CorMedix Inc.

Good day and welcome to the Core Medics Inc. Second Quarter 2025 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please email conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To draw your question, please press star then two. Please note this event is being recorded. Now I'll turn the conference over to Daniel Ferry, Managing Director of Lifestyle Advisors. Please go ahead.

Good morning and welcome to the Core Medics Second Quarter 2025 Earnings and Corporate Update Conference Call. Leading the call today is Joe Sidisco, Chief Executive Officer of Core Medics. And he is joined by Dr. Matt Damon, Executive Vice President of CFO. In addition, Beth Zelnick-Kaufman, EVP and Chief Legal and Compliance Officer. Liz Hurlburt, EVP and Chief Clinical Strategy and Operations Officer. And Erin Mystery, EVP and Chief Commercial Officer are 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 meeting set forth in the Private Securities and Litigation Reform Act of 1995. These statements are statements other than statements of historical facts 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 Core Medics filings at the SEC, which are available free of charge at the SEC's website or upon request from Core Medics. Core Medics may not actually achieve the goals or plans described in these forward-looking statements. Investors should not place undue reliance on these statements. Core Medics 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. Gap to non-GAAP financial reconciliations and supplemental financial information are provided in Core Medics earnings release and the current report on Form 8K filed with the SEC. This information is available on the Investor Relations section of Core Medics website. At this time, it's now my pleasure to turn the call over to Joe Tadisco, Chief Executive Officer of Core Medics. Joe, please go ahead. Joe, please go ahead.

Thank you, Dan. Good morning, everyone, and thank you for joining us on this call. Today, concurrent with our second quarter earnings announcement, Core Medics announced the acquisition of Malinta Therapeutics in a combination cash and stock transaction. This deal is transformational for Core Medics, creating a fully diversified specialty pharmaceutical company with a broad portfolio of commercial and pipeline products concentrated in the acute care and anti-infectives areas. The Malinta product portfolio and existing operational infrastructure are highly synergistic with Core Medics current commercial portfolio and sales deployment and also provides an exceptional complement to future potential expanded indications for our lead product, DefendCas. I would like to congratulate Christine Miller, Malinta Therapeutics President and CEO and her team on building such a high performing organization with deep expertise in the hospital acute care and infectious disease arena. From a financial standpoint, Malinta adds to Core Medics a stable base of revenue for which we are currently guiding full year 2025 Malinta revenue between $125 and $135 million dollars spread across multiple assets, including six commercial stage products in the acute care and infectious disease space. We see opportunities for growth from both the existing commercial assets as well as their lead pipeline drug opportunity, a potential expanded indication for Rezio for the prophylaxis of invasive fungal diseases in adult patients undergoing allogeneic blood and marrow transplantation. In terms of key highlights of the transaction, the acquisition is expected to be near-term accretive with double digit EPS accretion in 2026 and we are forecasting that will drive mid to long-term revenue and cash flow growth. The addition of the pipeline opportunity of Rezio's expanded indication for prophylaxis provides a valuable growth driver of future revenue and we estimate that if approved peak annual sales potential in this indication could exceed $200 million. In the combined company, we also expect to capture significant near-term operating expense synergies estimated in the range of $35 to $45 million, which will foster near-term EBITDA growth and EPS accretion. We have already submitted the necessary filings to the Federal Trade Commission in order to comply with the Hartscout-Rodino Act, otherwise known as HSR, and we expect to close this transaction as early as September 1st, pending regulatory approval and other customary conditions of closing. The deal was structured as a combination of cash and stock with Deerfield Management Company to receive $40 million of the upfront purchase price in the form of CorMedx equity. Deerfield has also subscribed to $35 million of the $150 million debt offering executed concurrently with the transaction, which was used to fund the cash portion of the purchase price. We are excited to have Deerfield as a long-term investor in the new combined company, given their long history as an investor in Malinta and in the healthcare space. On a pro forma basis, we are guiding to full year combined 2025 revenue of $305 to $335 million, with $180 to $200 million of contribution from DefendCathNet sales. In addition, we are guiding to pro forma, fully synergized adjusted EBITDA for 2025 in the range of $150 to $170 million. Turning now to the CorMedx business and our second quarter updates, we were excited to announce a few weeks ago that our LDO customer initiated purchases of DefendCath, and we can now confirm that they have initiated utilization in patients beginning in early July. Based upon feedback from the LDO, their rollout plan involved a limited clinic rollout for the month of July to establish workflow practices and a system-wide rollout that is taking place this week across all of their more than 2,000 clinics. We expect a system-wide rollout to initially target approximately 6,000 patients. However, we do not yet have visibility from the LDO into the pace for that rollout. As we get more information and better visibility from our LDO partner, we will update investors accordingly. On the clinical front, we have made great progress on our phase three study for DefendCath in the reduction of CLABSI in adult patients receiving parental nutrition through a CVC. We now have multiple sites up and running and patients enrolled, and we are on track to complete the study and submit the NDA in the late 2026 to early 2027 timeframe. We have also begun enrollment in our pediatric study for the reduction in CRBSI in pediatric patients undergoing hemodialysis through a CVC, with the first patient expected to begin dosing in August. Lastly, we have made the decision to perform an interim analysis of our real-world evidence study with U.S. Renal Care and hope to be in a position to provide interim data by the end of 2025. This is significant as we aim to evaluate patient outcomes and the impact of DefendCath utilization on the cost of patient care, infection rates, hospitalizations, and mortality. All metrics that are critical to our goal of making DefendCath the standard of care for the reduction of bloodstream infections in patients getting hemodialysis through a CVC. I'd now like to turn the call over to Matt to discuss the company's second quarter financial results and financial position. Matt?

Thanks, Joe, and good morning, everyone. I'm excited to be here today to provide an overview of our second quarter 2025 financial results, as well as an update on QuarMetics' cash position and recent financing activities. The company will soon file its quarterly report on Form 10Q for the quarter ended June 30, 2025. I urge you to read the information contained in the report for a more complete discussion of our financial results. With respect to our second quarter of 2025 financial results, our net revenue for the second quarter of 2025 amounted to $39.7 million. Our net income was approximately $19.8 million, or $0.29 per share, compared with the net loss of $14.2 million, or $0.25 per share, in the second quarter of 2024. The positive net income recognized in 2025 was driven by commercial sales of defend cap. Operating expenses in the second quarter of 2025 increased approximately 18% to $18.3 million, compared with $15.6 million in the second quarter of 2024. R&D expense increased by approximately 275% to $2.4 million, primarily driven by increases in personnel and clinical trial services in support of the ongoing clinical studies. Selling and marketing expense decreased 14% to $6.4 million in the second quarter of 2025, compared with $7.4 million in the second quarter of 2024. G&A expense increased 25% to $9.5 million in the second quarter of 2025, versus $7.6 million in the second quarter of 2024. The decrease in selling and marketing expense was attributable primarily to marketing costs related to the commercial launch of defend cap. The increase in G&A expense was primarily driven by the non-cash charges for stock-based compensation and an increase in costs related to business development. We recorded net cash provided by operating activities during the second quarter of 2025 of $30 million, compared with net cash used in operations of $14 million in the second quarter of 2024. The increase is primarily driven by net income for the period versus the net loss in the prior comparison period and a decrease in trade receivables. On June 27th, QuorMatics announced the pricing of an underwritten public offering of common stock, for which we received net proceeds of $82.4 million. We noted in the press release at the time that the use of proceeds from the offering included general corporate purposes, expenses related to R&D, and potential strategic transactions that complement QuorMatics' business. In addition to strengthening our balance sheet, the transaction included a number of high-quality, new and existing investors. Concurrent with our announcement today of the acquisition of Molinta Therapeutics, we are also announcing the pricing of $150 million convertible debt offering, with use of proceeds to fund the acquisition of Molinta. The key terms of the convertible debt are five-year tenor with a 4% annual coupon and priced at a premium of 30%. In addition to Deerfield, the investors include a small group of high-quality life sciences institutional and convertible debt investors. As reported today, QuorMatics has cash and cash equivalents of $190.7 million as of June 30th, 2025. The company expects to use approximately $110 million of cash on hand in addition to the convertible debt proceeds to fund the upfront portion of the purchase price in the acquisition. While QuorMatics on a standalone basis continues to track toward the low end of previously guided cash OPEX, we expect to issue updated guidance over the coming months for the combined entity. I will now turn the call back over to Joe for closing remarks. Joe?

Thanks, Matt. QuorMatics is now firing on all cylinders with the implementation by our LDO customer commencing in July and the acquisition of Molinta targeted for closing in September. We intend to provide additional updates on the integration with Molinta over the coming months. We are excited about the platform we are creating for future growth and the opportunity to continue to create shareholder value. I appreciate everyone's continued support in QuorMatics and I'm happy to take questions.

Yes, thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. If any time your question has been addressed and you would like to withdraw it, please press star then 2. This time we will pause momentarily to assemble the roster. And the first question comes from Linda Timaches with RBC Capital Markets.

Hey guys, it's Anish Anfiliou. Congrats on the progress this quarter in the deal with Molinta. Just a couple of quick questions from us. First, if you could just talk to us about the guidance dynamics, how you're getting to the 180 to 200 range for DefendCath and what the sensitivities are there. And second, just quickly on Molinta, how are you thinking about the potential risks to the ongoing BARDA collaborations given the current policy and regulatory environment? Thanks so much.

Thanks, Anish. Appreciate the question. Look, so in terms of putting the guidance together, which to reiterate for DefendCath, we're guiding revenue in the 180 to 200 million dollar range. It's based on what we see today in terms of customer orders and our estimation for what we think is a conservative ramp toward the back part of the year. We have some visibility, but not full visibility yet of what we think the LDO could convert in the coming months. But obviously, we want to give ourselves room. We do think there's potential upside, but this is where we are comfortable today establishing guidance at this point in the year. Look, in terms of risk from a BARDA standpoint, certainly as we look at the value that Molinta brings, and I'm going to go through a couple of things. We view the collaboration with BARDA as upside potential, not really something that underwrote the value of the deal. So to that extent, not a tremendous amount of concern on our part in terms of what's driving the value of this transaction for Chrometics. First and foremost, this diversifies our revenue base and gives us a stable base of revenue. It's expected to be near term and possibly immediately accretive, depending on how quickly we can start to capture synergies, which we will get a sense for in the upcoming weeks. It's highly synergistic and not just from an operational overlap standpoint, but from a strategic direction standpoint and where we want to take, you know, defend CAF in terms of future indications. You know, there are additional potential indications for Rosio, expands our pipeline, gives us multiple shots on goal, gives us an asset with significant growth potential. And, you know, from a valuation standpoint, I think this is a very attractive post-synergy valuation deal multiple for us, right, given the growth potential of the platform and the other assets. And, you know, not to be overlooked, they have a very strong and established team in the hospital and acute care arena, right? So this, we've been talking over the last month about the types of transactions we would consider. This really checks all the boxes and then some, right? So we are super thrilled with the transaction and this is absolutely transformational for us.

Great, thanks and congrats again.

Thank

you. Thank you. The next question comes to Jason Butler with Citizens.

Hi, thanks for taking the questions and let me add my congrats on the quarter and the acquisition. Joe, could you talk to us a little bit about the growth potential of the current approved portfolio commercial profile of the Malinta assets?

Sure. Is that the only, are you going to have any follow-ups, Jason? Is that the? Yeah,

sure. Okay. And then just in terms of your commercial infrastructure in the hospital setting, how should we think about what Malinta looks like today and what the combined company will look like as a footprint targeting company? I think the hospital is adding, thanks.

That's fair. Okay. That's good. Look, in terms of the growth of the existing portfolio, there's absolutely growth potential there. Certainly, we see it with Rosario in the treatment space for its current indication, for Minison a little bit, for Vabamir and for Bactiff and Comersa. So, the biggest growth driver obviously is the potential expanded indication for Rosario. We do think Baxdell and Vabamir have upside as part of that Barta collaboration that I mentioned, but that's not something that we've really incorporated into our valuation to underwrite the deal. Look, from a commercial synergy and overlap standpoint, on that side, that's something we're going to look at over the next couple of weeks and see what makes the most sense from a structure standpoint. Obviously, we've got a strong team. They've got a strong team. We want to look at the best ways to put these two together. And put them together in a way that makes the most sense for the organization.

Great. Thank you.

Thank you. And the next question, Councilman Leskoski with Truist.

Good morning. Thank you for taking my questions. A couple for me. Just provide, perhaps, Joe, a little bit of a background on the Malenta transaction, specifically if it was a competitive process. And then second, across their portfolio products, how competitive is this space, either from branded or generic offerings? And then second, on the integration and synergies, what sort of integration expenses can be assumed for this year? And the progress within your senior sales team in patient side, is this something that could be multiple product offerings, including the FemCaf with Malenta on board? Thank you.

Thanks, Leskoski. You went through those quick, and I think I wrote them down and got them. Look, in terms of the background on the process, yes, this was a competitive auction process of which we understand there were multiple bidders involved. There were multiple rounds of bidding. And we participated in that process. I'm not sure how much more detail you're looking for on that front. But from a portfolio and competitive standpoint, obviously the anti-infective space, certainly those that are used in the inpatient setting, yes, it is competitive. There's typically a triage that infectious disease docs go through, likely using less expensive generics first before getting to newer branded products. That's a known dynamic of that space. I think one of the things that makes the expanded indication for Resio so attractive is that it's used in the outpatient setting, in the largely infusion clinics, oncology clinics, where it's not inpatient DRG reimbursement, but outpatient buy and bill reimbursement. So that is certainly an attractive opportunity from that standpoint. In terms of integration expenses, we're not guiding on that at this time. Perhaps we'll provide more color once we are post-closed. And then I think in terms of the operational synergies with our existing team, I somewhat touched on that with, I think it was Jason's last question, right? We're going to look at that over the coming weeks. We think we have a very strong team. We know that they have a very strong organization, and we're going to look at the best ways to put these two together.

Got it. Thank you. Congrats on the transaction. Thanks, Wes.

Thank you. Next question comes from Ron O'Rourke with LERNC.

Hey, thanks for taking our question. This is Maisie on for Ron O'Rourke. So it's just building on the Malinta acquisition. So what key asset that you're acquiring are you most excited about? And then secondly, I guess beyond the Malinta acquisition, how are you thinking about capital allocation? Are there other strategic opportunities you're evaluating? And it's a big picture. What's your philosophy on returning cash to shareholders versus reinvesting for future growth?

Thanks for the question. So I guess in terms of the asset I'm most excited about, it's kind of like being asked to pick your favorite kid. But certainly, I think the expanded education for Rosario has huge or potential upside that is attractive to us and that we are very excited about. But certainly, as I said before, the full portfolio of assets largely diversifies our revenue base and adds stability as well as growth. And that's highly attractive to us as an organization. And I think the second question was kind of like a combination capital allocation slash business development question. And yes, we certainly are, once we get a chance to catch our breath, willing to start looking at other opportunities that would be, again, highly synergistic with the organization, near-term accretive. These are the criteria that we've kind of long established that what the deals we are looking at or willing to look at right now should be in terms of generating near-term value for shareholders. That is a big focus. And that's the primary focus right now as opposed to looking at a future dividend policy. So that's where we stand today.

Very helpful. Thank you.

Thank you. And the next question comes from Brandon Foulkes with ACU EnRite.

Hi. Thanks for taking my questions and congratulations on the deal and the quarter. Maybe just following on from the prior question, as you take these steps to build a specialty firm company, how do you look at the post-closed commercial infrastructure? You will have, you know, I guess twofold one, especially in terms of adding TPN to the bag. You know, do you think TPN now potentially largely drops to the bottom line? And then, you know, as you go forward and do add potential additional products, how do you feel about the number of products in the acute care rep's bags today versus additional acquisitions coming with additional sales force versus just bringing in products to the combined commercial infrastructure? Thank you.

That's fair. So I think again, a lot of the, I guess the first part of that question, you know, I somewhat answered to Jason Butler's, you know, I'll reiterate that, you know, as I said, we think both teams are incredibly strong. We're going to look at how to put them together. Now, I think in terms of the Mlint team, you hit the nail on the head. The TPN, the potential TPN indication fits very well, you know, within their existing sales deployment as well as with our hospital sales deployment. In terms of how many right products a typical, you know, account manager can carry in their bag. I think it varies. And at all points in time, every product is not necessarily getting the same amount and level of attention in a detail, right? There's products that are that, you know, will be fairly stable without significant promotion and others that require significant effort and constant education. So, you know, it's going to be a mix. You know, this is something that we're going to work on quite intensely in the upcoming months and put together an organization, right? That is that is strong in position for growth.

Thanks. Maybe just one follow up from ages coming back to defend cast. Any additional color? And I understand if you can't what you contemplate in terms of the LDO ordering in your updated guidance. And then secondly, is the outpatient setting for defend cast now, you know, a little bit more hands off when you as a company can focus more on the inpatient setting or, you know, is there still sort of quite a high touch in that outpatient setting as well as you go to inpatient setting? That's all for me. Thank you.

Yeah, like I'll take the second question first, actually, you know, in terms of I think I think you're guiding you're asking about kind of sales and marketing effort. And I think you're right in the outpatient setting is, as I said, open up some prior calls. It's a it's a smaller footprint that's needed. It is less of a touch point. It's more key account management at a very high level within these organizations. But there still is there there's still effort and there's also right smaller dials operators are out there and we have a we have a small targeted team that is that is working on on those accounts. Right in terms of additional color on kind of LDO ramp, you know, they said in I think one of the earlier questions. You know, we've based our guidance on on what we think is a conservative, you know, ramp with with the information that we have. We've left ourselves, we think meaningful room for upside as we evaluate orders over the upcoming weeks. You know, but we're very comfortable with, you know, with the range that has been set based on based on the information we have today.

Right, thanks very much.

Thank you. And the next question, constant search bellinger with Needham and Company.

Hi, good morning and congrats on the acquisition. See big paper. Core Medics. First question. Regarding the Milinta portfolio, if you highlighted six or seven products, you just maybe talk about, you know, which are the key ones that are generating the growth for this portfolio. Second question sounds like the risio label expansion opportunity is a significant potential upside for for the potential of this product. You just maybe talk about this space to retrial when you expect results and maybe what the outcome needs to be to be successful. And then lastly, on deaf and cat, any additional progress regarding the remaining LDO customer? Thanks.

Thanks, Serge. Look, as we as we get, you know, more, you know, through closing, we'll obviously give more guidance, directional guidance on each on each of the products. Right. So we've just now announced the transaction, you know, big picture on the portfolio, as I as I mentioned earlier, you know, in terms of the approved products, obviously, risio, medicine, Babamir, right, or back to commercial franchise, all opportunities, right, for growth. Back to Della, right, is a fairly small product. I think, you know, you'll all have access to IQV data. You can see it's right now a very small sales contributor, but something like that, that is that is actively part of that barter agreement has potential upside right down down the road. In terms of the label expansion, the phase three study is expected to complete in the first part of 2026. I don't have a commitment date for when that data will be available. The study is being run in collaboration with Malinta's partner, Monday Farm. And when we have more information, we'll certainly we'll certainly be able to share that in terms of the other LDO customer. You know, I would say that, you know, as I mentioned on the last call, right, once we once we operationalized our existing LDO, we would we would attempt to resume discussions. And I'd say that's the stage that we're at. And, you know, as we make progress, we'll provide updates.

Thanks.

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