CorMedix Inc (CRMD)

[Rapture2020]

The following is my opinion and should be used for entertainment purposes only (personally, I’d suggest using as a beer coaster).

THE LPAD PATHWAY.

On last week’s conference call to discuss the statistical significance of the unblinded Neutrolin Phase III data, Khoso and Chew provided shareholders with additional color regarding CRMD’s upcoming meeting with the FDA. CRMD will request their flagship drug, Neutrolin, be approved for hemodialysis patients under the FDA’s Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD). CRMD is able to make the request based on two game-changing, data-driven events: (1) the impressive DSMB’s Interim Safety Analysis Report; and (2) the Phase III Lock-IT 100 unblinded top line results, showing highly statistically significant 72% reduction in the risk of CSRBIs over the current standard of care, Heparin.

THE LPAD PRECEDENT.

In September 2018, Arikayce (INSMED) was the first drug to receive approval under the FDA’s new LPAD regulatory approval process. The LPAD designation enabled INSMED to begin commercializing Arikayce in the United States less than two months after approval. Because Arikayce and Neutrolin share many of the same underlying characteristics, Chew believes Neutrolin to be a serious candidate for the coveted LPAD designation:

• Arikayce is a treatment for patients who had very limited options to combat a life-threatening bacteria-driven lung disease; Neutrolin is now a statistically proven treatment to combat life threatening CRBSIs.

• Arikayce LPAD approval was based on results from INSMED’s then-active Phase III CONVERT study, which met its primary endpoint…with statistical significance; Neutrolin Phase III trial—the largest body of evidence ever generated in hemodialysis patients using a catheter lock system—was halted on the DSMB recommendation and backed by highly statistically significant results.

• Arikayce has FDA Fast Track status and is designated as a Qualified Infectious Disease Product; Neutrolin has FDA Fast Track status and is designated as a Qualified Infectious Disease Product.

AFTER THE MEETING.

CRMD will update the market post-FDA meeting. The following are three outcomes I think possible (with Scenario #2 most likely):

• Scenario #1. The FDA gives CRMD the green light for the use of Neutrolin for hemo, oncology and ICU patients for commercialization. This year.

• Scenario #2. The FDA green lights CRMD’s commercialization of Neutrolin for hemo patients, but will require CRMD to work with the FDA on an additional small scale clinical study (oncology or ICU) to support full approval across all 3 verticals: 1) hemo, 2) oncology and 3) ICU. The FDA requested this of INSMED’s Arikayce as part of the condition for accelerated approval.

• Scenario #3. Complete Doomsday. Nothing gets approved and more trials are required. Unlikely, but worth including (FWIW, I just finished knocking on wood).

OTHER FACTORS TO CONSIDER.

• Major Insider buying last month.

• Elliot Associates, L.P. elevated to Activist Investor status by adding 2,889,430 shares in early January.

• Vanguard Group added 1,000,000 shares.

• Gary Gelbfish relinquishes his seat on the Board. As for a potential replacement? "The Company has identified and is pursuing a number of qualified Board candidates with recognized applicable expertise in drug development and FDA interaction who have indicated they would be disposed to accept an invitation to join the Cormedix Board, with the goal of bringing this process to a successful conclusion in the near future.” Make note of the term ‘near future’.

• All January 10, 2019 SEC filings related to RSU and Stock Option compensation for the Board of Directors (Gary Gelbfish, Janet Dillione, Myron Kaplan, Mehmood Khan Steven Lefkowitz, and Khoso) include RSU & stock option grant language I did not personally see after reviewing 50+ SEC filings from the early part of 2015-2019—a monthly vesting schedule: “These shares consist of RSUs (or Stock Options) granted on 01/10/2019. These restricted stock units will vest monthly with full vesting on the first anniversary of the date of grant, subject to continued service on the board.” If anyone wants to take a look to confirm, that would be great.

RECAP.

• CRMD does not have the infrastructure in place for near-term commercialization.

• CRMD does not have money in place for near-term commercialization.

• CRMD does have the institutional knowledge in place for near-term commercialization.


THE TEA LEAVES AND A HUNCH.

• Neutrolin will be a market disruptor in a billion-dollar industry.

• Neutrolin will likely be the Standard of Care within a very short period.

• The Center of Medicare and Medicaid Services (CMS) ESRD Prospective Payment System. Per Khoso, Medicaid may likely cover Neutrolin—if approved by the FDA—beginning as early as Jan 1, 2020.

• Six months ago, Cormedix delivered a shot across Big Pharma’s bow with the DSMB’s Interim Safety Analysis Report.


• Last week, CRMD delivered a second, larger volley in the form of Unblinded data demonstrating a highly statistically significant 72% reduction in the risk of CSRBIs over the current standard of care, Heparin. You know, the stuff Big Pharma makes billions selling.

• Big Pharma is undoubtedly aware of CRMD’s limitations with respect to infrastructure and capital.

• Big Pharma is also undoubtedly aware that Neutrolin represents an existential threat to the status quo; that is to say, their status quo.

Buyout or partnership, IMO. Soon.

SOURCES.

•https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM610498.pdf.
•http://investor.insmed.com/news-releases/news-release-details/insmed-announces-fda-approval-arikaycer-amikacin-liposome.
•Magic 8-Ball.