CRMD 10-K & 10-Q changes, risk factors and insider trading
CorMedix Inc. · Nasdaq · Pharmaceutical Preparations · CIK 1410098 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our revenue and profitability may be adversely affected by DefenCath’s transition from TDAPA to the post-TDAPA add-on adjustment and broader reimbursement dynamics that could have a material adverse impact on our results of operations and business.”
New heading “Infective pathogens might develop resistance to our Products or product candidates, which would decrease the efficacy and commercial viability of that product.”
New heading “Clinical trials and regulatory approval for our product lines are expensive, time-consuming, and uncertain, and failure or delay in obtaining approval could materially harm our business.”
New heading “Off-label marketing or use of our Products or future product candidates may expose us to significant fines, penalties, sanctions, or product liability claims, and our reputation could be harmed.”
New heading “Changes in funding for the FDA and other government agencies or future government shutdowns or disruptions could cause delays in the submission and regulatory review of our product lines, which could negatively impact our business or prospects.”
New heading “Our BARDA development contract requires ongoing funding decisions by the U.S. Government. Any reduction or discontinuation of funding of this contract could cause our business, financial condition, operating results and cash flows to suffer materially.”
New heading “We have pursued and may continue to pursue acquisitions. Acquisitions could be difficult to integrate, divert the attention of key personnel, disrupt our business, dilute stockholder value and impair our financial results.”
New heading “Competition and technological change may make our Products, product lines or indications, less attractive or obsolete.”
New heading “If we lose key management, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in compensation costs, our business may materially suffer.”
New heading “Our business, financial condition, and results of operations could be materially and adversely affected by an adverse outcome in the ongoing litigation.”
New heading “Our ability to pursue the development and commercialization of certain of our Products depends upon the continuation of certain licenses and actions taken by our licensors.”
New heading “The timing of the milestone and royalty payments we are required to make to third parties is uncertain and could adversely affect our cash flows and results of operations.”
New heading “General Risk Factors”
New heading “Our business may be adversely affected by tariffs, trade sanctions or similar government actions.”
New heading “We have identified a material weakness in our internal control over financial reporting, which could, if not effectively remediated, result in material misstatements in our financial statements, and a failure to meet our reporting and financial obligations.”
Removed heading “We may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Any additional funds that we obtain may not be on terms favorable to us or our stockholders, may dilute our stockholders, and may require us to relinquish valuable rights.”
Removed heading “Final approval by regulatory authorities of our product lines for commercial use may be delayed, limited or denied, any of which could adversely affect our ability to generate operating revenues.”
Removed heading “Current healthcare laws and regulations in the U.S. and future legislative or regulatory reforms to the U.S. healthcare system may affect our ability to commercialize DefenCath and future marketed products profitably.”
Removed heading “Changes in funding for the FDA and other government agencies or future government shutdowns or disruptions could cause delays in the submission and regulatory review of marketing applications, including supplements, which could negatively impact our business or prospects.”
Removed heading “Healthcare institutions, physicians and patients may not accept and use our products.”
Removed heading “Competition and technological change may make DefenCath, as well as our other product lines or indications, less attractive or obsolete.”
Removed heading “If we lose key management or scientific personnel, cannot recruit qualified employees, directors, officers, or other personnel or experience increases in compensation costs, our business may materially suffer.”
Removed heading “If we are unable to effectively recruit, train, retain and equip our sales force, our ability to continue successfully commercialize DefenCath will be harmed.”
Removed heading “We may be exposed to liability claims associated with the use of hazardous materials and chemicals.”
Removed heading “Our executive officers and directors may exercise stock options and sell shares of their stock, and these events could adversely affect our stock price.”
Removed heading “A significant number of additional shares of our common stock may be issued at a later date, and their sale could depress the market price of our common stock.”
Removed heading “We are a “smaller reporting company” and we cannot be certain if the reduced reporting requirements applicable to such companies could make our common stock less attractive to investors.”
Largest changes
“If we or our third-party service providers are unable to properly protect the privacy and security of personal information, or other confidential data we process in our business, we could be found to have breached our contracts. Further, if we fail to comply with applicable privacy laws, we could face civil and criminal penalties. Enforcement activity by regulatory authorities in relation to privacy and cybersecurity matters can result in financial liability and reputational harm, and responses to such enforcement activity can consume significant internal resources. …”see in full comparison
“Off-label marketing or use of our Products or future product candidates may expose us to significant fines, penalties, sanctions, or product liability claims, and our reputation could be harmed.”see in full comparison
“We are regularly involved in pending and threatened litigation, investigations, and other legal proceedings, including intellectual property, commercial, employment, securities, regulatory, and product-related claims. Litigation is inherently uncertain, can be costly and time-consuming, may divert management attention, and could result in injunctions, damages, settlements, fines, penalties, or other remedies. Insurance coverage may be unavailable or insufficient to cover losses. …”see in full comparison
“The FDA, United States Department of Justice (the “DOJ”), and comparable foreign authorities strictly regulate the marketing and promotional claims that are made about pharmaceutical products following approval. In particular, a product may not be promoted for uses or indications that are not approved by the FDA or comparable foreign authorities as reflected in the product’s approved labeling and Summary of Product Characteristics. …”see in full comparison
“Our business may be adversely affected by tariffs, trade sanctions or similar government actions.”see in full comparison
“We have identified a material weakness in our internal control over financial reporting, which could, if not effectively remediated, result in material misstatements in our financial statements, and a failure to meet our reporting and financial obligations.”see in full comparison
Full comparison: every changed paragraph (143)
Risks Related to Our Financial Position and Need for Additional
Capital
WeAlthough we achieved profitability in 2025,
we have a history of operating losses,
may incur additional operating losses in the futurefuture, and may never achieve sustained profitability.
Our prospects must be considered
in light of the uncertainties, risks,
expenses and difficulties frequently encountered by companies in the early stages of operation. We achieved net income of approximately
We$163.1 million for the year ended December 31, 2025 and incurred a net lossesloss of approximately $17.9 million and $46.3 million for the yearsyear ended December
31, 20242024. and 2023, respectively.
As of December 31, 2024,2025, we had an accumulated deficit of approximately $339.6$176.6 million. We may not be able to sustain profitability
and could incur net operating losses in future periods as we expect to incur substantial additional operating
expenses over the next several
years as our research, development, pre-clinical testing, clinical trialtrials and commercialization activities
increase as we commercialize
our DefenCathProducts and develop our other product lines. As a result, we may experience negative cash flow at times
as we fund our operating
expenses and capital expenditures. Our ability to generate revenue and maintain profitability will depend on,
among other things, the
following: continuing to successfully continued marketingmarket and sellingsell DefenCathour Products in the U.S.; obtaining and/or maintaining reimbursement
for DefenCathour Products
in appropriate settings of care; obtaining necessary regulatory approvals for our other products from the FDA and, if sought, international
international regulatory agencies; establishing additional manufacturing, sales, and marketing arrangements, either alone or with third
parties; and
raising sufficient funds to finance our activities if we are unable to generate sufficient revenuerevenues from the commercialization
of DefenCathour Products in the U.S. are insufficient.
We might not succeed at any of these undertakings. If we are unsuccessful at some or all of these undertakings,
our business, prospects,
and results of operations may be materially adversely affected.
We may need to finance our future cash
needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Any additional
funds that we obtain may not be on terms favorable to us or our stockholders, may dilute our stockholders, and may require us to relinquish
valuable rights.
To date, our commercial operations
have not generated sufficient revenues to enable profitability on an annual basis. We estimate that we have sufficient cash to fund (i)
operations for at least twelve months from the date of issuance of this Annual Report on Form 10-K and (ii) the ongoing commercial marketing,
sale and promotion of DefenCath. These estimates are based upon the base case assumptions for market penetration, average selling price,
research and development (“R&D”) expense and commercial infrastructure cost.
We may need additional financing to the extent we are unable to generate
sufficient revenue from the commercialization of DefenCath in the U.S. We can provide no assurances that any financing or strategic relationships
will be available to us on acceptable terms, or at all. We expect to continue to use significant cash to fund our operations as we commercialize
DefenCath in the U.S, pursue development of our other product lines and other business development activities, and potentially incur additional
legal costs to defend our intellectual property.
To raise needed capital,
we may sell additional equity or debt securities, obtain a bank credit facility, or enter into a corporate collaboration or licensing
arrangement. The sale of additional debt securities, if convertible, could result in dilution to our stockholders. The incurrence of
indebtedness would result in fixed obligations and could also result in covenants that would restrict our operations. Raising additional
funds through collaboration or licensing arrangements with third parties may require us to relinquish valuable rights to our technologies,
future revenue streams, research programs or product lines, or to grant licenses on terms that may not be favorable to us or our stockholders.
To the extent we raise additional
capital by issuing equity securities, our stockholders may experience substantial dilution. We may, as we have in the past, sell common
stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time
to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be further
diluted by subsequent sales. New investors could gain rights superior to existing stockholders.
Risks Related to the Development and Commercialization of DefenCath
We are highly dependent on the continued
successful commercialization of our only approvedlead product, DefenCath.
Our ability to generate operating
revenuecash flow is dependent upon our continued successful commercialization of DefenCathDefenCath. inIn the U.S. DefenCath was approved by FDA on November
15, 2023, and is indicated to reduce the incidence of CRBSIs in adult patients with kidney failure receiving chronic hemodialysis through
a CVC. This drug is indicated for use in a limited and specific population of patients. We launched DefenCath commercially in April 2024
in the inpatient setting and in July 2024 in the outpatient hemodialysis setting. The safety and effectiveness of DefenCath have not
been established for use in populations other than adult patients with kidney failure receiving chronic hemodialysis through a CVC.
We have not commercialized
any product lines other than DefenCath. Continued successful commercialization
of DefenCath is subject to many risks, including but not
limited to:
Sales of pharmaceutical products
largely depend on the reimbursement
of patients’ medical expenses by government health care programs, such as Medicare, Medicaid
and/or private health insurers. Further,
significant uncertainty exists as to the reimbursement status of newly approved health care products.
We currently sell DefenCath directly
to hospitals and outpatient dialysis center operators, butand alsoare mayundergoing expandclinical itsstudies usageto intopursue
an oncologyexpanded anduse in total parenteral nutrition patients
requiring catheters if those indications can be secured from the FDA.catheters. For any new indication of use, all new potential customers
are healthcare
providers who depend upon reimbursement by government and commercial insurance payors for dialysis and other treatments.payors. Depending on
the treatment setting
of any new indication for use, we believe that DefenCath would be eligible for coverage under various reimbursement
programs, such as
the IPPS, including certain temporary payment adjustments (e.g., NTAP); however, payment under these payment systems
could later be modified
or decreased by future regulations. Further, CMS, which administers Medicare, and works with states to administer
Medicaid, has adopted and will continue to adopt and/or amend rules governing reimbursement for specific treatments. We anticipate that
insurers may increasingly demand that manufacturers demonstrate the cost effectiveness of their products as part of the reimbursement
review and approval process. Healthcare reform proposals and medical cost containment proposals designed to target rising healthcare costs
could be introduced in the U.S. Any measures affecting the reimbursement programs of governmental and private insurance payors, including
any uncertainty in the medical community regarding their nature and effect on reimbursement programs, could have an adverse effect on
purchasing decisions regarding DefenCath, as well as limit the price we may charge for DefenCath. The failure to obtain or maintain reimbursement
coverage for DefenCath or any other products could materially harm our operations.
Further, CMS, which administers Medicare and works with states to administer Medicaid, has adopted and will continue to adopt and/or amend rules governing reimbursement for specific treatments. We anticipate that insurers may increasingly demand that manufacturers demonstrate the cost effectiveness of their products as part of the reimbursement review and approval process. Healthcare reform proposals and medical cost containment proposals designed to target rising healthcare costs could be introduced in the U.S. Any measures affecting the reimbursement programs of governmental and private insurance payors, including any uncertainty in the medical community regarding their nature and effect on reimbursement programs, could have an adverse effect on purchasing decisions regarding DefenCath, as well as limit the price we may charge for DefenCath. The failure to obtain or maintain reimbursement coverage for DefenCath could materially harm our operations.
We have significant DefenCath customer
concentration, concentration,
with a limited number of customers accounting for a large portion of our revenues.
We derive a large portion
of our revenues from a few major customers.
Sales to oneour customertop three customers accounted for 86%79% of our total revenue for the year ended December
31, 2024,2025, and we had twothree customers
that accounted for 87%41%, 23% and 12%20% of our accounts receivable, respectively, for the year ended December
31, 2024.2025. These customers have
no purchase commitments and may cancel, change or delay purchases with little or no notice or penalty.
As a result of thesethis customer concentrations, concentration,
our revenue could fluctuate materially and could be materially and disproportionately impacted
by product pricing and purchasing decisions
of these customers or any other significant customer. These customers may decide to purchase less DefenCath from
us than management anticipates,
may alter purchasing patterns at any time with limited notice, or may decide not to continue to purchase
DefenCath at all, any of which
could cause our revenue to decline materially and materially harm our business, financial condition and results
of operations. If we are
unable to diversify and grow our customer base, we will continue to be susceptible to risks associated with
customer concentration.
Our revenue and profitability may be adversely affected by DefenCath’s transition from TDAPA to the post-TDAPA add-on adjustment and broader reimbursement dynamics that could have a material adverse impact on our results of operations and business.
While DefenCath has been approved for reimbursement in certain settings, we cannot be sure that reimbursement will continue to be available for DefenCath on favorable terms or will be covered by other payers. For example, on July 1, 2026, DefenCath’s TDAPA reimbursement will transition into a post-TDAPA add-on adjustment, the calculation of which is determined by CMS. As a result of the methodology utilized by CMS, the level of reimbursement provided to institutions treating dialysis patients will significantly decline, and as a result, we anticipate there will be a corresponding reduction to the net pricing for DefenCath for the third and fourth quarters of 2026. The 2027 post-TDAPA add-on adjustment will be effective on January 1, 2027. There can be no assurance that the level of reimbursement determined by CMS in the post-TDAPA add-on period will improve. Further changes in these reimbursement rates could lead to significant fluctuations in our operating income and could have a negative impact on our revenues, earnings and cash flows. Reimbursement uncertainty applies to all of our Products as well as other product lines that we develop. Also, we cannot be sure that the amount of reimbursement that is available will not reduce the demand for, or the price of, our Products. If reimbursement is not available by certain payors or is available only at limited levels, we may not be able to continue to successfully commercialize our Products or any other product lines that we develop.
Reimbursement levels are also subject to periodic CMS rulemaking, sequestration or other across-the-board Medicare payment reductions, audit and overpayment recovery activity, and evolving coverage policies, any of which could occur on short notice and may apply retroactively. If CMS changes the underlying methodologies, revises inputs or assumptions, or otherwise modifies TDAPA eligibility criteria or post-TDAPA add-on adjustments, our realized revenue, earnings and cash flows could fluctuate materially from period to period. Even if coverage remains in place, inadequate payment may limit provider adoption, restrict formulary placement, or result in purchasing constraints by dialysis organizations.
Successful development and commercialization of our Products and new product lines is uncertain.
OurThe development and commercialization
of our product,Products, and future product lines, is subject to the risks of failure and delay inherent in the development of new pharmaceutical
products,products for the Company, our licensor and our partners, including but not limited to the following:
Additionally, healthcare institutions, physicians and patients may not accept and use our Products. Acceptance and use of our Products will depend upon a number of factors including the following:
Because of these risks, our development efforts and those of our licensor and our partners may not result in any future commercially viable products.
Because of these risks, our
development efforts may not result in any future commercially viable products. If a significant portion of these
our development efforts
and those of our licensor and partners are not successfully completed, required regulatory approvals are not obtained
or any approved products are not commercialized successfully,
our business, financial condition, and results of operations could be materially
harmed.
Infective pathogens might develop resistance to our Products or product candidates, which would decrease the efficacy and commercial viability of that product.
Infective pathogens, including fungi and bacteria, develop resistance over time due to genetic mutation. Many current and previous anti-infective therapies have suffered reduced efficacy over time due to the development of resistance to such drugs. It is probable that, over time, such pathogens will also develop resistance to our Products and our drug candidates. If resistance were to develop rapidly to our Products or our drug candidates, this would reduce the commercial potential for our business.
Clinical trials and regulatory approval for our product lines are expensive, time-consuming, and uncertain, and failure or delay in obtaining approval could materially harm our business.
To market a new drug or device product in the United States, we must demonstrate proof of safety and effectiveness in humans through “adequate and well-controlled” clinical trials and obtain FDA approval. The clinical trial and regulatory approval process is lengthy, expensive, and subject to numerous risks and uncertainties at every stage.
Clinical trials may be delayed or fail due to many factors, including: inability to manufacture sufficient quantities of qualified materials under cGMP requirements; slower than expected patient recruitment or insufficient enrollment; modifications to trial protocols or changes in regulatory requirements; lack of effectiveness or unforeseen safety issues; suspension or termination by institutional review boards or the FDA; and adverse medical events in patients, which may or may not be related to our products. Results from early trials are not necessarily indicative of later trial outcomes, and clinical results are frequently susceptible to varying interpretations that may delay, limit, or prevent regulatory approvals.
Even after clinical trials are completed, final FDA approval of an NDA, Premarket Approval Application (“PMA”), or De Novo application may be delayed, limited, or denied for numerous reasons, including: the FDA may not find pre-clinical and clinical data sufficient or may disagree with our interpretation of such data; the FDA may require additional studies or manufacturing information; the FDA may not agree with our intended indications, study design, or proposed labeling; or manufacturing processes and facilities may be deemed to have insufficient GMP controls. Regulatory approval policies may also change, and compliance with evolving requirements may consume substantial financial and management resources.
Any failure or significant delay in clinical trials or regulatory approval for our products would delay our ability to commercialize our product lines and generate product revenues, and could cause us to abandon a product line entirely. Such outcomes could materially harm our business, financial condition, and results of operations.
Off-label marketing or use of our Products or future product candidates may expose us to significant fines, penalties, sanctions, or product liability claims, and our reputation could be harmed.
The FDA, United States Department of Justice (the “DOJ”), and comparable foreign authorities strictly regulate the marketing and promotional claims that are made about pharmaceutical products following approval. In particular, a product may not be promoted for uses or indications that are not approved by the FDA or comparable foreign authorities as reflected in the product’s approved labeling and Summary of Product Characteristics. However, physicians can prescribe drugs to their patients in a manner that is inconsistent with the approved label based on the physician’s independent medical judgement. The FDA and other governmental authorities, have also required that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed in order to resolve enforcement actions. If we become the target of such an investigation or prosecution based on our marketing and promotional practices, we could face large civil and criminal fines and be subject to prohibitions and restrictions, which would materially harm our business. In addition, management’s attention could be diverted from our business operations, significant legal expenses could be incurred, and our reputation could be damaged.
Final approval by regulatory authorities
of our product lines for commercial use may be delayed, limited or denied, any of which could adversely affect our ability to generate
operating revenues.
The clinical development,
manufacturing, labeling, packaging, storage, recordkeeping, export, marketing, promotion and distribution, and other possible activities
relating to our product lines are subject to extensive regulation by the FDA and other regulatory agencies. Failure to comply with applicable
regulatory requirements may, either before or after product approval, subject us to administrative or judicially imposed sanctions that
may negatively impact the approval of one or more of our product lines or otherwise negatively impact our business. Compliance with such
regulations may consume substantial financial and management resources and expose us and our collaborators to the potential for other
adverse circumstances which could delay or prevent us from generating revenue from the commercialization of these drugs and cause us
to incur significant additional costs.
We are not permitted to market
a product line in the United States until the particular product line is approved for marketing by the FDA. Specific pre-clinical data,
chemistry, manufacturing and controls data, a proposed clinical trial protocol and other information must be submitted to the FDA as
part of an investigational new drug (“IND”) application, and clinical trials may commence only after the IND application
becomes effective. To market a new drug in the United States, we must submit to the FDA and obtain FDA approval of an NDA. An NDA must
be supported by extensive clinical and pre-clinical data, as well as extensive information regarding chemistry, manufacturing and controls,
to demonstrate the safety and effectiveness of the product line, and the FDA will also assess whether the manufacturing processes and
facilities are suitable to support the application. Approval of an NDA may be delayed due to delays in FDA’s review of the manufacturing
facility, which may require an onsite inspection.
Obtaining approval of an
NDA can be a lengthy, expensive and uncertain process. Review time can be impacted by the quality of the information included in the
application, FDA’s internal resources such as the availability of reviewers, or requests from the FDA for additional information.
Regulatory approval of an NDA is not guaranteed. The number and types of pre-clinical studies and clinical trials that will be required
for FDA approval varies depending on the product line, the disease or condition that the product line is designed to target and the regulations
applicable to any particular product line. Despite the time and expense exerted in pre-clinical and clinical studies, failure can occur
at any stage, and we could encounter problems that delay our product line development or that cause us to abandon clinical trials or
to repeat or perform additional pre-clinical studies and clinical trials. The FDA can delay, limit or deny approval of a product line
for many reasons, and product line development programs may be delayed or may not be successful for many reasons including but not limited
to, the following:
Our pre-clinical and clinical
data, other information and procedures relating to a product line may not be sufficient to support approval by the FDA or any other U.S.
or foreign regulatory authority, or regulatory interpretation of these data and procedures may be unfavorable. Failure to conduct required
post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug from the market on an expedited basis.
Our business and reputation may be harmed by any failure or significant delay in receiving regulatory approval for the sale of any drugs
resulting from our product lines. As a result, we cannot predict when or whether regulatory approval will be obtained for any drug we
develop.
Additionally, other factors
may serve to delay, limit or prevent the final approval by regulatory authorities of our product lines for commercial use, including,
but not limited to:
The successful development
of any product lines is uncertain and, accordingly, we may never commercialize any of these product lines or generate significant revenue.
Risks Related to HealthcareRegulatory Regulatory
and Legal Compliance
Matters
Our approved product,Products DefenCath, is,are, and
our other pipeline
product lines (if approved) will be, subject to extensive post-approval regulation.
Once a product is approved,
numerous FDA-mandated post-approval requirements
apply in the United States. These include, among other things, requirements related to pharmacovigilance
and adverse event and other reporting,
supply chain security requirements, suspect and illegitimate product investigations and notifications,
limitations on product advertising
and promotion and on the distribution of product samples, required post-marketing studies, and ongoing
adherence to cGMPs, as well as
the need to submit appropriate new or supplemental applications and obtain FDA approval for certain changes
to the approved product, product
labeling, or manufacturing process. Establishing and maintaining systems and procedures for compliance
with these requirements, and for training
and monitoring personnel relative to their compliance, is expensive, time consuming, and an
ongoing effort. Depending on the circumstances,
failure to meet post-approval requirements can result in criminal prosecution, fines,
injunctions, recall or seizure of products, total
or partial suspension of production, denial or withdrawal of pre-marketing product
approvals, or refusal to allow us to enter into supply
contracts, including government contracts. In addition, even if we comply with
FDA, foreign and other requirements, new information regarding
the safety or effectiveness of a product could lead the FDA or aother foreign
relevant regulatory body to modify or withdraw product approval. Failure
to complete a PREA post-marketing study can result in a PREA non-compliance
letter, which is publicly posted on FDA’s website, and
could result in the product being considered misbranded and subject to additional
enforcement. enforcement actions.
Current healthcare laws and regulations
in the U.S. and future legislative or regulatory reforms to the U.S. healthcare system may affect our ability to commercialize DefenCath
and future marketed products profitably.
Federal and state governments
in the U.S. are considering legislative and regulatory proposals to change the U.S. healthcare system in ways that could affect our ability
to commercialize DefenCath and future marketed products profitably. Similarly, among payors and other third-parties, there is significant
interest in promoting such changes through legislation and regulation (in additional to through restrictions introduced via contracting
and other methods). The life sciences industry and specifically the market for the sale, insurance coverage and distribution of pharmaceuticals
has been a particular focus of these efforts and would likely be significantly affected by any major legislative or regulatory initiatives.
In addition, there have been, and may in the future be, initiatives at both the federal and state level that could significantly modify
the terms and scope of government-provided health insurance coverage, ranging from changes to some or all of the provisions of existing
law, to establishing a single-payer, national health insurance system, to more limited “buy-in” options to existing public
health insurance programs, any of which could have a significant impact on the healthcare industry. It is possible that additional legislative,
executive and judicial activities in the future could have a material adverse impact on our business, financial condition and results
of operations.
In the U.S. there has been,
and we expect there will continue to be, a number of legislative and regulatory changes to the health care system that could affect our
ability to profit from our approved products. Our future revenues, profitability
and access to capital will be affected by the continuing
efforts of governmental and private third-party payors to manage, contain or
reduce the costs of health care through various means, such
as capping prices, limiting price increases, reducing reimbursement, and
or requiring rebates. Market acceptance and sales of DefenCathour Products
or any other product lines that we develop, will depend on reimbursement
policies and may be affected by health care reform measures in
the U.S. and abroad. Government authorities and other third-party payors,
such as private health insurers, decide which drugs they will pay for and establish reimbursement levels. While DefenCath has been approved
for reimbursement in certain settings, we cannot be sure that reimbursement will be available for DefenCath by other payers. That uncertainty
applies for any other product lines that we develop. Also, we cannot be sure that the amount of reimbursement that is available will
not reduce the demand for, or the price of, our products. If reimbursement is not available by certain payors or is available only at
limited levels, we may not be able to continue to successfully commercialize DefenCath or any other product lines that we develop.
Federal and state governments in the U.S. have been, and may in the future consider legislative and regulatory proposals to change the U.S. healthcare system in ways that could affect our ability to commercialize our Products and future marketed products profitably. In addition, the U.S. government, state legislatures, and foreign governments have shown significant interest in implementing cost containment programs as it relates to prescription drugs, including price-controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs to limit the growth of government paid health care costs. For example, the current administration has pursued and is pursuing policies to reduce regulations and expenditures across government, including at the FDA, CMS, Health and Human Services (“HHS”) and related agencies. Recent actions include (i) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by establishing Most-Favored-Nation pricing for pharmaceutical products; (ii) imposing tariffs on imported pharmaceutical products; and (iii) as part of the MAHA Commission’s recent Strategy Report, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. These actions and policies may significantly reduce U.S. drug prices, potentially impacting pricing strategies and profitability, while increasing operational costs and compliance risks.
In the U.S. there has been,
and we expect there will continue to be, a number of legislative and regulatory changes to the health care system that could affect our
ability to profit from our approved products. The U.S. government and other
governments have shown significant interest in pursuing healthcare
reform. Any such government-adopted reform measures may adversely affect
the pricing of healthcare products and services in the U.S.
or internationally and the amount of reimbursement available from governmental agencies or other
third-party payors. Any such reduction in reimbursement could negatively affect the pricing of our Products. If we are not able to charge
a sufficient amount for our Products, then our margins and our profitability will be adversely affected.
Changes in funding for the FDA and other government agencies or future government shutdowns or disruptions could cause delays in the submission and regulatory review of our product lines, which could negatively impact our business or prospects.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel, accept submission, applications, and the payment of user fees, and statutory, regulatory, and policy changes. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. The impact of global events, including terrorism, natural disasters and pandemics, or other health emergencies, may also cause disruptions in the normal functioning of the FDA or other government agencies.
In recent years, the U.S.
Congress has sought to repeal and has significantly amended the Affordable Care Act. We expect that there will continue to be proposals
by legislators at both the federal and state levels, regulators and third-party payors to keep healthcare costs down while expanding
individual healthcare benefits. Certain of these changes could impose limitations on the prices we will be able to charge for any products
that are approved or the amounts of reimbursement available for these products from governmental agencies or other third-party payors
or may increase the tax requirements for life sciences companies such as ours. Any such changes could have an adverse effect on our business,
financial condition and results of operations.
There has been heightened
governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which have resulted in several recent
congressional inquiries and proposed and enacted bills by Congress and the states designed to, among other things, bring more transparency
to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement
methodologies for products. In addition, the U.S. government, state legislatures, and foreign governments have shown significant interest
in implementing cost containment programs, including price-controls, restrictions on reimbursement and requirements for substitution
of generic products for branded prescription drugs to limit the growth of government paid health care costs. For example, the U.S. government
has passed legislation requiring pharmaceutical manufacturers to provide rebates and discounts to certain entities and governmental payors
to participate in federal healthcare programs. The U.S. government enacted the Inflation Reduction Act of 2022 (Inflation Reduction Act
or IRA). The IRA brought sweeping changes to Medicare coverage and reimbursement for prescription drugs that could negatively impact
us and other pharmaceutical manufacturers. Of note, beginning January 1, 2025, the eliminates the Medicare Part D coverage gap, and reduces
a beneficiary’s out-of-pocket maximum to $2,000. The existing coverage gap discount program for pharmaceutical manufacturers will
be replaced by a new manufacturer discount program effective in 2025. Under the new program, manufacturers will provide a 10 percent
discount off the negotiated price for applicable drugs (branded drugs and biologics manufactured by companies that have Part D discount
agreements) after the deductible is satisfied through the catastrophic phase of the benefit. In the catastrophic phase, manufacturers
will provide a 20 percent discount off negotiated price.
Any reduction in reimbursement
rates under Medicare, Medicaid, or private insurers could negatively affect the pricing of our products. If we are not able to charge
a sufficient amount for our products, then our margins and our profitability will be adversely affected.
Risks relating to cybersecurity and data privacy could create additional liabilities for us.
We arerely subjecton tothe proper functioning
of information technology systems, networks, and cloud services across our operations, and any failure, interruption, or other incident
affecting the confidentiality, integrity or availability such systems or the data privacystored thereon, including incidents which may result
andfrom protectiona lawscyber-attack (e.g., ransomware, malware, phishing, denial-of-service, or vendor compromise), could disrupt our business, result
in loss or corruption of data, theft or misuse of confidential or personal information, and regulationsrequire thatsignificant applyremediation tocosts. the collection, transmission, storage and use of personally-identifying information.Failure
Failure to comply with applicable privacy and data security laws and regulations could result in enforcement actions against us, including possible
possible fines, imprisonment of company officials and public censure, claims for damages by affected individuals or class of individuals, or damage
to our reputation
and loss of goodwill, any of which could have a material adverse effect on our business, financial condition, results
of operations or
prospects.
We also depend on third-party service providers (including cloud, SaaS, Contract Research Organizations, CMOs, logistics and analytics vendors), and incidents at these third parties—or their subcontractors—can compromise our data or disrupt operations even if our own systems are not implicated. We maintain processes to assess, identify, and manage material cybersecurity risks, which are integrated into our broader enterprise risk management program, including with respect to incident response planning and employee training, and involve oversight of third-party risks. However, no controls can eliminate all threats, and our board and management oversee, but cannot guarantee the effectiveness of, these efforts. For more information, please see “Item 1C (Cybersecurity).” A significant cyber incident—or a series of smaller incidents—could also interrupt manufacturing and supply coordination with third parties, impair quality or safety reporting, delay clinical or commercial activities, increase insurance and cybersecurity costs, and negatively affect our results of operations and reputation.
The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide. Certain laws may be more stringent or broader in scope, or offer greater individual rights, with respect to personal information than federal, international or other state laws, and such laws may differ from each other, which increases costs and complicates compliance efforts.
The legislative and regulatory
landscape for privacy and data protection continues to evolve in jurisdictions worldwide. There are numerous U.S. federal and state laws
and regulations related to the privacy, data protection and security of personal information. At the federal level, regulations promulgated
pursuant to HIPAA establish privacy and security standards for “covered entities” (group health plans and most healthcare
providers) that limit the use and disclosure of individually identifiable health information those entities and their service providers
receive or create (“protected health information”). Although we generally are not subject to the HIPAA privacy or security
regulations, we do business with various entities (including clinical trial investigators) that are subject those regulations, and we
have to expend resources to understand their obligations, adjust contractual terms in light of those obligations, or otherwise modify
our business practices. Any amendments to HIPAA or other legislation amending or broadening the scope of HIPAA might require us to make
substantial expenditures and would likely create additional liability risks.
The Federal Trade Commission
(“FTC”) has used its authority under Section 5 of the FTC Act, which prohibits unfair and deceptive practices affecting consumers,
to bring numerous cases against companies for failing to protect the privacy or security of personal information in a manner that is
reasonable and fully consistent with stated privacy policies, notices, or other representations. The FTC has considered codifying its
requirements in regulations, but has not done so; as a result, the optimal means to mitigate the risk of such an action are uncertain.
In addition, many U.S. states
in which we operate have laws that protect the privacy and security of personal information. Certain state laws may be more stringent
or broader in scope, or offer greater individual rights, with respect to personal information than federal, international or other state
laws, and such laws may differ from each other, which complicates compliance efforts. For example, the California Confidentiality of
Medical Information Act (the “CMIA”) imposes stringent data privacy and security requirements and obligations with respect
to the personal health information of California residents. The CMIA authorizes administrative fines and civil penalties of up to $25,000
for willful violations and up to $250,000 if the violation is for purposes of financial gain, as well as criminal fines. Other states,
including California, Colorado, Connecticut, Delaware, Indiana, Iowa, Montana, New Hampshire, New Jersey, Oregon, Tennessee, Texas, Utah,
and Virginia, have recently adopted broadly applicable privacy laws, though these laws typically exempt personal health information or
entities that handle personal health information pursuant to laws like HIPAA. Both Nevada and Washington State have enacted laws specifically
to protect the privacy of health information. Violations of the Washington State law can result in civil penalties of up to $7,500 per
violation, up to $25,000 in treble damages at the sole discretion of the court, and injunctive relief. Consumers also may bring their
own actions to recover (i) actual damages, (ii) treble damages; and (iii) attorney’s fees. Violations of the Nevada law can result
in up to $10,000 civil penalties per violation and injunctive relief.
Management's Discussion & Analysis (MD&A)
New heading “Acquisition of Melinta”
New heading “Convertible Notes Offering”
New heading “Follow-On Offering”
New heading “Revenue from Product Sales”
New heading “Unrealized Gains on Marketable Security”
New heading “Change in Contingent Consideration”
New heading “Tax Expense / Benefit”
New heading “Net Cash (Used in) Provided by Investing Activities”
Removed heading “Quarterly Results of Operations (Unaudited):”
Removed heading “Net Cash Used in Operating Activities”
Largest changes
“● We account for product revenue from the sale of our product, DefenCath, in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”) which entails our estimates and judgments primarily in determining the transaction price and more specifically as it relates to variable consideration associated with the contracts. Our customers are located in the United States and consist primarily of outpatient service providers and to a lesser extent specialty wholesale distributors. …”see in full comparison
“Pursuant to the terms of the Merger Agreement, we acquired Melinta via a merger in which Merger Sub merged with and into Melinta, with Melinta surviving as a wholly-owned subsidiary of the Company. …”see in full comparison
Full comparison: every changed paragraph (101)
Our primary focus ishas been
commercializing
our lead product, DefenCath® (taurolidine and heparin), in the U.S.U.S., which we launched in 2024 in the hemodialysis setting. The name
DefenCath is the U.S. proprietary name approved by the
U.S. Food and Drug Administration (“FDA”). CorMedix launched the product commercially in April 2024 in the inpatient setting
and July 2024 in the outpatient hemodialysis setting.FDA.
DefenCath
is an FDA
approved antimicrobial CLS (a formulation of taurolidine 13.5 mg/mL, and heparin 1000 USP Units/mL) indicated to reduce the
incidence of CRBSI in adult patients with kidney failure receiving chronic hemodialysis through a CVC.CVC It is indicated for use in a
limited limited
and specific population of patients. CRBSIs, a clinically confirmed subset of the epidemiological surveillance term, central line associated
bloodstream infection (“CLABSI”),CRBSIs can lead to treatment delays and increased costs to the healthcare system when
they occur
due to extended and often repeat hospitalizations, need for IV antibiotic treatment, long-term anticoagulation therapy,
removal/replacement
of the CVC, related treatment costs, as well as increased mortality. We believe DefenCath canis addressthe first and only
FDA-approved antimicrobial CLS in the U.S. and was shown to reduce the risk of CRBSI by up to 71% in a significantPhase unmet3 medicalclinical need.study.
Following the submission of
a duplicate NTAP application to CMS, CMS issued the IPPS 2024 proposed rule that includes a NTAP per hospital stay for DefenCath. This
NTAP represents reimbursement to inpatient facilities of 75% of the wholesaler acquisition cost (“WAC”) price per 3 mL vial,
and an average utilization of 19.5 vials per hospital stay. The final IPPS rule amended as of October 1, 2024 to reflect the current WAC
of $249.99 per 3ml vial resulting in a potential maximum NTAP of $3,656.10.
On November 15, 2023, we announced
that the FDA approved the NDA for DefenCath to reduce the incidence of CRBSI in adult patients with kidney failure receiving chronic hemodialysis
through a CVC. DefenCath is the first and only FDA-approved antimicrobial CLS in the U.S. and was shown to reduce the risk of CRBSI by
up to 71% in a Phase 3 clinical study. As a result of the November 2023 FDA approval, CorMedix launched the product commercially in April
2024 in the inpatient setting and July 2024 in the outpatient hemodialysis setting.
DefenCath is listed in the
Orange Book as having NCE exclusivity (5 years) expiring on November 15, 2028, and the GAIN exclusivity extension of the NCE exclusivity
(an additional 5 years) expiring on November 15, 2033. The GAIN exclusivity extension of 5 years is the result of the January 2015 designation
of DefenCath as a QIDP.
On January 25, 2024, CMS determined
that DefenCath should be classified as a renal dialysis service that is subject to the Medicare
ESRD PPS.PPS, The ESRD PPSwhich provides bundled
payment for renal dialysis services,services but alsoand affords a transitional drug add-on payment adjustment, or TDAPA, which provides temporary,
additional payments
for certain new drugs and biologicals. We submitted an application for TDAPA on January 26, 2024, and received confirmation
that our application was approved on April 18, 2024 for a July 1, 2024 implementation. We also submitted a HCPCS application for a J-code
to CMS on December 8, 2023, for DefenCath, which is relevant to billing and the TDAPA application. The HCPCS J-code for DefenCath was
published by CMS on April 2, 2024. TDAPA reimbursement is calculated based on 100 percent ASP (or 100 percent of wholesale acquisition
price or manufacturers’ list price, respectively, if such data is unavailable). TDAPA and post-TDAPA add-on payment adjustments
for DefenCath apply for five years (with such add-on payments applying to all ESRD PPS payments for years three through five). CMSDefenCath’s
TDAPA confirmed
abegan on July 1, 2024 implementation date for HCPCS and TDAPA.2024.
Looking forward, on July 1, 2026, DefenCath’s TDAPA reimbursement transitions into a three-year, post-TDAPA Add-On Payment phase, the calculation of which is determined and published by CMS and will be $2.37 for the third and fourth quarters of 2026. As a result of the methodology utilized by CMS, the level of reimbursement provided to institutions treating dialysis patients will significantly decline, and as a result, we expect a corresponding reduction to net pricing for DefenCath in the third and fourth quarters of 2026. If CMS utilizes the same methodology to calculate the 2027 post-TDAPA Add-On Adjustment, which will be effective on January 1, 2027, we estimate the value of the Add-On Adjustment will be three to five-times higher than that granted for the third and fourth quarters of 2026, which we expect may result in higher DefenCath sales prices in 2027 relative to the second half 2026. After January 1, 2027, the post-TDAPA Add-On Payment will be reassessed again and be made effective on January 1, 2028 and January 1, 2029, covering the three-year period through June 30, 2029.
Acquisition of Melinta
On August 29, 2025 (the “Closing Date”), we completed the acquisition of Melinta. The acquisition of Melinta expanded our team, commercial platform and increased the commercial portfolio with six marketed, hospital- and clinic-focused infectious disease products, comprised of REZZAYO® (rezafungin for injection), MINOCIN® (minocycline) for Injection, VABOMERE® (meropenem and vaborbactam), KIMYRSA® (oritavancin), ORBACTIV® (oritavancin), BAXDELA® (delafloxacin), and an additional well-established cardiovascular product, TOPROL-XL® (metoprolol succinate) (together, the Melinta Portfolio. REZZAYO is currently approved for the treatment of candidemia and invasive candidiasis in adults, with an ongoing Phase III study for the prophylaxis of invasive fungal infections in adult patients undergoing allogeneic blood and marrow transplantation. The completion of the Phase III study for REZZAYO is expected in 2026.
The financial results of Melinta are included in our consolidated financial statements starting on August 29, 2025. Melinta’s financial results were not reflected in reported figures in the periods preceding the Closing Date. As a result, the reported results for 2025 and 2024 are not comparable. To assist with the discussion of 2025 and 2024 results on a comparable basis and provide more meaningful discussion, certain pro forma historical results are included in Note 3 to the Consolidated Financial Statements included herein. This information does not purport to reflect what our financial and operational results would have been had the acquisition been consummated at the beginning of the periods presented. In addition, further information relating to the acquisition of Melinta is included in Note 3 to the Consolidated Financial Statements included herein.
Pursuant to the terms of the Merger Agreement, we acquired Melinta via a merger in which Merger Sub merged with and into Melinta, with Melinta surviving as a wholly-owned subsidiary of the Company. In consideration for the Merger, we (i) paid to the former Melinta equity holders an aggregate of $260.0 million in cash, subject to adjustment for estimated Company Cash and estimated Working Capital as compared to the Working Capital Target (each as defined in the Merger Agreement), and (ii) issued to certain of the former Melinta equity holders an aggregate of 3.3 million common shares of the Company (the “Merger Shares”). In addition, in connection with the Merger, we paid $23.2 million to acquire the Toprol XL product rights, which Melinta had licensed from a third party. The total cash consideration was funded by a combination of the Company’s existing cash on hand and net proceeds from the Company’s $150.0 million aggregate principal amount of convertible senior notes due 2030 (as described below).
Additionally, former Melinta equity holders are eligible to receive certain contingent payments pursuant to the terms of the Merger Agreement and the Contingent Payment Agreement, which provides for milestone and net sales-based payments. Upon the issuance of the FDA marketing approval of REZZAYO (or any product that contains the active ingredient rezafungin), for the prevention or prophylaxis of invasive fungal infections in adult patients undergoing allogeneic stem cell blood and marrow transplant or the regulatory equivalent on or prior to June 30, 2029, we shall pay, in cash or common shares, par value $0.001 per share, of the Company at the Company’s election, to the former Melinta equity holders the following payments:
Further, the Contingent Payment Agreement provides that we will pay to the former Melinta equity holders tiered royalties on REZZAYO U.S. net sales and low-single-digit royalties on MINOCIN® U.S. net sales.
Additionally, on the Closing Date, the Company and the consenting Melinta members entered into a registration rights agreement (the “Registration Rights Agreement”), pursuant to which, among other things, the Company agreed to register for resale, pursuant to Rule 415 under the Securities Act, the Merger Shares, pursuant to the Contingent Payment Agreement.
Convertible Notes Offering
On August 6, 2025, the Company entered into subscription agreements with certain investors to provide for the issuance of $150.0 million aggregate principal amount of its convertible senior notes due 2030 (the “Notes”) in a private placement, exempt from registration pursuant to Section 4(a)(2) of the Securities Act. The Notes were issued on August 12, 2025 and are eligible for resale to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A of the Securities Act.
The Notes are governed by an Indenture, by and between the Company and U.S. Bank Trust Company, National Association, as trustee. The Notes bear interest at a rate of 4.00% per annum, payable semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2026. The Notes will mature on August 1, 2030 and are senior, unsecured obligations of the Company.
The Company used the net proceeds of the issuance of the Notes to fund a portion of the purchase price payable in connection with the Merger, including related fees and expenses. See Note 7 to the Consolidated Financial Statements for further information regarding the Notes.
Follow-On Offering
In addition, on June 30, 2025, the Company completed an underwritten public offering of common stock pursuant to the Company’s universal shelf registration statement on Form S-3, selling an aggregate of 6,604,507 shares, at the price of $12.87 per share less an underwriting discount of $0.229 per share (the “Follow-On Offering”). The Company received aggregate net proceeds of approximately $82.4 million after deducting the underwriting discounts and commissions and offering expenses payable by the Company. See Note 10 to the Consolidated Financial Statements for further information regarding the Follow-On Offering.
We announced on June 6, 2024
that the CMS has determined that DefenCath qualified for pass-through status under the hospital Out-Patient Prospective Payment System
(“OPPS”). Pass-through status provides for separate payment under Medicare Part B for the utilization of DefenCath in the
outpatient ambulatory setting for a period of at least two years, and up to a maximum of three years. While vascular access for hemodialysis
can be initiated in an inpatient setting, ambulatory surgical centers or vascular access centers offer a less-invasive, outpatient-based
alternative for patients. We estimate that up to 100,000 HD-CVC placements occur each year, and pass-through status offers providers
a separate reimbursement mechanism in this setting of care administration of DefenCath.
Subsequent to the launch
of DefenCath in April 2024, we announced U.S.-based multi-year commercial supply agreements consisting of a large and several mid-sized
dialysis organizations. Each provider has customized an implementation plan to provide access to patients based on a variety of clinical
and other factors. We believe the currently contracted customer base represents roughly 60% of the outpatient dialysis centers in the
U.S.
Revenue from Product Sales
We generate product revenue from commercial sales of DefenCath to a limited number of direct customers as well as distributors and, from the Closing Date, we generate revenue from sales of the Melinta Portfolio. We recognize revenue from the sale of our Products when our direct customers obtain control of the product and is recorded at the transaction price, net of estimates for variable consideration consisting of chargebacks, discounts, returns, rebates, shelf-stock adjustments and data fees. Actual amounts of consideration ultimately received may differ from our estimates. If actual results vary materially from our estimates, we will adjust these estimates, which will affect revenue from product sales and earnings in the period such estimates are adjusted.
We continue to assess our estimates of variable consideration as we accumulate additional historical data and will adjust these estimates accordingly.
Contract Revenue
As a result of the Merger, we recognize revenue associated with Melinta’s license and collaboration agreements for the research and development and/or commercialization of its therapeutic products in the form of licensing fees, milestone payments, royalties on sales in our partners’ respective licensed territories, and sale of product inventory.
In addition, Melinta holds a partnership with BARDA, a government agency, to advance BAXDELA and VABOMERE for use in pediatrics and to partner on the development of BAXDELA against certain biothreat pathogens. Research and development services under the contract are recognized as contract revenue over time, as the performance obligation is satisfied, in accordance with the BARDA agreement. Under this contract, BARDA has awarded a total of $47.5 million with the potential of additional funding of $97.1 million, amounting to total funding up to $144.6 million, if all options are exercised. If all contract options are exercised, the contract is expected to continue through 2034.
Our ability to continue to generate revenue and become profitable depends
on our ability to continue to successfully commercialize DefenCath and achieve gross profits from DefenCath sales that are greater than
our ongoing operating costs. If we fail to continue to successfully commercialize DefenCath, or any other product lines we advance in
a timely manner or obtain regulatory approval for them, our ability to generate future revenue, and our results of operations and financial
position, could be adversely affected. Prior to the commercial launch of DefenCath, we have funded our operations primarily through equity
financings.
Cost of revenues include
direct and indirect costs related to the manufacturing and distribution of DefenCath,our Products, including product cost, packaging services,
freight,
amortization of the license intangible asset and an allocation of overhead costs that are primarily fixed such as salaries, benefits
and insurance. In addition, cost of
revenues includes the amortization of intangible assets primarily associated with the fair value of the products acquired in the Melinta
Portfolio that were recorded as a result of the Merger (see Note 3 to the Consolidated Financial Statements included herein).
Research and development,
ordevelopment (“R&D, D”)
expense consists of: (i) internal costs associated with our development activities; (ii) payments we make to third-party
contract research
organizations, contract manufacturers, investigative sites, and consultants; (iii) technology and intellectual property
license costs;
(iv) manufacturing development costs; (v) personnel related expenses, including salaries, stock–based compensation
expense, benefits,
travel and related costs for the personnel involved in drug development; and (vi) activities relating to regulatory filings
and pre-clinical
studies and clinical trials; and (vii) manufacturing-related costs, including previously expensed pre-NDA approval inventory
amounting to approximately $6,400,000, through November 15, 2023.trials. All R&D is expensed as incurred.
Development timelines, probability
of success and development costs vary widely. We are currently focused on the commercialization of DefenCathour Products in the U.S.United States.
Selling and marketing,marketing or
(“S&M, M”)
expense includes the cost of salaries and related costs for personnel in sales and marketing,marketing including our contract sales force, brand
building, advocacy, market
research and consulting costs. Selling and marketing expenses are expensed as incurred.
General and administrative,administrative
or (“G&A,A”) expenses consist principally of salaries and related costs for personnel in executive, finance and administrative
functions functions
including payroll taxes and health insurance, stock-based compensation and travel expenses. Other general and administrative
expenses expenses
include merger-related costs, facility-related costs, insurance and professional fees for legal, patent review, consulting, and
accounting services. General
and administrative expenses are expensed as incurred.
Foreign currency exchange
transaction gain (loss) is the result of re-measuring transactions denominated in a currency other than our functional currency and is
reported in the consolidated statement of operations as a separate line item within other income (expense). The intercompany loans outstanding
between our New Jersey-based company and our subsidiaries will not be repaid and the nature of the funding advanced was of a long-term
investment nature. As such, unrealized foreign exchange movements related to long-term intercompany loans are recorded in other comprehensive
income (loss).
Foreign currency exchange transaction gain (loss) is the result of re-measuring transactions denominated in a currency other than our functional currency and is reported in the consolidated statement of operations as a separate line item within other income (expense).
Unrealized Gains on Marketable Security
Unrealized gains on marketable security represents the change in fair market value of our marketable equity securities.
Change in Contingent Consideration
Change in contingent consideration represents the change in fair market value of the contingent consideration liabilities in connection with the Merger. Contingent consideration in connection with the business combination is initially measured at fair value at the acquisition date and classified as a liability and subsequently remeasured at fair value at each reporting date using a probability-weighted discounted cash flow model, or Monte Carlo simulation, based on significant inputs. Changes in fair value are recognized as change in contingent consideration within other expenses in the consolidated statement of operations.
Interest expense consists
primarily of interest incurred on financingthe of expenditures.Notes.
Tax Expense / Benefit
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operating results in the period that includes the enactment date. Management assesses the realizability of deferred tax assets and records a valuation allowance if it is more likely than not that all or a portion of the deferred tax assets will not be realized.
The following is a tabular presentation of our audited consolidated operating results for the years ended December 31, 2025 and 2024 (in thousands): Results for 2025 are inclusive of Melinta’s operations from the acquisition date of August 29, 2025 through December 31, 2025, while the prior period does not include combined results. The below discussion of changes to our revenue and expenses compared to the prior year largely focus on material factors independent of the acquisition.
The following is a tabular
presentation of our consolidated operating results for the years ended December 31, 2024 and 2023 (in thousands):
Revenue. Revenue for
the year ended December 31, 2024 was $43.5 million as compared to $0 for the same period in 2023. Revenue consists of sales of DefenCath,
which was approved by the FDA in November 2023 and launched in the U.S in April 2024 (inpatient setting) and July 2024 (outpatient setting)
and reflects the shipment of DefenCath to direct customers and specialty distributors, net of estimates for applicable variable consideration,
which consists primarily of distribution service fees, prompt pay and other discounts, product returns, chargebacks, rebates and volume
incentive rebates.
Cost of Revenue. Cost
of revenue for the year ended December 31, 2024 was $3.2 million as compared to $0 for the same period in 2023. Cost of revenues include
direct and indirect costs related to the manufacturing and distribution of DefenCath, including product cost, packaging services, freight,
amortization of the license intangible asset and an allocation of overhead costs that are primarily fixed such as salaries, benefits
and insurance. Direct costs of product sales during the year ended December 31, 2024 were minimal as DefenCath sold to date represented
validation lot units previously expensed as R&D. This only marginally benefited the total gross margin in 2024 and the majority of
validation batch product has been sold as of December 31, 2024. Indirect costs of approximately $3.0 million for the year ended December
31, 2024, represent the proportion of supply chain and quality personnel, benefits and insurance expenses representing excess capacity
in the production of sellable product. As unit sales increase, a greater proportion of these costs will be capitalized as a component
of inventory and expensed at the point-of-sale.
Research and Development
Expense. R&D expense for the year ended December 31, 2024 was $3.9 million, a decrease of $9.2 million, or 70%, from $13.2 million
for the same period in 2023. The decrease was driven by the approval of DefenCath. As a result of the transition to commercial operations,
costs related to medical affairs and certain other personnel that supported R&D efforts prior to the FDA approval of DefenCath of
approximately $6.9 million began supporting non research and development operations and have been recognized in cost of revenue or general
and administrative expense during the year ended December 31, 2024 Also, in 2023, prior to FDA approval, there were $1.5 million of costs
recognized in R&D related to the manufacturing of DefenCath validation batches. These types of costs are now capitalized in inventory
as DefenCath is a commercialized product.
Selling and Marketing Expense.
S&M expense was $28.7 million for the year ended December 31, 2024, an increase of $10.6 million, or 59%, from $18.1 million for
the same period in 2023. The increase was due primarily to increased marketing efforts and new personnel hired in late 2023 or throughout
2024, inclusive of our sales force and support for the commercial launch of DefenCath during 2024. Subsequent to December 31, 2024, we
severed our internal sales force, future costs associated with the Syneos sales force are expected to be similar to those recognized internally
in 2024.
General and Administrative
Expense. G&A expense for the year ended December 31, 2024 was $30.0 million, an increase of $12.3 million, or 69%, from $17.7
million for the same period in 2023. The increase was driven by the approval of DefenCath. As a result of the transition to commercial
operations, certain medical affairs, other personnel and consulting expenses of approximately $6.0 million previously classified in R&D
are included in G&A expense during the year ended December 31, 2024. Additional G&A personnel were also hired throughout 2024
in anticipation of and to support commercial operations, representing an increases of $2.8 million as well as increases in legal and
compliance of $1.7 million and consulting fees of $0.9 million.
InterestRevenue. Income. Interest
incomeRevenue for
the year ended December 31, 20242025 was $2.6$311.7 million,million aas decreasecompared ofto $0.1 million, or 4%, from $2.7$43.5 million for the same period
in 2023,2024, duean toincrease lowerof short-term$268.2 investmentsmillion,
or during this period as compared to the same period last year.617%.
For the years ended December 31, 2025 and 2024, product sales were $304.3 million and $43.5 million, respectively, representing an increase of $260.8 million, or 600%. Product sales during fiscal year 2024 and 2025 consist primarily of sales of DefenCath, which was approved by the FDA in November 2023 and launched in the U.S in April 2024 (inpatient setting) and July 2024 (outpatient setting) and reflects the shipment of DefenCath to direct customers and specialty distributors, net of estimates for applicable variable consideration. Revenue from the Melinta Portfolio represents $45.5 million of product sales, net of applicable variable consideration, for the post-acquisition period, starting August 29, 2025.
In 2024, we entered into multi-year commercial supply agreements with a large and several mid-sized dialysis organizations. Each dialysis provider customized its implementation plan to provide access to patients based on a variety of clinical and other factors. We believe the currently contracted customer base represents roughly 60% of the outpatient dialysis centers in the U.S. in terms of the total addressable patient market. During the second quarter of 2025, the Company’s largest volume customer commenced ordering, patient utilization commenced in the third quarter of 2025, driving significant sales growth in the second half of 2025 relative to the first half.
Contract revenue for 2025 is related solely to the acquired operations of Melinta after the Closing Date of August 29, 2025 and reflects $4.2 million earned under the BARDA agreement and $3.2 million related to milestone, royalty, and inventory revenue under Melinta’s licensing agreements.
The following is a summary of our Total Revenue between the DefenCath sales and the contribution from the Melinta Portfolio from the Closing Date of August 29, 2025 through the end of 2025. The table below represents consolidated revenue for the year ended December 31, 2025 and 2024 (in thousands):
Cost of Revenue. Cost of revenue for the year ended December 31, 2025 was $22.1 million as compared to $3.0 million for the same period in 2024, an increase of $19.1 million, or 628%. Cost of revenues include direct and indirect costs related to the manufacturing and distribution of DefenCath and the Melinta Portfolio, including product cost, packaging services, freight, and an allocation of overhead costs that are primarily fixed such as salaries, benefits and insurance. The increase from 2024 to 2025 is primarily driven by higher product sales and to a lesser extent, costs associated with the sales of the Melinta Portfolio.
Intangible Asset Amortization. Amortization of intangible assets was $13.9 million and $0.2 million for the year ended December 31, 2025 and 2024, respectively. The increase was primarily due to the intangible assets acquired in connection with the Merger.
Research and Development Expense. R&D expense for the year ended December 31, 2025 was $19.3 million, an increase of $15.4 million, or 390%, from $3.9 million for the same period in 2024. The increase was due primarily to the increases in personnel and clinical trial services in support of the ongoing clinical studies initiated in the fourth quarter of 2024 as well as severance costs and the incremental cost of Melinta’s operations starting on August 29, 2025.
Selling and Marketing Expense. S&M expense was $38.1 million for the year ended December 31, 2025, an increase of $9.4 million, or 32%, from $28.7 million for the same period in 2024. These increases were primarily due to severance costs and the incremental cost of Melinta’s operations starting on August 29, 2025 and the termination cost associated with the Syneos contract, offset by additional marketing costs related to the pre-launch and launch of DefenCath in 2024.
General and Administrative Expense. G&A expense for year ended December 31, 2025 was $68.2 million, an increase of $38.2 million, or 128%, from $30.0 million for the same period in 2024. These increases were primarily driven by the Merger-related transaction costs, severance costs, the incremental cost of Melinta’s operations starting on August 29, 2025 including higher headcount with the combined company, non-cash charges for stock-based compensation and an increase in costs related to business development.
What changed in the latest 10-Q
Risk Factors
Our business is subject to a number of risks, including those identified in Item 1A of Part I of our 2025 Form 10-K. There have been no material changes to the risk factors described in our 2025 Form 10-K.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
“The Company evaluates long-lived assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Certain acquired product-related intangible assets, including assets associated with the oritavancin product group (KIMYRSA and ORBACTIV), require significant management judgment regarding future net cash flows, including assumptions related to market demand, competitive dynamics, pricing, reimbursement, commercialization strategies and projected operating costs. …”see in full comparison
General and Administrative Expense ("G&A") expense for the three months endedsee in full comparisonMarchJune31,30, 2026 was$21.7$15.1 million, an increase of$12.0$5.6 million, or124%,59%, from$9.7$9.5 million for the same period in 2025. G&A expenses for the six months ended June 30, 2026 was $36.8 million, an increase of $17.6 million, or 92% from the six months ended June 30, 2025 of $19.2 million. The increase was primarily attributable to higher costs associated with operating as a combined company following the merger, including increased facilities, personnel, patent-related costs, information technology infrastructure, and Prescription Drug User Fee Act (“PDUFA”) fees. In addition, general and administrative expense increased due to higher branded prescription drug fees driven by growth in productsales,sales.asThewellincreaseaswashigherpartially offset by the recognition of $4.2 million of loss recoveries during the three months ended June 30, 2026, associated with amounts expected to be reimbursed for incurred, qualified litigation-relatedcosts.legal fees under the Company's insurance coverage supporting its ongoing securities litigation. Of the $4.2 million, $2.4 million and $1.5 million, respectively, relates to qualified legal fees incurred in the first quarter of 2026 and the second quarter of 2026.
For the three months endedsee in full comparisonMarchJune31,30, 2026 and 2025, ProductSalessales were$121.9$94.3 million and$39.1$39.7 million, respectively, representing an increase of$82.8$54.6 million or212%.137%. For the six months ended June 30, 2026 and 2025, Product sales were $216.3 million and $78.8 million, respectively, representing an increase of $137.4 million or 174%. The increaseiswas primarily due to sustained DefenCath demand, including with the onboarding of our large dialysis customer mid-last year, along with the addition of Melinta revenue. ProductSalessales during the periods consist primarily of sales of DefenCath and reflects the shipment of DefenCath to direct customers and specialty distributors, net of estimates for applicable variable consideration, which consists primarily of distribution service fees, prompt pay and other discounts, product returns, chargebacks, rebates and volume incentive rebates, shelf-stock adjustments and data fees, and includes a change in accounting estimate for Medicaid and returns' sales allowances of zero and $9.0 million during the three and six months endedMarchJune31,30,2026.2026, respectively. Revenue from the Melinta Portfolio represents$24.4$28.2 million and $52.6 million of product sales in thefirstthreequarterandofsix2026,monthsreflectingended June 30, 2026. The six-month Melinta Portfolio revenue reflects typicalfirst quarterpurchasing patterns for theMelintarelevantPortfolio,period, including the impact of lower wholesaler channel inventory levels at the end of thefirstsecond quarter of 2026 relative to the fourth quarter of 2025.
Revenue and grant income for the three months endedsee in full comparisonMarchJune31,30, 2026 was$127.4$101.9 million as compared to$39.1$39.7 million for the same period in 2025, an increase of$88.3$62.2 million or226%.157%. Revenue for the six months ended June 30, 2026 was $229.4 million as compared to $78.8 million for the same period in 2025, an increase of $150.5 million or 191%. The increase for both the three and six months ended June 30, 2026 is due to higher demand of DefenCath along with the inclusion of the MelintaPortfolioportfolio inthe three months ended March 31, 2026 as well as strong first quarter execution and positive underlying demand trends.2026.
Tax Expense wassee in full comparison$17.0$12.7 million for the three months endedMarchJune31,30, 2026, compared to$0.0$0.5 million for the same period in the prior year. Tax expense for the six months ended June 30, 2026 was $29.8 million compared to $0.5 million in the same period of 2025. The tax expense for the current period reflects estimated federal and state income taxes. In contrast,notheincomeprior year only reflected state taxexpense was recorded for the three months ended March 31, 2025,as theCompanycompanymaintainedhad a full valuation allowance against itsdeferredfederal taxassets during that period.basis.
Intangible Asset Amortization was $10.3 million and $0.1 million for the three months endedsee in full comparisonMarchJune31,30, 2026 andMarchJune31,30, 2025, an increase of $10.2 million, or 19,708%, respectively. Intangible asset amortization for the six months ended June 30, 2026 was $20.6 million compared to $0.1 million in 2025, respectively, an increase of $20.5 million or 19,708%, respectively. The increase wasprimarilydue to the intangible assets acquiredasinpartconnection with the acquisition ofthe mergerMelinta completed in the third quarter of 2025.
Full comparison: every changed paragraph (29)
On June 8, 2026, the United States Court of Appeals for the Federal Circuit affirmed the judgment of the U.S. District Court for the Northern District of Illinois that the patents covering its product MINOCIN® for Injection are valid and infringed by the product developed by Nexus Pharmaceuticals, Inc.
On July 1, 2026, DefenCath’s TDAPA reimbursement transitionstransitioned into a post-TDAPA Add-On Adjustment, the calculation of which is determined by CMS. As a result of the methodology utilized by CMS, the level of reimbursement provided to institutions treating dialysis patients will significantly decline,declined, and as a result, CorMedix expects a corresponding reduction to its net pricingpricing, resulting in lower net sales, for DefenCath in the second half of 2026.2026 relative to historical periods. We currently estimate, based on the known CMS methodology for calculation of the post TDAPA Add-on, that the 2027 payment could increase meaningfully above the payment rate for the second half of 2026.
Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025.
The following is a tabular presentation of our unaudited condensed consolidated operating results for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):
Revenue and grant income for the three months ended MarchJune 31,30, 2026 was $127.4$101.9 million as compared to $39.1$39.7 million for the same period in 2025, an increase of $88.3$62.2 million or 226%.157%. Revenue for the six months ended June 30, 2026 was $229.4 million as compared to $78.8 million for the same period in 2025, an increase of $150.5 million or 191%. The increase for both the three and six months ended June 30, 2026 is due to higher demand of DefenCath along with the inclusion of the Melinta Portfolioportfolio in the three months ended March 31, 2026 as well as strong first quarter execution and positive underlying demand trends.2026.
For the three months ended MarchJune 31,30, 2026 and 2025, Product Salessales were $121.9$94.3 million and $39.1$39.7 million, respectively, representing an increase of $82.8$54.6 million or 212%.137%. For the six months ended June 30, 2026 and 2025, Product sales were $216.3 million and $78.8 million, respectively, representing an increase of $137.4 million or 174%. The increase iswas primarily due to sustained DefenCath demand, including with the onboarding of our large dialysis customer mid-last year, along with the addition of Melinta revenue. Product Salessales during the periods consist primarily of sales of DefenCath and reflects the shipment of DefenCath to direct customers and specialty distributors, net of estimates for applicable variable consideration, which consists primarily of distribution service fees, prompt pay and other discounts, product returns, chargebacks, rebates and volume incentive rebates, shelf-stock adjustments and data fees, and includes a change in accounting estimate for Medicaid and returns' sales allowances of zero and $9.0 million during the three and six months ended MarchJune 31,30, 2026.2026, respectively. Revenue from the Melinta Portfolio represents $24.4$28.2 million and $52.6 million of product sales in the firstthree quarterand ofsix 2026,months reflectingended June 30, 2026. The six-month Melinta Portfolio revenue reflects typical first quarter purchasing patterns for the Melintarelevant Portfolio,period, including the impact of lower wholesaler channel inventory levels at the end of the firstsecond quarter of 2026 relative to the fourth quarter of 2025.
Contract Revenuerevenue reflects $2.4$5.0 million earned under the BARDA agreement and $3.1$8.0 millionmillion, respectively, related to milestone, royalty, and inventory revenue under Melinta’s licensing agreements.agreements for the three and six months ended June 30, 2026. There was no contract revenue for the three and six months ended June 30, 2025.
Grant income reflects $2.7 million and $5.1 million, respectively, earned under the BARDA agreement for the three and six months ended June 30, 2026. There was no grant income for the three and six months ended June 30, 2025.
Cost of Sales for the three months ended MarchJune 31,30, 2026 was $12.0$14.5 million as compared to $1.5$1.8 million for the same period in 2025, an increase of $10.5$12.7 million, or 677%.701%. Cost of sales for the six months ended June 30, 2026 was $26.5 million compared to $3.4 million in 2025, an increase of $23.1 million, or 690%. Cost of revenues include direct and indirect costs related to the manufacturing and distribution of DefenCath and Melinta Portfolio, including product cost, packaging services, freight, and an allocation of overhead costs that are primarily fixed such as salaries, benefits and insurance. The increase from 2025 to 2026 is primarily due to higher product sales, driven by higher volume of DefenCath sales and the acquisition of Melinta in August 2025.
Intangible Asset Amortization was $10.3 million and $0.1 million for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, an increase of $10.2 million, or 19,708%, respectively. Intangible asset amortization for the six months ended June 30, 2026 was $20.6 million compared to $0.1 million in 2025, respectively, an increase of $20.5 million or 19,708%, respectively. The increase was primarily due to the intangible assets acquired asin partconnection with the acquisition of the mergerMelinta completed in the third quarter of 2025.
Research and Development Expense ("R&D") expense for the three months ended MarchJune 31,30, 2026 was $7.2$6.7 million, an increase of $4.0$4.3 million, or 126%,174%, from $3.2$2.4 million for the same period in 2025. R&D expense for the six months ended June 30, 2026 was $13.9 million compared to $5.6 million in 2025, an increase of $8.3 million or 147%. The increase was driven primarily by increased personnel and clinical trial services related to pediatric programs for certain Melinta portfolio products, as well as activities supporting additional DefenCath indications.
Selling and Marketing Expense ("S&M") expense was $12.5$12.4 million for the three months ended MarchJune 31,30, 2026, an increase of $8.0$6.1 million, or 180%,95%, from $4.5$6.4 million for the same period in 2025. S&M expense for the six months ended June 30, 2026 was $25.0 million compared to $10.9 million, an increase of $14.1 million, or 130%. The increase was primarily due to higher personnel cost associated with the larger product portfolio and marketing programs resulting from our acquisition of Melinta.
General and Administrative Expense ("G&A") expense for the three months ended MarchJune 31,30, 2026 was $21.7$15.1 million, an increase of $12.0$5.6 million, or 124%,59%, from $9.7$9.5 million for the same period in 2025. G&A expenses for the six months ended June 30, 2026 was $36.8 million, an increase of $17.6 million, or 92% from the six months ended June 30, 2025 of $19.2 million. The increase was primarily attributable to higher costs associated with operating as a combined company following the merger, including increased facilities, personnel, patent-related costs, information technology infrastructure, and Prescription Drug User Fee Act (“PDUFA”) fees. In addition, general and administrative expense increased due to higher branded prescription drug fees driven by growth in product sales,sales. asThe wellincrease aswas higherpartially offset by the recognition of $4.2 million of loss recoveries during the three months ended June 30, 2026, associated with amounts expected to be reimbursed for incurred, qualified litigation-related costs.legal fees under the Company's insurance coverage supporting its ongoing securities litigation. Of the $4.2 million, $2.4 million and $1.5 million, respectively, relates to qualified legal fees incurred in the first quarter of 2026 and the second quarter of 2026.
Unrealized loss on marketable security represents the change in fair value for its marketable equity securities in Talphera, a publicly-traded biotechnology company. For the three months and six months ended, MarchJune 31,30, 2026, we recognized a $3.5$2.5 million gain and $1.0 million loss respectively related to the decreasechange in fair value of the Talphera stock. As the investment was purchased in the third quarter of 2025, there was no comparative amount in 2025.
Change in contingent consideration for the three and six months ended MarchJune 31,30, 2026, we recognized change in the fair value of contingent consideration of $4.2$6.7 million and $10.9 million, primarily driven by the changes in the present value of expected payments resulting from discount accretion. As the merger closed in the third quarter of 2025, there was no comparative amount in the three months ended March 31, 2025.
Other non-operating (expense) income was $0.3$0.1 million of expense for the three months ended MarchJune 31,30, 2026 compared to $0.5$0.8 million of income for the same period last year, a decrease of $0.8$0.9 million.million, or 109%. Other non-operating (expense) income for the six months ended June 30, 2026 was $0.3 million of expense compared to $1.3 million of income for the same period last year, a decrease of $1.7 million, or 126%. The change was primarily due to interest expense on our $150.0 million aggregate principal amount of convertible senior notes due 2030, which were issued during the third quarter of 2025, and partially offset by interest income on cash and short-term investments.
Tax Expense was $17.0$12.7 million for the three months ended MarchJune 31,30, 2026, compared to $0.0$0.5 million for the same period in the prior year. Tax expense for the six months ended June 30, 2026 was $29.8 million compared to $0.5 million in the same period of 2025. The tax expense for the current period reflects estimated federal and state income taxes. In contrast, nothe incomeprior year only reflected state tax expense was recorded for the three months ended March 31, 2025, as the Companycompany maintainedhad a full valuation allowance against its deferredfederal tax assets during that period.basis.
As of MarchJune 31,30, 2026, we had cash, cash equivalents and short-term investments of $178.1$256.7 million, excluding restricted cash of $1.0 million, compared to $148.5 million as of December 31, 2025, excluding restricted cash of $1.0 million. Our primary sources of liquidity continue to be cash generated from operations, cash on hand, and available capital raising capacity. As of MarchJune 31,30, 2026, $22.1 million of our common stock remained available for potential sale under our at-the-market issuance sales agreement, and $15.0 million remained available under our shelf registration statement.
Net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026 was $42.4$128.6 million, compared to $19.7$49.7 million for the threesix months ended MarchJune 31,30, 2025. Cash flows from operating activities were primarily driven by net income, adjusted for non-cash items, and changes in working capital, including accounts receivable, inventory and accrued liabilities. The period-over-period change was primarily attributable to higher net income driven by product sales.
Net cash provided by investing activities for the threesix months ended MarchJune 31,30, 2026 was $3.0$2.4 million, compared to $0.2$20.4 million used in investing activities for the threesix months ended MarchJune 31,30, 2025. Investing activities during the period primarily consisted of proceeds from short-term investments converted into cash partially offset by capital expenditures to support the validation of new contract manufacturing organizations in connection with our initiatives to lower our products' costs of goods as well as to onshore the manufacture of our products, compared to the prior-year period, which did not include significant transactions.
Net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026 was $12.1$19.2 million, compared to $6.1$89.3 million in cash provided by financing activities in the threesix months ended MarchJune 31,30, 2025. Financing activities during the current period primarily consisted of activity under our stock repurchase program and payments of employee withholding taxes for vested restricted stock units, compared to the prior year period which included net proceeds generated from the sale of our common stock in our ATM program, partially offset by payments of employee withholding taxes for vested restricted stock units.
We currently estimate that as of MarchJune 31,30, 2026, we have sufficient cash, cash equivalents and short-term investments to fund operations for at least twelve months from the issuance of these financial statements.
There have been no material changes to our contractual obligations and commitments from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.2025, with the exception of an additional commitment of €6.2 million for the purchase of the active pharmaceutical ingredient (API) for VABOMERE from the CMO in 2027.
● We account for product revenue from the sale of our Products in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”), which entails our estimates and judgments primarily in determining the transaction price and more specifically as it relates to variable consideration associated with the contracts. Our customers are primarily located in the United States and consist primarily of outpatient service providers and to a lesser extent specialty wholesale distributors. Variable consideration pertaining to an allowance for product returns of short-dated or expired product requires estimation as our customers may have differing utilization, storage and distribution methods and we do not yet have significant historical trends specific to DefenCath. The Company’s product return accrual takes into consideration estimates of product held by its customers, the distribution channel, the shelf life of the product held by customers, as well as when the product is eligible for return based on our returns good policy. We have established the estimate for returns based on specific customer circumstances, industry best practices and management experiences, which will continuously be refined as new information is received. At MarchJune 31,30, 2026, we had $13.3$11.9 million in accrued returns allowance including the balance recorded for the Melinta Portfolio.
Variable consideration pertaining to accrued Medicaid rebates requires estimation as our customers may have differing utilizations rates of Medicaid coverage, different utilization within States which may be in either the primary or secondary positions, as well as general fluctuations in patient populations over time. Based on the relatively short time since product launch of DefenCath and the inherent lag time in states’ Medicaid processing, the utilization of information the Company has received is limited and, as such, there is a lack of significant historical trends for Medicaid utilization. The Company’s accrual does take into consideration its customers’ recent actual Medicaid utilization rates as well as anticipated Medicaid utilization rates. At MarchJune 31,30, 2026, the Company had $10.8$10.3 million in accrued Medicaid rebates, including the balance recorded for the Melinta Portfolio.
During the quarterthree months ended March 31, 2026, the Company recorded a change in estimate related to variable consideration for Medicaid rebates and product returns. During the three months ended March 31, 2026, the Company obtained new information regarding Medicaid utilization and updated its assumptions based on substantially completed historical claims data. Such estimates are subject to uncertainty due to the timing and completeness of claims processing. In addition, the Company updated its estimate of product returns as initial rate of return history for DefenCath recently became available, which was lower than previously estimated. For the quarterthree months ended MarchJune 31,30, 2026, there were no changes in estimate that impacted sales or income. For the six months ended June 30, 2026, the resulting changes in accounting estimates positively impacted net sales by $9.0 millionmillion, and positively impacted income from continuing operations and net income by $6.2$6.1 million, net of taxes, and increased basic and diluted earnings per share by $0.08 and $0.07 per share, respectively.
Changes to contingent consideration obligations, other than the passage of time, may result from adjustments related, but not limited, to changes in discount rates and the number of remaining periods to which the discount rate is applied, updates in the assumed achievement or timing of any regulatory milestone or changes in the probability of certain clinical events, changes in our forecasted sales of products acquired, and changes in the assumed probability associated with regulatory approval. At the end of each reporting period, we evaluate the need to remeasure the contingent consideration and, if appropriate, we revalue these obligations and record increases or decreases in their fair value in selling,other general(expense) and administrative expensesincome within the accompanying consolidated statements of operations.
Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, any change in the assumptions described above, could have a material impact on the amount we may be obligated to pay as well as the results of our condensed consolidated results of operations in any given reporting period.
The Company evaluates long-lived assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Certain acquired product-related intangible assets, including assets associated with the oritavancin product group (KIMYRSA and ORBACTIV), require significant management judgment regarding future net cash flows, including assumptions related to market demand, competitive dynamics, pricing, reimbursement, commercialization strategies and projected operating costs. Although management concluded that no impairment existed as of June 30, 2026, these estimates are inherently uncertain. It is reasonably possible that changes in facts and circumstances or revisions to key assumptions could materially affect projected cash flows and result in a material impairment charge in a future reporting period.
CRMD insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-18 | Dillione Janet |
Option exercise | 48,909 | — | — |
| 2026-08-29 | Blum Susan |
Shares withheld for tax | 8,424 | $8.30 | $69.9K |
| 2026-08-29 | Hurlburt Elizabeth |
Shares withheld for tax | 8,076 | $8.30 | $67.0K |
| 2026-08-29 | Zelnick Kaufman Beth |
Shares withheld for tax | 8,424 | $8.30 | $69.9K |
Well-known investors holding CRMD (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| D. E. Shaw & Co. | 2026-06-30 | 171,807 | $1.3M | 0.0% | New position |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 151,435 | $1.2M | 0.0% | Reduced 35% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 56,614 | $444.4K | 0.0% | Reduced 77% |
| Two Sigma Investments | 2026-06-30 | 40,859 | $320.7K | 0.0% | Added 98% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 22,400 | $175.8K | 0.0% | Added 9% |