progress.
spk07: Thanks, Jason. Thanks, Jason.
spk01: Our next question is from June Lee with Truist. Please proceed.
spk05: Hey, thanks for taking our questions as well. I believe the wording in the prior press release was that the onsite inspection has been scheduled. If and when that happens, Would you consider that to be a disposable item given the deficiencies related to the CMO? Phoebe?
spk08: Those are conversations that occur between FDA and the manufacturer. That's not information that CoreMedix is at liberty to disclose.
spk05: Got it. And when Mr. Tedisco joins the company, what will be his first order of business And in fact, when is he actually going to be joining the company? I know that he has some obligations to his current employer, but just curious what the timing could be.
spk06: Yeah, no problem. Thanks for the question. Thanks for joining today, June. Yeah, so as we've said before, I think in our press release and today, Joe is expecting to join on or around May 16th. And really, in terms of priorities, I'll certainly let him go through that with you, but I believe some of the very first orders of business is to kind of get in there and start setting the tone from a commercial strategy perspective. As Phoebe walked you through today, we have a timeline, right? We've got some great news that we received this week that we were so excited to share as it relates to the acceptance of the submission and our six-month review cycle. So I think it really is going to be figuring out step one, two, three, four, and beyond, making sure that we are prepared for upon that anticipated approval to bring defendCAT to patients.
spk05: Great. And then last question, you know, what's assumed in your cash burn guidance through first half of 23?
spk06: Sure. That was a great question. So as we've said, the cash guidance includes items such as commercial supply for launch and the initial stages of the commercial launch. And so that factors in that. I think what you'll see as you think about the rest of the year, is that things will, less so in the beginning of the year, but really as you get towards the second half of the year, begin to dial up from a spend perspective as we need to ramp up each of those components to ready the company for a commercial launch. All right.
spk07: Thanks for the questions, and looking forward to the updates. Thanks, June.
spk01: Our next question is from Rohit Basin with Needham & Company. Please proceed.
spk03: Rohit Basin Hi, this is Rohit on for surge. Thanks for taking my question. Is there anything you can tell us in terms of pricing of DefendGap and have you had any recent discussions with payers?
spk06: Rohit Basin Sure. Thanks, Rohit, and thanks for joining us today. Yes, for pricing, I think I mentioned during the call We have discussions with payers, including CMS, obviously a very significant payer for the renal space, often and all the time. So that's ongoing. In terms of specific pricing as it relates to the FENCAP, we continue to work through the pharmacoeconomic data that we've described before, and hopefully we'll share more this year, and continue the dialogue with payers in the space. So we really would plan to discuss pricing around the time of a potential approval.
spk07: Thank you.
spk01: Ladies and gentlemen, there are no further questions at this time. I will now hand the call back to Daniel Ferry for questions from the audience.
spk02: Thank you. Thank you, operator. Matt, our first question is regarding Joe's joining in mid-May. Matt, does that mean you will stay on at CoreMedix and focus on CFO responsibilities?
spk06: Thanks for the question. Yes, I am planning on continuing to serve as CoreMedix's CFO, as I have since May 2020. I am proud of what we have accomplished as a team over these past six months and look forward to working with Joe as we guide the company strategy going forward.
spk02: Thanks. Thanks, Matt. Okay, and another one here on the commercial side of things. Can you comment on plans for additional indications like pediatrics, TPN, oncology?
spk06: Sure. We have discussed in the past that Chormetics plans to pursue opportunities to broaden the use of DefendCat following an approval. And we've continued to expand our understanding of the various patient groups that use central venous catheters. We'll aim to discuss these in more detail during subsequent calls.
spk02: Excellent. And on the balance sheet, Matt, will core medics need to raise money in order to launch DefendCath, and what options are available to the company?
spk06: Thanks, Dan, and thanks for whoever submitted the question. It has always been a priority to make sure that core medics has adequate funding to accomplish our strategic goals. As we mentioned, our cash guidance through the first half of 2023 includes costs related to the initial stages of a commercial launch. Despite the turbulence in the markets, I think that we will have access to a similar range of alternatives as other commercial stage companies. So equity, convertible debt, royalty, financing, et cetera.
spk02: Understood. Thanks, Matt. I'd like to turn the floor back over to you for closing remarks.
spk06: Thanks, Dan, and thanks, everyone, for the questions and your continued support of CoreMedix. We are pleased to be able to share these updates with you today. CoreMedix remains committed to bringing DefendCast to the U.S. market to help patients in need of protection from life-threatening infections. The importance of reducing the incidence of infections and keeping patients out of the hospital has been even more apparent during the ongoing COVID-19 pandemic. Thank you for your time and attention, and have a good evening.
spk01: this concludes today's conference thank you very much for your participation you may now disconnect
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