Randy Milby - Chief Executive Officer Tony Pfaffle - Chief Scientific Officer

Scott Henry - Roth Capital Partners Adam Cohen - Rodman & Renshaw Doug Schwegel - private investor

Greetings and welcome to the CorMedix Third Quarter 2015 Results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star, zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Randy Milby. Thank you, you may begin.

Good morning and welcome to the CorMedix third quarter 2015 investor conference call. In the room with me, who will be available during the Q&A portion of the conference call are Jim Altland, our interim CFO; Dr. Tony Pfaffle, our Chief Scientific Officer, and Jack Armstrong, our EVP of Technical Operations. First, I want to remind you that this conference call may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. All statements other than statements of historical facts regarding management’s expectations, beliefs, goals, plans, or the company’s prospects, future financial position, future revenues and projected costs should be considered forward-looking. Forward-looking statements include statements about our clinical development plans and timing, regulatory actions, and cash needs. Our actual results may differ materially from these projections or estimates due to a variety of important factors, including uncertainties related to clinical development, regulatory approvals, and commercialization. These risks are described in greater detail in CorMedix’s 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. Thank you for joining us. We are encouraged about the ongoing progress that we have made and expect to continue to make at CorMedix, both from a standpoint of strategically positioning the company for long-term success as well as executing tactically this quarter. I want to update you on several important areas: clinical development, scientific affairs, financial and operations. I believe we are well positioned in each of these areas to advance the company and position it for commercial and financial success. First, in terms of advancing our clinical development program, we remain on track to initiate during the fourth quarter of 2015 the first U.S. Phase III clinical study to evaluate Neutrolin in hemodialysis patients. This study, named LOCKIT [ph], for catheter lock solution investigational trial received IRB approval for the first several trial sites, and we expect to have our first patient enrolled later this month. We are focused on the successful initiation and execution of this study. In addition, we have received guidance from the FDA on the protocol design of our planned second pivotal Phase III study in oncology TPN and are in the process to finalizing the details of this study. Second, from the scientific and medical community there is a growing body of data which supports the use of Neutrolin. Data from the Neutrolin Usage Monitoring Program, a post-marketing surveillance survey conducted at sites in Germany continues to demonstrate the efficacy of using Neutrolin in patients with central venous catheters with more than a 95% reduction in infection and thrombosis as measured against the current benchmark and data to date. Third, I want to emphasize that CorMedix is on solid financial footing. We have approximately $37.8 million in cash and short-term investments on our balance sheet as of September 30, 2015. More importantly, this position enables us to confidently initiate the Phase III clinical study in hemodialysis patients. Fourth, we are considering opportunities to explore clinically the use of taurolidine in new areas of treatment, and of course where we have done preliminary work and have developed new practices, we are seeking to protect our intellectual property. As such, we have filed provisional patents in five areas: anti-microbial sutures, nanofiber webs, wound management, osteoarthritis, and visco-supplementation. We believe that taurolidine has the potential to address unmet medical needs in each of these important areas. Based upon post-operative infection rates, there is a clear need to control and protect against surgical site infections upon closure with sutures, and we believe taurolidine could offer benefits not currently available in the market in anti-microbial sutures. We also believe that the nano-fiber webs used for absorbable meshes could benefit from taurolidine’s demonstrated effect to reduce inflammation and promote infection control. Taurolidine also could incorporated into fibers or hydragels in connection with wound management, especially in the case of severe wounds that have occurred in less sterile environments or in burn patients. Lastly, incorporating taurolidine into formulations for osteoarthritis and visco-supplementation may be useful in light of taurolidine’s anti-inflammatory and anti-infective properties. In summary, I am very pleased with our accomplishments during this last quarter. Now I’d like to give you a more detailed update on the key near and longer-term catalysts that could drive CorMedix’s growth and provide new opportunities for the company. First and foremost, clinical development of Neutrolin. As you know, Neutrolin is a Class 3 medical device in the European Union but the FDA regards it as a drug for purposes of regulatory approval in the United States. As we discussed during previous calls, the FDA’s Division of Anti-Infective Products and CDER has approved the initiation of a pivotal clinical study to be conducted here in the United States. This month, we expect to begin enrolling patients in LOCKIT, a pivotal Phase III clinical study for the use of Neutrolin in patients on a central venous catheter line associated with hemodialysis, with an anticipated enrollment of approximately 632 patients in approximately 70 centers. We expect to have an interim analysis when we have half the patients enrolled or six months after the first enrollment, whichever is earliest. Site selection is a critical aspect, and we are working closely with the clinical research organization PPD in this regard. The IRB documents have been reviewed and approved for our initial group of clinical investigation sites. As we have discussed on previous calls, it is estimated that there are approximately 127 million catheter days in hemodialysis in the United States per year. A projected unit usage in this market is 0.44 vials per catheter day, so there is a substantial market opportunity here if it is supported by the clinical data. Last quarter, we received guidance from the FDA on the acceptable design of the second pivotal Phase III clinical protocol. This study is planned to have approximately 560 patients for a new indication in oncology patients undergoing total parenteral nutrition treatment. We are working with the FDA to finalize the remaining details of this second study. It is estimated there are approximately 90 million catheter days due to the treatment for various kinds of cancer, but the projected unit usage as a lock and a flush is higher in this market than in hemodialysis with approximately three vials or cartridges used per catheter day. In each of these studies, the patients will be monitored for catheter-related bloodstream infections and the relevant comparison will be Neutrolin versus heparin or saline alone as a control arm. In addition, we are planning to develop a smaller 200-patient Phase IV study to further elucidate the use of Neutrolin for critical care intensive care patients as part of the Neutrolin label. It is estimated there are approximately 20 million catheter days in the ICU/CCU setting in the United States each year. This market has the highest unit usage per patient - approximately seven vials or cartridges per catheter day when used as a lock and a flush, based upon our market research. As has been previously discussed, we received fast track designation from the FDA for the review of Neutrolin in the prevention of catheter-related bloodstream infections in patients receiving hemodialysis. Fast track designation is intended to encourage the development and expedite the agency’s review of drugs to treat serious conditions and address unmet medical needs, so naturally we are encouraged by this designation and the signal that it sends as to the potential importance of Neutrolin as a prophylactic agent in reducing rates of infection. Importantly, products designated as fast track are eligible to obtain rolling review of the marketing application that may lead to an expedited approval. In addition, Neutrolin has been designated a qualified infectious disease product - QIDP, under the Federal GAIN Act, which provides incentives for the development of new anti-microbials. This provides for an additional five years of market exclusivity after the drug approval, beyond the standard five years granted to a new chemical NC. When combined with the possible additional extension for pediatric use, this means that Neutrolin could enjoy an aggregate period of post-approval exclusivity in the United States of as long as 10.5 years from the date of launch. In our efforts to gather additional clinical data to support future marketing and reimbursement, we initiated a 200-patient post-marketing registry study, the Neutrolin Usage Monitoring Program, in selected dialysis centers and hospitals throughout Germany. We have to date recorded 0.127 infections and 0.095 thromboses during 1,000 hemodialysis catheter days. This compares favorably to the numbers from the literature in which you would ordinarily expect on average 3.5 infections and 2.5 thromboses per 1,000 catheter days. As another way of looking at this, we recorded four infections when you’d otherwise expect 110 infections, and we recorded three thromboses where you’d otherwise expect 79 under the current standard of care. This more than a 95% reduction in infections and thromboses. This is very encouraging. Although this study is not designed with the power to show statistical significance, we believe that this provides compelling anecdotal evidence demonstrating the anti-infective, anti-clotting value of Neutrolin. It also makes us feel better about initiating the U.S. Phase III studies where we believe we have de-risked the normal clinical risk in the FDA approved protocol because it requires only a 40% reduction in the rate of infection. We are encouraged by these results, and as a result we are planning to start an expanded program to collect catheter blood flow data and assess and analyze biofilm formation. As I mentioned, the company is in solid financial condition with a current cash balance of approximately $38 million. We have approximately $13 million remaining and available for issuance under the ATM vehicle if we choose to use it. We currently have 35.4 million shares outstanding and fully diluted, and without taking into account the ATM availability, we have 49.7 million shares -that includes options, warrants, and convertible notes. Now let me address briefly our ongoing efforts to drive overseas sales and distribution of Neutrolin. We continue to selectively add regional distributors with our geographic focus mainly on the Middle East, where we believe we are making solid progress in Saudi Arabia, Bahrain, Qatar, Kuwait, United Emirates and several other countries. We have worked with our partners to successfully register the product and have submitted government tenders in a bid process that is different from what we are accustomed to seeing in the west. The U.S. market potential appears robust, which would support our market opportunity projections. Using numbers described earlier, we believe this could be greater than a $1 billion opportunity. We believe there is a real need for this product and a high level of receptivity to using it. As you know, the market potential is not characterized as a single opportunity as there are clear needs involving patients in hemodialysis, oncology, critical care and intensive care. As we launch and execute our several clinical studies, we plan to evaluate these various opportunities, including physician interest and reimbursement prospects in light of CMS guidelines and the quality metrics established under the Affordable Care Act. To that end, we had two health economic abstracts presented last week at the American Society of Nephrology, and we have a third health economic study under publication review in a peer-reviewed critical care journal describing the economic burden of central venous catheter bloodstream infections and thrombosis. Of note is the recent release of the in-stage renal disease prospective payment system final rule from the Centers for Medicare and Medicaid Services, or CMS, as it proposed an approach to pay for new drugs that suggests the agency is open to considering alternative reimbursement schemes for products that have been designated as priorities by the FDA under the GAIN Act or the Qualified Infectious Disease Product Act. We are going to be working with the CMS to discuss Neutrolin specifically and hope to position it favorably in light of this potential to reduce infections and lower healthcare system costs. In summary, this quarter has been an important period for advancing the company. CorMedix is on the verge of initiating our first U.S. Phase III trial for Neutrolin in hemodialysis, the LOCKIT clinical study. We look forward to our first patient enrollment in the LOCKIT clinical study expected later this month, with an expected interim analysis in six months. We continue to collaborate with regional marketing partners that will further expand the availability of Neutrolin to patients in additional countries, including the Middle East where we are seeing increased acceptance. We have presented two health economic abstracts that articulate the potential value of Neutrolin, and we are executing a publication plan to publish a third article in a peer-reviewed critical care journal. We continue to assert our intellectual property rights in the context of patent infringement and unfair competition law claims brought in Germany, and we continue to execute on our plan to reduce our cost of goods. In the end, it comes down to execution. We have added clinical expertise to our team that we believe will enable us to do just that, people who have done it before and know how to complete a clinical study and launch anti-infective products. Now I would like to review the financial information that was filed yesterday on the 10-Q with the SEC. For the quarter ended September 30, 2015, CorMedix recorded a loss of $4,689,000 or $0.14 per share versus $5,062,000 or $0.23 per share in 2014. The improvement in loss per share is primarily due to an approximately 12.5 million share increase in the number of weighted average common shares outstanding, basic and diluted to 34,586,000 versus 22,081,000 shares. In 2015, the company had higher R&D and SG&A expenses of $2,834,000, and this was offset by charges in 2014 for the change in the fair value of derivative liabilities, modifications of equity instruments, and the extinguishment of derivative liabilities totaling over $3 million. The three-month cost drivers for the increase in R&D expenses were manufacturing, preliminary clinical trial preparation, consulting, non-cash stock-based compensation, and commercial research. For the nine months ended September 30, 2015, the company recorded a loss of $14,354,000 or $0.48 a share versus a loss of $18,321,000 or $0.87 per share in 2014. The improvement in loss per share was primarily due to an increase of 8,920,000 shares in the number of weighted average common shares outstanding, basic and diluted. For the nine months ended September 30, 2015, R&D and SG&A expenses increased by $7,757,000. This was offset by a charge of $11,400,000 for the change in fair value of derivative liabilities and modification of equity investments, and extinguishment of derivative liabilities in 2014. The nine-month cost drivers for the increase in R&D expenses were manufacturing, preliminary clinical trial prep, commercial research, and consulting services to support the manufacturing and preliminary clinical trial preparation. For the nine months ended September 30, 2015, the company raised $42,423,000 from the sale of common stock, exercise of warrants, and stock options. In 2014, the company raised $8,349,000 through the sale of preferred shares, exercised stock options, and equity securities. For the first nine months of 2015, the company used cash in operations of $8,892,000 versus $4,747,000 in 2014. The company is in a strong cash position with approximately $38 million of cash for short-term investments on the balance sheet at September 30, 2015. This compares to only $3.4 million at September 30 last year. Management has been focused on positioning the company for initiation of the Phase III clinical trial later this month in hemodialysis patients. I will now turn the call back over to the Operator who will open up for questions and answers.

[Operator instructions] Our first question comes from the line of Scott Henry from Roth Capital Partners. Please go ahead with your question.

Thank you and good morning. I guess just to get started, revenues in the quarter took a dip down from the second quarter rate. How should we think about that number going forward? Should we expect it to bounce back considerably or just kind of start working its way back up? Just trying to get an idea of what to be thinking about for the revenue line.

Well as I mentioned in the call, Scott, that’s a good question. Part of it has to do with it’s a tender business, so it’s going to be a little bit choppy as we bring more countries on. As I’ve mentioned to some people before in some of my other presentations, we’ve registered the product in a number of countries. There are several of the countries that we’ve registered the product that I didn’t mention, because I only mentioned the countries where we’re actually selling, and these countries now, since it’s a tender process, it’s going to be a little choppy as the orders come through. So it’s going to be trending up, but you’re going to see a few down months, and part of that was just when we wanted to ship and when we get paid.

Okay, I’ll take a shot at that, then. Then I also just wanted to check on the expense side, going into 2016, I’m guessing SG&A should resemble the Q4 rate, but what about R&D? When should I expect that to spike up? Should I start to see a spike in the fourth quarter as you start the trial, continuing into 2016? Just trying to get an idea of where that number is going to go.

Yes, you should start seeing it go up in the fourth quarter because there’s going to be more expenditures with PPD as we enroll the patients, and then it will escalate into the 2016 time frame.

Okay. Final question - it sounds like the first trial is right on track. Would you still be looking for that interim analysis to happen sometime around the summer of 2016 and then data in first half of ’17? Is that still the target?

Yes, so as I mentioned on the call, it’s six months or--it’s actually event driven, so when we have 81 events, that’s when we’ll do it. But a good ballpark right now is six months, so I’m kind of envisioning that June-July time frame. That goes back to the importance of site selection, and Dr. Pfaffle is spending a lot of time on that, because what we’ve done is we’re looking at those sites which have a higher infection rate, and those are the ones we’ve targeted for the initial enrollment.

Okay, so is it six months from when the first patient comes in, or is there a critical mass of patients you need to have?

It’s 81 events, and so I would start the clock on the six months in that January time frame because we’re enrolling patients in November and December, but you’re going to see heavier enrollment in that January time frame, January-February. Tony can add a little color to that.

Sure. Scott, we’re physically on the ground, visiting the dialysis centers and basically making sure that everything is up to speed for this. So to Randy’s point, we believe that once we start enrolling, we’re going to have the wind at our backs and that we’ll get to that point, and that’s the method of what he described as spending a lot of time hand-picking the centers, make sure they have the right percentage of catheter use, the right infection rate so that you’re essentially targeting those centers that are most likely to yield the events. So you know, we’re optimistic that we will get there in the time frame that Randy described.

Okay, great. Thank you for taking the questions.

You’re welcome.

Thank you. Our next question comes from the line of Adam Cohen from Rodman & Renshaw. Please go ahead.

Yes, could you please tell me about your search for the CEO, a new CEO, and how that’s going?

Absolutely. As you well know, the process is well underway. We’re working with Korn/Ferry International - it’s a leading search firm, and it may take some time to find the right person. I am committed to remain on the job until we do with the support of the board of directors. So the board interviews the candidates, we’ve interviewed several candidates, and it’s boiling down to just finding the right person.

Okay, thank you very much. Does the termination of the license agreement with Polaschegg mean that CorMedix is no longer working on any gel formulations for taurolidine?

No, actually that’s why I put a little more emphasis on the call today about some of those provisions patents. On the wound management, that patent is the hydragel, so that is in the gel. What we did is we have a small team that’s working on--I’ve talked previously about having a taurolidine franchise, so we have a small team with a physician and another clinical development person looking over the Polaschegg patents and the estate that we had and what we could do with that, and maximize the value of taurolidine. What we did, we determined that the CRMD004 gel technology patent targeting the catheter lock was narrow in scope and it limited the market potential, so based upon our technical analysis of the other patents under the Polaschegg license agreement, we determined that extensive investment would be required to strengthen these patents. So upon termination of the Polaschegg license, all rights were returned to the Polascheggs.

Okay, thank you very much. I appreciate you taking my questions.

Pleasure.

Thank you. Our next question comes from the line of Doug Schwegel [ph], a private investor. Please go ahead with your question.

Good morning, Randy.

Hi Doug.

I got on the call late, so if some of my questions are redundant, I apologize in advance. Could you go over how you determine the valuations that you--you stated a market size, I think for dialysis, oncology and critical care settings - CCU, ICU as potentially over a billion dollar market. How would you value the potential market for the gel formulation?

Right, and this will surely be on the website, but just in a nutshell, for the Neutrolin we always talk about--I have it on there right now as the number of hemodialysis is around 700,000 patients on hemodialysis, and that’s 127 million catheter days. A patient would get one vial, and we’ve used the number 2.3 days, so in other words you get 0.44 vials per day, and then we’ve projected out the number of vials or cartridges. We did the same type of math in oncology. In oncology, we’re looking at Stage 3 and 4 tumor types on TPN. It’s 7,740,000 patients, and that’s 90,000 catheter days, and it’s one lock and two flushes, so that’s where I get the number three. Then on intensive care, 4 million patients, 20 million catheter days because it’s five catheter days per patient, and we used seven potential vials or cartridges per day because they’d use two locks and five flushes. One of the new things we’ve spent some market research on during this past quarter is drilling down into these spaces and talking with the physicians, and finding out they’d use a lock as well as you well know would use flushes, so we’ve incorporated locks and flushes into the calculation now. This is important in the U.S. market in particular because the product Neutrolin that has 1,000 units of heparin, that’s for hemodialysis. We’re going to bifurcate the market, though, on the oncology and the ICU markets, we’ll have a different SKU or a different product, that one will have zero heparin in it and the other will have 100 units of heparin. So that could be a cartridge market, whereas the hemodialysis would be a vial market.

I got you, so--

And Tony would like to interject.

Doug, looking at it, we vetted this with Ivy League ICU directors, so people like the professorial level who run large ICUs and also NCI cancer centers. So these numbers were for market research, but we also vetted them with the people who actually control those units.

I got you. So the ICU-CCU market, to me, that’s really a potentially huge market. I know we really focus on dialysis, we talk dialysis, dialysis, but the cartridge application in the critical care setting is potentially an enormous market.

Right, and that’s why, as I mentioned in the call, we have in a peer-reviewed journal, in a critical care journal the health economics or pharmo-economics data that will be published. This is another reason, as I’ve mentioned too speaking at the CMS on hemodialysis, but under the Affordable Care Act this is a big market and it’s a big opportunity for us.

When would you expect the publication in the journal, by chance? Have you got any kind of working time frame?

We’re anticipating by year-end. Right now, it’s under final review, so they just sent back some questions and we’ve followed up on those, so most likely by year end.

Okay, in the near term. All right. Next question is what are you looking at as far as financing options for the gel formulation, and where are you at on the provisional patent status for the gel formulations and the applications that you announced at the beginning of the call?

So what we’ve done on those five, we filed the five provisionals and the next step is to file a PCT patent, and we’re doing some basic research in two of the areas. We’ve already advanced the suture market area as far as putting taurolidine, incorporating it into the sutures, particularly absorbable sutures. For some of the other areas, we’re going to just take it up to a certain level to file the PCT patent, and we’ll take it out to some larger players in the suture space for potential partnerships after we’ve obtained that data. So that data will have--we already know it can be embedded in the suture, and now we’re looking to see how much infection control it has and MIC that those sutures could have. The other--several of the other areas, we’ve started to initiate the product to solicit SPIR graphs [ph], and we’re looking at different sources of funding and having some initial discussions with DARPA and other organizations like that.

What time frame on the first thing would you be kind of looking at, six to 12 months or--?

For the sutures, we anticipate to have this data by year-end and be speaking with potential partners by the first quarter of next year.

Great, fantastic. Let’s see here - I think we addressed the CEO search. Could you give us a little update with regards to Germany and what’s upcoming, and all that please with regards to the suit that you’ve filed in Cologne and--I’m forgetting the other site.

Okay, as you know, we hold patent positions in various aspects of Neutrolin and our underlying technology in the United States, Europe and other territories. We are confident we have the freedom to operate and commercialize our product in the manner we are now doing, and we are in the midst of bringing a series of legal challenges to our rival in Europe and we expect that there will be rulings concerning our patent position and activities of the rival in due course. Beyond that, I really can’t say much more, but we are determined to press on these matters. The Unfair Competition Act is in the Cologne court system on November 19 - that’s in the Q we put out, and the European Patent Office hearing will be in Munich on November 25. So we should have--both of these are subject to appeal, as you know, but we should have at least a sense of where the wind is blowing, if you will.

If the courts--let’s say the European Patent Office should rule in our favor - I understand this is a hypothetical, but play along with me on this - certainly there is an appeal process for Terra Pharma. Would you all look at providing a bond and a mechanism to stop their manufacturing and sales of their product?

Well, we’d have to take that into consideration. As you know, there’s pluses and minuses, but yes, we would consider it.

Okay, that’s all the questions that I had at this time. Thanks.

Thanks Doug.

Thank you. Ladies and gentlemen, we have no further questions in queue at this time. I would like to turn the floor back over to management for closing comments.

Thank you everyone for dialing in today. I would just like to reiterate and summarize the quarter because this quarter has been a very important period to advance the company. As I mentioned, CorMedix is on the verge of initiating our first Phase III study in hemodialysis, the LOCKIT clinical study. Patient enrollment will be this month, interim analysis will be six months or 81 events. We continue to collaborate with regional marketing partners to further expand the availability of Neutrolin in patients in additional countries, including the Middle East where we’re seeing increased acceptance. We’ve recently presented two health economics abstracts that articulate the potential value of Neutrolin, and we are executing a publication plan to publish a third article in the critical care journal. We will continue to assert our intellectual property rights on the context of patent infringement and unfair competition law claims brought in Germany, and we continue to execute on our plan to reduce cost of goods. Thank you everyone for joining and have a good day.

Thank you. Ladies and gentlemen, this does conclude our teleconference for today. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.