Greetings and welcome to the CorMedix Inc. Third Quarter 2020 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, November 5, 2020. I would now like to turn the conference over to Dan Ferry, from LifeSci Advisors. Please go ahead.

Good afternoon and welcome to the CorMedix third quarter 2020 earnings conference call. Leading the call today is Khoso Baluch, Chief Executive Officer of CorMedix. He is joined by Dr. Phoebe Mounts, Executive Vice President and General Counsel; and Dr. Matt David, Executive Vice President and Chief Financial Officer. 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 and marketing approval for DEFENCATH in the U.S. and other product candidates; future financial position; future revenues and projected costs; and potential market acceptance of DEFENCATH, Neutrolin and other product candidates. More specifically, forward-looking statements include any statements about our clinical development plans and the timing, cost, results and interpretations thereof; and projections as to the company’s future capital raising and spending and cash position; expectations as to the timing and nature of anticipated regulatory actions; possible product licensing, business development or other transactions; any commercial plans and expectations; market projections for our product candidates; and expectations as to 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. On today’s earnings call, we will discuss several topics with you on the overall progress CorMedix is making in bringing DEFENCATH to the U.S. market for its first indication for use as a catheter lock solution for hemodialysis patients to prevent catheter-related bloodstream infections with subsequent expansion into other indications. Joining me on this call are Phoebe and Matt. The 4 topics I will cover are regulatory, our Board of Directors update, commercial planning and our annual meeting logistics. So let me begin with the first point, which is regulatory. As we disclosed on August 31, 2020, the submission to the FDA of the new drug application, or NDA, for DEFENCATH which was completed in June has been accepted for filing. In addition, the FDA granted priority review and set a Prescription Drug User Fee Act, PDUFA, date of February 28, 2021. We are delighted to have a review period that is shorter than the 10-month standard review and appreciate the hard work of the CorMedix team to achieve this accomplishment. As mentioned in our August 31, 2020, press release, the FDA also noted that it is planning to hold an advisory committee meeting to discuss the application and that it had not identified any potential review issues at that time. During this call, Phoebe will provide you an update on the advisory committee. The second item that I would like to update you on is the changes at the Board level. As you saw in our press release of September 17, Paulo Costa joined the CorMedix Board. Paulo is a tremendous addition to our Board, given his decades of leadership experience in the pharmaceutical sector and significant strategic experience gained in part during his time spent as Chairman of Amylin Pharmaceuticals through its successful sale to BMS and AstraZeneca. Paulo’s leadership experience, include his time as President and CEO of Novartis U.S. Corporation from 2005 to 2008 and President and CEO of Novartis Pharmaceutical U.S. from 1999 to 2005. Prior to joining Novartis, Paulo spent 30 years at Johnson & Johnson, including as President of its pharmaceutical business. We also announced on November 2 that Mehmood Khan, who has been a Board member for the last 3 years, has stepped down due to policies related in his new role and responsibilities within an investment organization. While I’m disappointed that Mehmood had to step down, I very much appreciated the insight and advice Mehmood had provided over the years. I wish Mehmood continued success and thank him both personally and on behalf of CorMedix. Replacing Mehmood is another pharmaceutical industry veteran, Greg Duncan, who bring decades of senior executive commercial experience across a range of medicines as well as strategic leadership experience. Greg has spent the majority of his career in senior leadership roles in commercial-stage pharmaceutical companies, including having served as President of UCB’s North American business. In addition to acting on the executive committee and guiding the strategic direction for the company’s specialty biopharma business, Greg was responsible for managing a multibillion-dollar global business and overseeing the launch of multiple new products. Prior to his roles with UCB, Greg spent approximately 18 years at Pfizer where he gained significant experience across sales and marketing functions, including serving as Senior Vice President of U.S. Marketing and later as President of Pfizer’s Latin American business. The addition of Paulo and Greg to our CorMedix Board further augments the expertise in commercial and corporate strategy at the Board level and will be invaluable to CorMedix as we plan our progression into a commercial-stage company over the year ahead. On the third item, during the last quarter, the CorMedix team has continued to prepare for DEFENCATH’s anticipated commercial launch and continue to have discussions with many key players in the dialysis space, including the dialysis organizations and CMS. The interactions have been positive and clearly positions CorMedix to ensure that once DEFENCATH is approved by the FDA, it will be in the best possible position to successfully launch in the U.S. market. And finally, on the fourth topic, I’d like to highlight that our upcoming annual meeting is scheduled for December 16. Due to the ongoing pandemic, we are planning to hold it virtually. The agenda will include directors’ reelection and reconfirmation of our auditors. With that, now let’s move on to the first topic: regulatory update. Phoebe?

Thank you, Khoso. I am happy to report that FDA’s review of the DEFENCATH new drug application is continuing expeditiously due to the engagement of FDA’s review team and the tremendous effort of the CorMedix team. As noted by Khoso, we are very grateful for the dedication and ongoing efforts of the CorMedix team to bring DEFENCATH to the U.S. market and address the unmet medical need of reducing catheter-related bloodstream infections. As I have stated on a previous earnings call, it is important to remember that the goal for completing the priority review by the PDUFA date is truly a goal and can be shorter or longer than the February 28, 2021, PDUFA date for the priority review. As noted by Khoso, FDA intends to consult an advisory committee during the review of the DEFENCATH NDA. FDA has now tentatively scheduled the meeting of the Antimicrobial Drugs Advisory Committee for January 14, 2021, to discuss the DEFENCATH NDA. When FDA accepted the submitted DEFENCATH NDA for filing, it informed CorMedix that it intended to consult to advisory committee and that it had not identified any review issues at that time. During review of initial product approvals, supplemental indications or safety actions, FDA can rely on a panel of independent external experts to respond to specific FDA questions. The decision to involve an advisory committee is usually at the discretion of the division director and is intended to help FDA make appropriate scientific decisions. FDA reviewers complete the review of a new drug application and identify questions for the advisory committee. However, as the name implies, it is an advisory committee, and FDA may or may not follow the advisory committee’s recommendations. Because of the ongoing coronavirus pandemic, this meeting will not be face to face but rather will be conducted using FDA’s online teleconferencing platform, which is currently in use for advisory committee meetings. Because of the COVID-19 pandemic, FDA has been employing video conferencing for advisory committees, and we have been discussing the parameters of the meeting with the staff at FDA who are responsible for conducting advisory committee meetings. Information for this meeting has not yet been made publicly available by FDA. An announcement by FDA will be made in a Federal Register Notice and will be available on FDA’s website. No information on questions to be posed to the advisory committee is available now and will be publicly available within a few days before the meeting. These meetings are open to the public, and information on connecting to the meeting will also be posted by FDA on its website, which is www.fda.gov. We of course have begun preparing briefing materials that will be provided in advance to the advisory committee. FDA will similarly prepare a briefing package for the advisory committee. Briefing materials from both CorMedix and FDA will be posted on FDA’s website before the meeting. We have also begun preparing individuals who will be presenters at the meeting and will be responders to questions. The advisory committee meeting is a critical part of the FDA approval process for new drugs and will be an important focus of the CorMedix regulatory team going forward. With that update, let me pass the floor to Matt to cover financial results and our recent financing activities. Matt?

Thanks, Phoebe. I am pleased to be here today to provide an overview of our third quarter financial results as well as an update on recent financing activity. The company has just filed its report on Form 10-Q for the third quarter and 9 months ended September 30, 2020. I urge you to read the information contained in the report for a more complete discussion of our financial results. With respect to our third quarter 2020 financial results, our net loss was approximately $6.6 million or $0.22 per share compared with a loss of $5.3 million or $0.22 per share in the third quarter of 2019, excluding the impact of onetime items in 3Q ‘19. The higher net loss recognized in 2020 compared with 2019 was due to increased expenses related to our preparations for DEFENCATH’s commercial launch. We recorded increases in both SG&A as well as R&D expenses. Operating expenses in the third quarter of 2020 increased approximately 28% to $6.6 million compared with $5.2 million in the third quarter of ‘19. R&D expense increased by approximately 16% to $2.9 million driven primarily by additional staffing costs and an increase in costs related to the purchase of raw materials and manufacturing of DEFENCATH for commercial launch. SG&A expense increased approximately 40% to $3.7 million compared with $2.6 million in the third quarter of 2019. This increase was driven by increased costs related to market research in preparation for the potential approval of DEFENCATH and higher staffing costs due to additional hires. We recorded net cash used in operations during the third quarter of 2020 of $7.3 million, primarily driven by increases in operating expenses due to R&D expenses related to the cost of manufacturing DEFENCATH prior to its potential approval and SG&A expenses related to market research in preparation for the potential approval. This compares with net cash used in operations of $4 million we recorded in the third quarter of 2019. We reported $37 million in cash and short-term investments at September 30. In addition, we have generated net proceeds of approximately $4.6 million through selling shares via our ATM program following the quarter close. Pro forma cash, including cash on the balance sheet at September 30, 2020, and net proceeds from the recent ATM issuance, is approximately $41.8 million and roughly $2.1 million less than the pro forma cash described during our 2Q earnings call. We believe we have the funds necessary to continue our operations beyond the coming 12 months. On our second quarter earnings call, we highlighted that a key goal of the company was to continue to broaden our recognition and awareness among the financial community. We are pleased to be able to share that two banks, Truist, previously called SunTrust and JMP Securities, initiated research coverage of CorMedix during this quarter. Given their fundamental analysis of the company and their dialogue with the institutional investor community, we note that these activities should continue to help attract investors to follow the DEFENCATH story. Today, CorMedix has also followed a refreshed universal shelf, which, once declared effective, will give the company significant flexibility in the types of capital raising that we can explore over the coming years. As you may be aware, CorMedix used most of the remaining 2018 shelf in completing our July 2020 equity offering. So we believe, as with many of our peers, that having a shelf on file is good corporate housekeeping. While we have described that the company has sufficient resources to extend it into the fourth quarter of 2021, we also must ensure that the company is appropriately capitalized to allow us to ensure a robust commercial launch of DEFENCATH upon regulatory approval. With that, I would like to pass the floor back to Khoso.

Thank you, Matt. As I’ve stated, our goal is to maximize shareholders’ value. Because hemodialysis is a very concentrated payer provider market, we continue our preparation to commercialize DEFENCATH in the U.S., whether on our own or with a commercial partner or other party if a favorable transaction is available. All options are on the table and will be evaluated with maximizing shareholders’ value in mind. We are now focusing a great deal of our energy on engaging specifically with the various stakeholders within the dialysis market and continuing our discussions with the dialysis providers and with payers, including CMS. This would provide CorMedix with a strong foundation required for an efficient and successful launch. Once again, let me remind you that this significant market represents a very large unmet medical need. As today, there is no pharmacological agent approved in the U.S. for the prevention of CRBSI in central venous catheters. I believe that should DEFENCATH be approved by the FDA, it can rapidly become the standard of care in the U.S. So let me summarize the key takeaways from this call. What Phoebe and Matt covered with you hopefully provides you with insight into the effort on which we are focused and that has been accomplished over the last couple of months. I am pleased about the progress we are making despite challenges imposed by the coronavirus pandemic. I’d like to reemphasize. I am delighted that the NDA has been accepted for filing and ongoing priority review. We eagerly look forward to the FDA’s advisory committee meeting on January 14. We’re also pleased with the addition to the CorMedix Board. The new members bring experience and insight as CorMedix evolves into a commercial-stage company in the U.S. And finally, our outreach efforts continue and are focused on the payer contracting side for CorMedix, and these efforts clearly prepare us to launch DEFENCATH into the hemodialysis market in the U.S. upon FDA approval. A reminder that while we are initially focused on hemodialysis market, we are determined to seek additional indications for DEFENCATH use in catheters for oncology and TPN patients. We’ve had previous discussions with the FDA on clinical trial designs for use as a catheter lock solution in oncology and TPN patients and are working to develop the protocols with the goal of finalizing the regulatory pathway for reducing catheter-related bloodstream infections in these additional patient groups and executing on these plans on a post-approval basis. In conclusion, updates going forward will be around the following key events: the FDA advisory committee, the anticipated NDA approval by the FDA, DEFENCATH launch and successful TDAPA approval. I look forward to providing you with material development updates via CorMedix website, press release and conference call. I’d also like to note that as of November 16, the physical address for CorMedix will be CorMedix Inc., 300 Connell Avenue – Connell Drive, Suite 4200, Berkeley Heights, New Jersey, Zip Code 07922. Thank you for your continued support of CorMedix. With this, let me pass the floor over to the operator. Grant?

Thank you. [Operator Instructions] First question comes from the line Jason Butler with JMP Securities. Please proceed with your questions.

Hi, thanks for taking my questions. The first one just on the regulatory review, you said – so obviously, DEFENCATH would be the first CLS product be approved with anti-infectives efficacy. Could you maybe just comment in that context what you might expect an AdCom – the upcoming AdCom to focus on? And then secondly, Khoso, you mentioned willingness to explore potential commercial partnerships or strategic alliances. Can you maybe give us some more color on what you would be looking for in that kind of relationship? Thanks.

Thank you, Jason. For the first question, I’ll ask Phoebe if you can respond.

Certainly. Thank you for the question, Jason. As I said in my comments, we don’t have any insight at this time on specific questions that FDA will be posing. That comes much later in the process as the review team works through the NDA. The process is very much ongoing at this time. Most of the questions, as you know from looking at previous advisory committee meetings, focused on the clinical data and determining whether or not that provides substantial evidence of safety and effectiveness for product approval. I would note that this is a first-in-class product. This is the first time taurolidine will have been approved by FDA as a new drug. So it’s not uncommon for first-in-class products to go before an advisory committee.

Thanks, Phoebe. And to your second part of your question, Jason, we’ve articulated in the past that we look to prioritize the creation of long-term value for our shareholders. To this effect, we will continue to explore all options in order to maximize the commercial value of DEFENCATH once approved. Remember that hemodialysis is a pretty concentrated market and, therefore, can certainly be covered by a modest size commercial footprint for a successful launch. And hence, we have stated that all options are on the table, and we will consider whatever ideas partners bring forward to us. But they will carefully be considered and shared with the Board.

Okay, great. Congrats on all the progress and thanks again for taking the questions.

Thank you, Jason.

And the next question is from the line of Joon Lee with Truist Securities. Please proceed with your question.

Yes. Hi, this is actually Les on for Joon. Congrats on the quarter and the acceptance of the NDA. So first, you had two additions to the Board. Can you comment on expectations for additional hires ahead of the launch? And also, can you provide some more details on the steps you have taken thus far in preparing for commercial launch, assuming approval? And I have a follow-up.

Okay. So I don’t need to go over the addition 2 Board members that we’ve added. Clearly, that brings both commercial and strategic leadership experience and capabilities to the Board in the pharmaceutical space. In terms of hires, we have added a couple of individuals over the last quarter, specifically in medical affairs and supply chain that were critically needed. The preparations we have focused so far today has been in the payer space and medical affairs. And we have the leaderships in place for both those parts of the organization. And we have done quite a bit of work in the payer space, specifically to ensure that we are able to take the necessary steps that are required when we get approval for DEFENCATH in the U.S. market.

Thank you. That’s helpful. And then lastly, how are you thinking about pricing of DEFENCATH? And when can we expect to learn more about the pharmacokinetic data? Thank you.

Okay. So let me talk about the pricing. Our team has been pretty much focused in doing the work required on the payer side of the market. So we have spent time understanding and doing work and research, understanding the clinical and economic value of DEFENCATH, both to the patients and the health care system, health economics publication data and evaluating the optimal reimbursement scenarios across the portfolio. We will – we have not finalized yet on a price, and we will do that closer to approval and launch. The second part of your question was about the pharmacodynamics data, Joon?

Yes.

Phoebe, could you take that question?

I think he meant the pharmacoeconomic data.

Pharmacoeconomic data, like I said, we are working on putting that together right now, the pharmacoeconomic data.

Okay. That’s very helpful. Thank you.

Thank you.

And the next question comes from the line of Andrew D’Silva with B. Riley. Please proceed with your question.

Hi, good afternoon. This is [indiscernible] on for Andy. Thanks for taking the question. So as it relates to obtaining TDAPA designation, it looks like only very limited success has taken place to date, primarily with Amgen. Can you run us through the gives and takes on obtaining the designation? Does DEFENCATH being a catheter lock solution matter as we think about TDAPA’s text and notes, new injectable or intravenous drugs, what will be considered for the designation?

Yes. So number one, and thanks for your question. Number one is that the TDAPA program is relatively new. Amgen applied and got 2 of their products on to the TDAPA reimbursement program. We’ve had meetings with CMS. We’ve introduced the company. We’ve introduced DEFENCATH. And our perspectives regarding TDAPA eligibility, CMS has been very clear. The TDAPA eligibility criteria are well posted on their website. And we are working very diligently to make DEFENCATH meet these listed criteria. The determination from CMS will help drive utilization within the dialysis organization and capturing of the data both from a clinical and economic perspective. And our view is that we are eligible for TDAPA coverage. And clearly, we bring and fill a huge unmet medical need, and the pharmacoeconomics data we have will clearly show that to CMS.

Got it. That’s helpful. And I realize that you don’t want to talk about pricing until everything is finalized. But is it possible to comment on how you might think about in terms of the high and low for a potential price in terms of bundling with TDAPA or low without the designation?

Yes. So we are not giving any guidance on that at the moment, suffice to say that we are focused on a value-based pricing strategy so clearly looking at the benefits to the patient and to the healthcare system. Clearly, TDAPA designation will help us significantly and is going to be very important for us. So the focus on getting the health economics model and being able to share that with CMS is going to be a key part of our strategy as we go forward. And clearly, the pricing then will come pretty close to approval and launch.

Great that’s helpful. Thank you. That’s all for me.

And the next question comes from the line of Raghuram Selvaraju with H.C. Wainwright. Please proceed with your question.

This is [indiscernible] on for Ram. I had a few questions about your other assets. I was wondering how the preclinical testing for CMDX-001 is going for your rare pediatric cancer indication.

Hello, Ram? I did not hear.

This is [indiscernible] on for Ram. I was wondering how the preclinical testing for CMDX-001 is going in terms of rare pediatric cancers.

Okay. Thanks for your question. Phoebe, would you like to cover that?

Certainly. We continue our laboratory studies. We are working on various animal models where human tumor cells are propagated in generally immunodeficient mice and then the activity of the compound can be tested. So we are making progress on the animal models, but it’s all preclinical activity at this time.

Okay, thanks for the update. And perhaps, Phoebe, you could answer this one, too. Have you had initial dialogue with the FDA regarding the accelerated 510(k) device pathway for your medical device opportunities?

We have had conversations with the Center for Devices and Radiological Health on applications of taurolidine in medical devices. But our focus for the past several years has been on facilitating approval for hemodialysis as a catheter lock solution.

Okay. And one final one about your nanoparticle formulations for the taurolidine hydrogels, how is this asset progressing? And I was wondering if you perhaps explored other funding sources such as from the Department of Defense?

As you probably know, based on your questions, we have patent applications around those potential product development areas. But as I said a few minutes ago, our effort has been on really securing approval as a new drug to address the unmet medical need for hemodialysis patients.

Okay, thanks very much for the color. That’s all for me.

And I would now like to turn the conference over to Dan Ferry for some written questions.

Thank you, operator. I had one for Phoebe here. Phoebe, why don’t you refer to DEFENCATH as an antibiotic?

Thank you, Dan. That’s a good question, and I think that’s not an uncommon question for us. Taurolidine, which is the novel antimicrobial component of DEFENCATH, has been shown in laboratory studies to kill both bacteria and fungi. As you probably know, the term antibiotic has come to mean a drug that treats bacterial infections. DEFENCATH is not a treatment but rather as a catheter lock solution, it’s being developed to prevent catheter-related bloodstream infections by killing bacteria as well as fungi that could grow in the catheter and cause the bloodstream infection. So it is properly considered an antimicrobial, or you could refer to it as an antibacterial and antifungal. But given the commonly used meaning of antibiotics, antibiotic would not be appropriate.

Okay. Thank you, Phoebe. I have an additional question for Matt David. Matt, I see that you had initiation of coverage from both SunTrust/Truist and JMP. What is the value of this coverage?

Sure. Thanks, Dan, for the question from the audience. Yes, we were pleased to see the initiation, as I mentioned, of coverage by both Truist and JMP Securities in September and, of course, thank them for joining us on this call as well. These analysts have done fundamental analysis on the DEFENCATH opportunity and market potential and have also conveyed their thoughts on the commercial round. In addition, these firms, plus our other covering analysts, have extensive dialogue with health-care-focused institutional investors, and we expect that their support will help to continue to broaden interest and awareness of CorMedix across the investor community.

Thank you, Matt. I have no further questions. I’d like to pass the call back over to Khoso Baluch for closing remarks. Khoso?

Thank you, Dan. So just I wanted to close by saying CorMedix has an experienced team of executives who have taken the pharmaceuticals through the various phases of clinical study, registration and successfully launched products in the U.S. market. CorMedix remains committed to bringing DEFENCATH to the U.S. market, whether on our own or with a strategic or commercial partner to help patients in need of protection from life-threatening infection. The importance of preventing infections and keeping patients out of hospitals is even more apparent during the ongoing coronavirus pandemic. With that, I would like to thank you all for your attention and have a good evening.

And that does conclude today’s conference. We thank you for your participation and ask that you please disconnect your line.