CorMedix Inc (CRMD)

[Investor100]

Plenty of Positive News @ CRMD

https://www.equities.com/news/4-emerging-growth-biotech-names-for-the-next-generation

RS: We are covering CorMedix Inc. (CRMD:NYSE.MKT), with a Buy rating and price target of $6.50/share. It is a particularly interesting name because it is developing a next-generation anti-infective solution called Neutrolin (taurolidine + citrate + heparin) to prevent catheter-related bloodstream infections (CRBSIs) in patients undergoing hemodialysis.

The company has the FDA's qualified infectious disease product (QIDP) designation, which was enabled by the Generating Antibiotic Incentives Now (GAIN) Act that was signed into law by President Obama in mid-2012. In our view, the CorMedix solution embodies a characteristic that is absolutely critical in the world of novel anti-infective development, and that is the ability to evade resistance by microorganisms and bacteria. Effectively, the company is using a non-antibiotic compound with the main active ingredient taurolidine, which has been widely assessed as active against various infectious organisms. Taurolidine is not like an antibiotic, against which resistance will always evolve. We think this platform positions CorMedix particularly well going forward.
The company is developing taurolidine, in combination with citrate and heparin, to address the issue of catheter colonization by bacteria to form biofilms. You're looking at CRBSIs in patients in the hospital with catheters threaded into their arms or threaded via a central line so they can be fed nutrients, be given a chemotherapy drug, or undergo hemodialysis. The catheter can, inevitably really, become colonized by all kinds of nasty bugs. Using the taurolidine catheter lock solution allows the company to effectively eliminate the bacterial colonization of these catheters.

TLSR: Is the compound bacteriostatic, or is it specifically targeting the formation of biofilms?

RS: Taurolidine has been documented to prevent biofilm formation, which sets it apart from typical antibiotics, which are not effective against biofilms. This puts CorMedix and Neutrolin in a privileged position among anti-infective agents, because Neutrolin can be used broadly without fear that resistance will occur and render it useless.

In addition, because Neutrolin is focused specifically on the CRBSI domain, there is a clear hospital- and dialysis center-based setting for the product. We're not talking about a mass-market product with hundreds of nationwide reps needed in a marketing effort.
We should see interim data from the first of two Phase 3 trials with Neutrolin later this year.

Obviously, if those data are positive, we believe CorMedix could obtain a very lucrative marketing partnership in the U.S., and would potentially be able to accelerate sales of Neutrolin in non-U.S. territories, particularly in Europe, where the compound is approved and marketed in certain countries.

TLSR: Your implied market cap is only about $230M, and I'm assuming that's a 12–18 month price target. As I look at Neutrolin, I'm thinking every intensive care unit (ICU) should be using it because nosocomial (hospital-acquired) infections are something institutions are focusing on. I'm also thinking that all the nephrology/dialysis centers should be using it. And there are other opportunities for taurolidine, such as prevention of urinary tract infections (UTIs) and associated catheter encrustation. Your implied market valuation seems very low considering the potential, and the fact that there is no other FDA-approved product like this on the market. Can you comment on that?

RS: I don't disagree with you. We have a relatively conservative viewpoint here, and the potential future upside may well be significantly greater than what we have projected.
We are, first of all, assuming market penetration only in the domain of CRBSIs—not in UTIs or any medical device or suture-related use of taurolidine. We are also not giving the company significant credit for the commercialization of Neutrolin outside of the U.S. We are only modeling sales in the areas of hemodialysis, ICU patients, patients on oncology drugs administered via intravenous drip, and patients receiving total parenteral nutrition.

In addition, we are assuming a relatively modest market cap compared to the current valuations of other single-product companies in the anti-infective domain—those developing antibiotics against which resistance will inevitably occur.

CRMD-Europe
http://cormedix-europe.com/home-349.html

Investor 100