Good day, and welcome to the CorMedix Third Quarter 2025 Earnings and Corporate Update Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Daniel Ferry of LifeSci Advisors. Please go ahead.

Thank you, operator. Good morning, and welcome to the CorMedix Third Quarter 2025 Earnings and Corporate Update Conference Call. Leading the call today is Joe Todisco, Chief Executive Officer of CorMedix; and he is joined by Liz Hurlburt, EVP and Chief Operating Officer; and Susan Blum, EVP and Chief Financial Officer. In addition, Beth Zelnick Kaufman, EVP and Chief Legal and Compliance Officer; and Dr. Matt David, EVP and Chief Business 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 meaning set forth in the Private Securities Litigation Reform Act of 1995. These statements are statements other than statements of historical fact 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 CorMedix filings with the SEC, which are available free of charge at the SEC's website 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. CorMedix 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. GAAP to non-GAAP financial reconciliations and supplemental financial information are provided in CorMedix earnings release and the current report on Form 8-K filed with the SEC. This information is available on the Investor Relations section of CorMedix website. At this time, it's now my pleasure to turn the call over to Joe Todisco, Chief Executive Officer of CorMedix. Joe, please go ahead.

Thank you, Dan. Good morning, everyone, and thank you for joining us on this call. This has been an exciting quarter in the evolution of CorMedix as we announced and closed the acquisition of Melinta Therapeutics in a combination of cash and stock transaction. This deal is transformational for CorMedix creating a diversified specialty pharmaceutical company with a broad portfolio of commercial and late-stage pipeline products. Integration of the legacy CorMedix and Melinta operations has progressed faster than originally expected. As we announced in October, we expect to capture approximately $30 million of the projected $35 million to $45 million of total synergies on a run rate basis before the end of 2025. I'm excited to announce today that as part of our integration, CorMedix, Inc. will be rebranding as CorMedix Therapeutics, and all employees will unify under this company name. We're also adopting a new logo to signify the go-forward organizational commitment to develop and commercialize novel therapies for the prevention and treatment of life-threatening conditions. This past quarter marks the most successful quarter from a financial perspective in company history, registering record levels for revenue of $104.3 million, net income of $108.6 million and adjusted EBITDA of $71.8 million. Our revenue performance was largely driven by faster-than-expected adoption by our DefenCath LDO customer, utilization growth from our existing customer base as well as partial quarter contribution from the Melinta portfolio assets. Based on the recent momentum, today, we are raising our pro forma combined full year revenue guidance from a minimum of $375 million to a range of $390 million to $410 million. In addition, we are increasing our previous guidance for pro forma fully synergized adjusted EBITDA for 2025 from a range of $165 million to $185 million to a new range of $220 million to $240…

Thank you, Joe, and good morning. The combined clinical development and operation teams, along with field medical affairs have been working diligently on numerous clinical activities. As we shared in late September, enrollment for the global Phase III ReSPECT study evaluating Rezzayo for the prophylaxis of fungal infections in allogeneic bone marrow transplant patients has completed. This pivotal trial is being conducted by our global partner, Mundipharma, and the team has begun to progress the program in anticipation of study closeout. The team continues to work closely with investigators and clinical experts in the field to deepen our understanding of the evolving clinical practices and needs of these patients. We expect to announce top line results from the ReSPECT study in the second quarter of 2026. Turning to DefenCath. I'm pleased to share that the Phase III Nutri-Guard clinical study, which evaluates the reduction in central-line associated bloodstream infections or CLABSI for adult patients receiving total parental nutrition via a central venous catheter has garnered international interest. In the coming months, we will expand clinical study sites into Turkey to broaden the diversity of patients and potentially expedite enrollment time lines. At this time, we are still anticipating study completion by the end of 2026 or early 2027. Lastly, our real-world evidence study in collaboration with U.S. Renal Care has entered the second year of data collection. The team is currently conducting an analysis of the first year of data, and we anticipate sharing those interim results by the end of this year. This study is designed to demonstrate the real-world effects of the broad use of DefenCath in a real-world setting and examines not only the reduction in catheter-related bloodstream infections or CRBSI, but also reduction in costly infection-related hospitalizations. Secondary data points of missed treatment sessions, antibiotic utilization…

Thanks, Liz, and good morning, everyone. We are pleased to report our third quarter financial results, reflecting continued commercial momentum and a path towards sustained profitability. Our results demonstrate solid growth across the business, including strong performance from DefenCath and growth in the legacy Melinta product portfolio. We closed the Melinta acquisition on August 29, 2025, and therefore, 1 month of its operations are included in our consolidated financial results for the third quarter. The company has filed its quarterly report on Form 10-Q for the quarter ended September 30, 2025. I encourage you to read the information contained in the report for a more complete discussion of our financial results. As Joe mentioned, for the third quarter, net revenue was $104.3 million, including the DefenCath sales of $88.8 million, representing a total net revenue increase of $77.5 million year-over-year. The remainder of revenue totaling approximately $15.5 million reflects the contribution from Melinta for the month of September, $12.8 million of which was driven by Melinta portfolio sales. Operating expenses for the third quarter were $42.6 million compared to $14.1 million for CorMedix on a stand-alone basis in the same quarter last year. The increase of $28.5 million over the prior period includes nonrecurring costs of $12.7 million associated with the transaction and integration as well as severance costs associated with the Melinta acquisition. Other increases in costs were driven by stock-based compensation, OpEx contribution from Melinta's business and increased investment in R&D associated with expanded indications for DefenCath, including the Phase III clinical study for prevention of CLABSI and TPN patients. While costs have increased in these areas this past quarter, they are aligned with our previously communicated expectations and support our strategic priority, which is to position the company for long-term sustainable growth. In addition, as Joe mentioned,…

Thank you, Susan. The third quarter of 2025 marked a period of meaningful progress and disciplined execution. We advanced our strategic objectives, strengthened our financial foundation and delivered solid results while completing a transformative acquisition. The company now has a diversified product portfolio, multiple late-stage pipeline opportunities, financial flexibility and a diversified capital structure to support future growth. We remain confident in the outlook for the remainder of this year and the path to sustained growth and profitability. I'd now like the operator open up for questions.

[Operator Instructions] Our first question comes from Les Sulewski with Truist.

Congrats on the progress. First, on DefenCath, do you have a sense of inventory stocking versus utilization in 3Q and we understand you're not providing guidance for next year at this time. But how should we think about potential seasonality throughout the year? Or how ordering rates could impact quarterly revenue cadence? And then outside of additional cohort expansion, is 4Q implied guidance, I guess, a good representation of a normalized utilization patterns? And I have a follow-up.

Thanks, Les. I'll try and make sure I get all these right. So in terms of third quarter stocking, I think our smaller customers from what we've seen are holding on average about 2 to 3 weeks on hand. The LDO is somewhere between 3 to 4 weeks, and I think that's what we saw normalized. I'd say there was probably a couple of million dollars shipped at the cutover if you're trying to kind of back into third quarter versus fourth quarter DefenCath revenue and kind of where we're trending. So there was a couple of million dollars right on that cutoff that probably that ended up getting captured in Q3 that a day later is going to be in Q4. But for the most part, I wouldn't say there's a significant amount of stocking in Q3, just normal stocking that they hold on hand. The second question, I believe, was about quarter-to-quarter guidance and seasonality. The business, certainly we'll separate the DefenCath business from the Melinta business, doesn't have a historic seasonality in terms of times of the year where patients receive hemodialysis more than others. As we've been progressing over the last 2 years and we've added new customers, we've added new cohorts, we've continued to see, right, an increase in utilization and growth in overall revenue. Obviously, I think there's a lot of eyes focused on next year. I don't know at what point we're going to be ready to provide financial guidance for 2026. I think everyone is aware, just by the nature of TDAPA and the change that comes in July, there should be a little bit of front-endedness, right to the overall revenue, not necessarily utilization for the overall year, and we're still trying to figure out what the full year is going…

I do. It is on TDAPA actually. So is the real-world evidence that mutually inclusive with agreements on final pricing around the post-TDAPA period. Can you provide maybe some sort of a sense of your inklings into the price negotiation period into -- heading into July on the TDAPA side?

Well, look, you have to separate, the real-world evidence in our view is going to be most applicable and useful with Medicare Advantage, right? Medicare Advantage is not bound by the post-TDAPA add-on. They have the flexibility to contract separately, right? That's the strategy we want to employ. We have very little market share right now of Medicare Advantage patients, and we think it's a compelling value proposition for the MA plan. Ultimately, they are the payer of those downstream costs, those hospitalizations that drive so much cost in the health care system. So we want to, obviously, with data, make the argument that investing in prevention, right, is going to save them a significant amount of value. On the traditional Medicare side, there's not much of an opportunity for negotiation, Les. It's really based on when the ESRD final rule publishes, what they ultimately determine is going to be the fee-for-service adjustment, and we'll work around that once it's published.

And the next question comes from Jason Butler with Citizens.

Congrats on the quarter. Two for me, Joe. First one, you mentioned that the ordering from the LDO has been faster than you'd expected. 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? And then secondly, when we think about the real-world data coming at the end of the year, can you just give us some color about what to expect in terms of the number of patients, the endpoints and how we assess the benefit here relative, for example, to the Phase III results, if that is at all relevant?

All right. Thanks, Jason. So -- yes. So the LDO, it wasn't just a matter of ordering, right, faster, right? The data we're getting from inventory on hand demonstrates that the utilization is also faster than what we expected in the ramp. And I know that we had guided previously that the expectation was to target an initial rollout of 6,000 patients. We don't have today an exact number of where we are. We believe we are significantly higher than 6,000 patients. And we're -- so we're pleased with the rollout, but we don't have the ability to give a patient number at this time. In terms of kind of the stratification, I don't know if you were asking about high risk or type of insurance. We don't have great visibility into that data. I think our expectation is that it's mostly fee-for-service patients at this time and that there's an opportunity with Medicare Advantage. On the real-world evidence question, I'm going to ask Liz to address.

Sure. Jason, so we are expecting the year 1 results to come out later this year. It's approximately 2,000 patients. So we're double what we had in our Phase III LOCK-IT study. And we expect that we're going to read out data on the reduction in actual CRBSI, reduction in hospitalizations due to CRBSI. There are some secondary endpoints we're looking at as well, missed treatment sessions, utilization of TPA and antibiotic utilization. And those are all being compared to the historic infection rates. So we should have that out sometime in the next 6 to 7 weeks.

And the next question comes from Roanna Ruiz with Leerink Partners.

So a couple from me. First one is, given some of the trends you're seeing in DefenCath utilization so far, how should we think about the second half '26 revenues and pricing dynamics post TDAPA? And what are some of the pushes and pulls that could drive DefenCath revenues either higher or lower after this TDAPA period?

Thanks, Roanna. As I think I said to Les, we're not in a position to give a lot of clarity right now on that back part of '26. Obviously, we do know there's going to be price compression, right, because it's going to shift from the ASP method into the post-TDAPA add-on absent the passing of legislation that is currently pending before the Senate. But the pushes and pulls would be related to how CMS does the calculation for utilization. The method that they had proposed in the proposed rule, which we commented on would have created or will create a dynamic where the adjustment for Q3 and 4 of '26 is lower than the adjustment for '27. And if that's the framework, I think we're prepared to work around that. We're just waiting for a final determination in the final rule, which was expected a couple of weeks ago. I know the government shutdown has delayed quite a few things. We're expecting it to come any day now. And once we have that, we'll be able to finalize things with customers and just continue moving forward.

Got it. That's helpful. And another quick follow-up for me. I was curious, with your discussions with customers into the post-TDAPA period, what are some of the goals of these discussions? And what data are you bringing forward right now to help those discussions as well?

Well, look, I think the real-world evidence data is going to be critical, right? And that should be -- it's interim midpoint data available by the end of the year. And I think the ability to demonstrate the impact on the health care system is an important one. We've gotten anecdotal feedback from multiple customers that they've seen a noticeable difference, right, in their infection rates. I know that's not data, right? But it's -- if they are feeling it and visually seeing it, certainly that's a positive and something that we will want to build on.

And the next question comes from Brandon Folkes with H.C. Wainwright.

Congrats on all the progress. Two from me maybe, just firstly, any color on how you're viewing the DefenCath inpatient opportunity? How is that progressing? And how do you expect that to progress in '26, just given the scale and relationships that Melinta brings in that setting? And then maybe secondly, just changing gears to Niyad. How are you thinking about that investment well in Talphera, but sort of Niyad as a product? It seems like a product you can sort of simply drop into your commercial infrastructure and drive pretty strong EBITDA accretion on day 1. Is that how you think about the product? Or do you think there's material investment required behind that opportunity should you execute on your option?

Thank you, Brandon. So look, on the inpatient side, I think we're continuing to -- over the course of this year, we've seen good progress. I'd say it's a drop in the bucket compared to the magnitude of what we've seen outpatient, but it has been good steady growth over the course of the year. As Liz mentioned in the script, starting next year, as we are migrating from the legacy contracted field team that was inpatient for CorMedix into the new combined field team post-Melinta integration, we'll be training that team in December on DefenCath. And in January, they'll begin promoting in the inpatient segment. So I do expect to continue to see lift there as a good opportunity for growth. As we talked a lot about over the last 2 years, while the inpatient volume might be lower, right? The pricing there is a little bit better and the revenue per patient higher, right? So it's a good profit opportunity, right, for DefenCath in the inpatient setting. On Niyad, obviously, we did the strategic investment because we like the product. We like the fit with us from a commercial infrastructure standpoint. We're going to continue to watch the clinical results and evaluate the opportunity. I don't know that I'm prepared to comment that no investment, right, would be required, Brandon, if we were to acquire the business. Obviously, there's an investment if we were to acquire Talphera. I imagine there's some amount of marketing expense related. But I think from a sales deployment standpoint, our current expectation is it fits very well with our existing call points.

And the next question comes from Serge Belanger with Needham & Company.

A couple for us, Joe. The first one, can you just give us an update on the pricing of DefenCath over the third quarter? And then on TDAPA, it sounds like the ESRD rule is going to determine the calculation for post period starting in July. Are you going to be able to provide guidance once the ESRD rule is published? And then secondly, are you aware of any legislation bills in Congress that could modify the TDAPA reimbursement?

All right. Thanks, Serge. In terms of specific pricing on DefenCath, obviously, we don't give that. We have guided historically that quarter-over-quarter, there is a slight erosion based on the structure of the agreements. We track -- typically, our ASP is a discount off -- our selling price is a discount off government ASP, which has kind of tracked down quarter-over-quarter, but volume has obviously grown significantly to more than offset the changes in price. So I think the TDAPA rule and the methodology will inform. We set agreements in place with all of our customers, right? And there were formulas laid out for how pricing needs to be determined. I think one of the things we're waiting to see is that dynamic whether or not CMS uses a methodology where the Q3 and Q4 of '26 will be lower than '27. And if that's the case, we may try to negotiate a blended price over a period of time. But that's really the only nuance that we're looking at. I don't -- again, I don't know that I would want to give any customer-specific pricing, but we should be able to talk a little bit more directionally in the early part of next year about what we're going to see for the back part of the year. And then lastly, in terms of the legislation, there is a bill that was proposed by Senator Booker, Marsha Blackburn, bipartisan bill that would make significant changes to TDAPA in terms of incentivizing innovation. I think most importantly, it would expand the ASP-based pricing period from 2 years to 3 years. It would make the post-TDAPA add-on permanent, but also have that add-on track drug utilization in terms of that we follow drug utilization. Right now, the methodology CMS uses, they bundleize based on market share of total dialysis, irrespective of whether drug is dispensed. The proposed methodology in the legislation would allocate that market share based on percentage of drug claims submitted over time. And I think that's certainly a better measure and hopeful that, that legislation can make its way into law in the early part of next year. I know the government shutdown has stalled quite a few things. But hopefully, the new Congress in early '26 can advance that forward.

I'll now pass it to Dan Ferry for written questions from the audience.

Thank you, operator. Joe, we had quite a few here, but it looks like a lot of them were covered during the live Q&A. I do have one additional one, though that you might help us out with here. What do you think is misunderstood regarding the Melinta transaction? And why are investors not crediting the value of Melinta?

I mean, thanks, Dan. I just chuckled a little bit because as I was going through all of the analyst questions, it struck me we didn't get a single question on Rezzayo, on the potential impact, on how we're viewing Melinta, right? And I think there's obviously a lot of historic focus on DefenCath and for good reason, right? It's the largest revenue driver in the business currently. But when I look at what -- why we did the acquisition of Melinta, what it brings to the table, I certainly do think there's a lot of things that are not currently being appreciated, one of which is the stabilizing factor of the base business that was acquired from a risk mitigation standpoint, right? We got quite a few questions around what's going to happen in the back part of the year next year with DefenCath. And the Melinta base business gives us a good stable base of revenue from which we're able to take operating synergies and really entrench the business. Second, I think Rezzayo prophylaxis as a pipeline opportunity is certainly not being valued appropriately. This has the potential to be a larger peak sales product than even DefenCath, right? You've got a total addressable market over $2 billion. You've got a market segment that is already getting prophylactic antifungal therapy, right? These patients that are immune compromised. So it's not as if we have to change patterns. Similar to the launch of DefenCath, where nothing was being done prophylactically, we really had to change mindsets. This is a different situation where prophylactic action is already being taken and the standard of care has some deficiencies with it, right? The severe drug-drug interactions, I don't think should be discounted. The ability to shift to weekly dosing to perhaps increase convenience for the patients as well as a large amount of the dosing or administration would be in an outpatient hematology/oncology clinic setting, which is buy-and-bill reimbursement, right? So I think there's a lot of favorabilities and opportunity around Rezzayo prophylaxis as a future growth driver of the business as well as TPN, right? I think we're excited about the opportunity for TPN. We've just done some updated internal market research, right, that has confirmed how high the infection rates are in that patient population, how much the doctors are looking for an intervention. So I think we're excited about the future growth prospects for the business outside of hemodialysis. And I think that's -- those are important catalysts that I think investors need to start focusing on.

Excellent. Okay. Thank you, Joe. Operator, you may now close the call.

This concludes our question-and-answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.