Good day, ladies and gentlemen, and welcome to your CorMedix Second Quarter 2019 Earnings Conference Call. All lines have been place on a listen-only mode, and the floor will be open for your questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to Mr. Dan Ferry. Sir, the floor is yours.

Good afternoon. And welcome to the CorMedix second quarter 2019 investor conference call. Leading the call today is, Khoso Baluch, Chief Executive Officer of CorMedix. He is joined by Bob Cook, Chief Financial Officer of CorMedix; Phoebe Mounts, Executive Vice President and General Counsel; and Jack Armstrong, Executive Vice President, Technical Operations. 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 for Neutrolin in the U.S. and other product candidates, future financial position, future revenues and projected costs, and potential market acceptance of Neutrolin and other product candidates. More specifically, forward-looking statements include any statements about our clinical development plans and the timing, costs, results, 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 or other business development transactions, any commercial plans and expectations, market projections for our product candidates, and expectations as to 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 CorMedix 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 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. Please note that CorMedix 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 Mr. Khoso Baluch, Chief Executive Officer of CorMedix. Khoso, please go ahead.

Thank you, Dan. Good afternoon, everyone, and thank you for joining us on this call. Today's earnings call will focus on our continued efforts to bring Neutrolin to the U.S. market as a catheter lock solution for hemodialysis patients, and the commercial opportunity that we've analyzed for the catheter lock solution. For this call, I have Bob, Phoebe, and for the first time, Jack Armstrong, joining me. Paul and Liz are not joining this call, but are busy at work. We will cover four topics during this call. First, an update on the significant progress we've made on the regulatory pathway for Neutrolin directed at filling a marketing application for a new drug or NDA. We will then talk about chemistry, manufacturing and control information or CMC, which is a major component of the NDA and that we're currently underway to establish the supply chain for the U.S. market. We will then talk about Neutrolin’s commercial opportunity in the U.S. as a catheter lock solution not only for hemodialysis, but also for additional indications for use. And we will then provide you an update on the Company's financial position. With that, let me hand over to Phoebe Mounts.

Thank you, Khoso. It is a pleasure to be here and to be able to provide you with an update on our progress on the regulatory activities required to bring Neutrolin to the market in the U.S. During the last earnings call, I emphasized our ongoing discussions with the FDA on the clinical data generated in our clinical trial LOCK-IT-100 and its efficiency to provide substantial evidence of safety and effectiveness of Neutrolin to prevent catheter-related bloodstream infections in hemodialysis patients. Without a doubt, adequate evidence from clinical trials is the most significant milestone for an investigational new drug and warrants the emphasis that sponsors and the FDA place on ensuring robust and reliable data to protect patients who will be using the drug and provide accurate prescribing information to physicians in the process of medicine. Without successful clinical trial data and investigation, new drug progresses no farther towards commercial distribution. We were very pleased to be able to announce in a press release on July 9th that based on CorMedix’s communications with the FDA, the Company has completed Phase 3 of clinical development of Neutrolin in hemodialysis patients. What this means is the second clinical trial in hemodialysis patients will not be conducted. This means that we have saved more than two years and millions of dollars by not needing a second Phase 3 study. Assuming that Neutrolin is approved, we will able to prevent catheter-related infections to save lives and begin generating revenue earlier than anticipated. As Khoso will discuss later on the call, CorMedix believes that Neutrolin has the potential to be a best-in-class product without any serious competition insight. As we covered in our last earnings call, considerable data were generated from the almost 800 study subjects in LOCK-IT-100. And we focused our discussions with FDA…

Thank you, Phoebe. My name is Jack Armstrong, and I have been associated with CorMedix for the last 4.5 years, first as an advisor and since 2017 as a full time employee as EVP for Technical Operations. For those of you who do not know me, I would like to share a little bit of my background. After college and serving in the U.S. Army, I began my 45-plus-year career in the pharmaceutical industry working for Merck. In my years in the pharma industry, I have been very fortunate to have worked in both big pharma and small pharma companies. For the past 30-plus-years, my roles have been related to CMC, manufacturing and drug development as well as serving in senior executive positions including as CEO of several companies. Now, let’s get focused on Neutrolin. CorMedix has been manufacturing and selling Neutrolin outside the U.S. for the last five years. We have successfully carried out technical transfer and validation of the manufacturing process, which has enabled the successful production of product at three different manufacturing sites. This should give you comfort that we understand Neutrolin’s manufacturing, technical, analytical processes as well as the quality controls and the systems that go with it. I have working with me a very experienced and competent team that has the needed breadth and depth and the requirements for sourcing, manufacturing, distribution and quality control that is necessary for both the U.S. and foreign markets. And importantly, the key members of my staff, including me, have in our past experience, successfully submitted multiple NDAs that were ultimately approved. As Phoebe has said, our interactions with the FDA concerning product manufacturing have been proactive and positive. We have no reason to believe that we cannot fulfil the requirements that the FDA has outlined. Many companies, particularly…

Thanks, Phoebe and Jack for describing clearly important work for CorMedix as we continue to move forward in the next phase for Neutrolin. Now, let me cover some exciting insights. During the last several quarters, CorMedix updated its understanding of the market opportunity and the evolving reimbursement environment for Neutrolin in the U.S. CorMedix undertook several studies including extensive interviews with almost 180 nephrologists, oncologists, TPN, healthcare providers, and nurses in each of the segments, plus payers covering all the different sectors involved with reimbursement. The work that was previously done is several years old and we wanted to ensure that our understanding of the market includes current standard of care in the various indications and the impact of the current therapies on the need for catheter lock solutions. As a result, we believe we would be better prepared to meet the need of the patients and the caregivers, should the FDA approves Neutrolin in the U.S. Our work has reinforced our belief that the medical need is substantial. Nurses and physicians agree that a catheter-related infection is the most clinically concerning complication associated with central line use. Neutrolin’s profile, as we now know, based on our Phase 3 study is clearly a game-changer. And we are convinced that it has the potential to be a best-in-class product. We have reconfirmed the significant unmet medical need and that practitioners considered current solutions inadequate. Healthcare providers are seeking a better solution. Based on the research, Neutrolin received very-high acceptance ratings within all segments and by all healthcare providers. This clearly positions Neutrolin as a popular solution for preventing the catheter-related bloodstream infections that so many patients and healthcare providers dread. In fact, based on the current market research with nurses and physicians, the interest in Neutrolin product profile was very-high. The…

Thank you very much, Khoso. The Company expects to file its report on Form 10-Q for the second quarter and six months ended June 30, 2019, tomorrow. I urge you to read the information contained in the report for a more complete discussion of our financial results. With respect to our 2019 financial results, our net loss was approximately $0.7 million or $0.03 per share compared with the net loss of $8.6 million or $0.52 per share in the second quarter of 2018. During 2019 second quarter, we recorded the sale of our New Jersey net operating losses, resulting in cash proceeds of $5.1 million. R&D expenses declined significantly while we recorded an increase in SG&A expense. Operating expenses in the second quarter of 2019 declined 35% to $5.5 million compared with $8.5 million in the second quarter of last year. R&D expense declined approximately 55% to $3 million from $6.6 million, mainly due to a $4.7 million decrease in clinical trial expense, partially offset by a $1 million increase in CMC-related activities. SG&A expense increased 32% to $2.6 million compared with $1.9 million in the second quarter of 2018. Higher compliance expenses, staffing, consulting and marketing expenses were partially offset by a reduction in legal fees, patents and investor relations expenses. We recorded positive cash from operation during the second quarter of this year of $0.2 million, as a result of lower operating expenses and the cash received from the sale of our New Jersey NOLs, compared with cash used in operations of $4.3 million in the second quarter of last year. With respect to our financial results for the six months ended June 30, 2019, our net loss was approximately $5.9 million or $0.25 per share compared with a net loss of $18.7 million or $1.19 per share…

Thank you, Bob. What Phoebe, Jack and Bob covered with you hopefully provide you insight into the work efforts on which we have focused that have occurred over the last three months. I'm pleased about the progress we are making and like to we emphasize, we extremely pleased to report to our shareholders that the major corporate objective this management team undertook in 2017 to successfully complete LOCK-IT-100 and provide the clinical data required to support a marketing application for Neutrolin in the U.S. has been met. As Phoebe elaborated, the progress with the FDA has been tremendous. The high quality work the team invested in, the project has paid off. The team is now focused in parallel on the upcoming FDA meeting and the continuing preparation of the NDA components. Jack discussed the Company’s current effort on both the CMC and supply chain work for the U.S. market. And Bob provided insights into the current balance sheet and cash flow. If approved, we believe Neutrolin will become the standard of care for preventing catheter related bloodstream infections in the population of CVC users. I'm very pleased with the strength of our management team, and we will continue to evolve by augmenting our team over the coming quarters in areas of strategic need. I'm also confident that the strategy we embarked on in early 2017 will continue to move study works forward at an ever increasing pace. I look forward to providing you with material development and updates via our CorMedix website, press release and conference calls. Thank you for your continued support of CorMedix. And now, I'll hand this back to the operator.

Thank you. The floor is now open for questions. [Operator Instructions] Our first question comes from Ram Selvaraju of H.C. Wainwright. Please state your question.

Thanks very much for taking my questions. So, I just wanted to know if you could elaborate the structure regarding environment for Neutrolin, particularly as this pertains to three important aspects. Firstly, the pricing framework, especially as this pertains to the Transitional Drug Add-On Payment or TDAPA, which I believe you talked about previously, but I wanted to ascertain what you think are potentially the principal impacts or key takeaways from CMS proposed changes to the TDAPA framework. Secondly, if you could talk perhaps about the specific CMS codes that might be applicable to Neutrolin? And in particular, what positive impact there may be from CMC’s decision to shift to a quarterly J-code schedule. And lastly, if you could perhaps talk about the category of drug that Neutrolin would be most likely to fall into, and what this could potentially mean from the perspective of formulary positioning and the broader reinvestment access beyond the Medicare and Medicaid context? Thank you.

Thanks, Ram, for your questions. Let me take a stab at answering it. So, in terms of the pricing framework, I think, the way things stand right now is very good. TDAPA strides to narrow the focus that they have got and where they would allow products to be outside of the bundle clearly to products that bring innovation to the marketplace, a new chemical entity clearly fits into that, and Neutrolin will obviously benefit out of it. In terms of doing the review, the J-code that you have requested on a quarterly basis than what they were doing previously actually is a benefit because you do need to get these codes. And more frequent addition of these codes, depending on when you get your approval, helps newer products that come to the market, get these J-codes faster than what would have happen normally because you may have missed the deadline and have to wait a long period before you get it. In terms of formulary, it’s a bit early right now to comment on it. Clearly, in terms of catheter lock solutions, the only catheter lock solution that is used out there is heparin. What we have seen from our data and our market research that we’ve done, we would clearly be a significant improvement to what heparin is in the marketplace. And therefore we will be working with the formularies to get Neutrolin on to the formularies as soon as possible.

Great. Thanks. And then, just very quickly a follow-up if I may. Regarding the NDA filing process, can you give us a sense, just refresh my memory as to whether this is going to be a modular filing process, how many modules you expect there to be, and what kind of timing intervals there would be with respect to the submission of the different modules under the rolling submission? Thank you.

Thank you for the question. That’s very insightful. You clearly understand some of the issues that need to be addressed with FDA at the pre-NDA meeting. So, there are lot of administrative details that need to be addressed. And you pointed out the option of a rolling submission. As I noted in my comments during the call, we have received Fast Track designation from FDA that makes us eligible to request rolling submission from FDA. And so, if that request is granted, then we will be in a position to select specific modules and sequence for submission to FDA, and that’s part of negotiation. As I’m sure a lot of you are aware, part of the challenge for the CMC package is to have preapproval inspection scheduled and completed by FDA during the review process. So, there is clearly advantages in having the CMC section going first, so those preapproval inspections can be assigned and completed by the agency as fast as possible. The clinical section clearly is very important for the successful review and approval of NDA. So, that's another section that may be considered for priorities for submission. So, certainly, the sequence and the timing of the submissions of the module will be discussed with FDA and negotiated and agreed upon at the pre-NDA meeting. Thank you.

So, just as a clarification though, the timing of the intervals between the module submission, I would assume that if the data -- the information is readily available, it wouldn't take more than a few months between the different module submissions, right?

Few months is a long time. We're working very hard to make that much shorter. Thank you. We're doing it as fast as we can, and certainly moving as efficient the process as we can gather forces to do.

Thank you so much. I appreciate it.

And ladies and gentlemen, this will conclude our question-and-answer session. I will now turn the conference back over to Khoso Baluch for closing comments.

Thank you very much. And I’d like to thank everyone for attending this call. We really appreciate your support. It's an exciting time for the Company as we enter this next phase. The opportunity is there. So, I have a great team here with us. And clearly quality is what is going to be very important as we continue to go forward and bring Neutrolin to the market. So, thank you very much for all your support. Thank you.

Thank you. This does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time and have a great day.