Randy Milby - CEO Harry O'Grady - CFO Tony Pfaffle - Chief Scientific Officer

Greetings and welcome to the CorMedix Third Quarter 2014 Results Conference Call. At this time all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions) As a reminder this conference is being recorded. I would now like to turn the conference over to the CEO of CorMedix Randy Milby. Thank you sir, please go ahead.

Good morning and welcome to the CorMedix, third quarter 2014 conference call. I will begin by providing you with an update on our commercial strategy and operational progress. Then Harry O'Grady our CFO, who is with me today in New Jersey, will provide a more detailed summary of our financial results. First I want to remind you that this conference call may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risk and uncertainties. All statements other than statements of historical facts regarding management's expectations, beliefs, goals, plans or the Company's prospects, future financial position, future revenues and projected cost should be considered forward-looking. Our actual results may differ materially from these projections or estimates due to a variety of important factors including uncertainties related to clinical development, regulatory approvals and commercialization. These risks are described in greater detail in CorMedix's filing with the SEC, copies of which are available free-of-charge at the SEC's Web site at www.sec.gov or on request from CorMedix. CorMedix may not actually achieve the goals or plans described in these forward-looking statements and investors should not place undue reliance on these statements. Please note that CorMedix does not intend to update these forward-looking statements except as required by law. As many of you on this call know, CorMedix is a specialty pharmaceutical and biomedical device company focused on developing and commercializing therapeutic products for the treatment of infectious disease in both acute and chronic care settings. Our first commercial product being marketed outside of U.S. is Neutrolin, which is used to prevent central venous catheter or central line-associated bloodstream infections and thrombosis. There are over 15 million central venous catheter patient days in the U.S. alone. Neutrolin contains taurolidine, a potent broad spectrum, anti-infective…

Thank you Randy and thank you all, for joining us today. I would like to now review the financial information filed yesterday on our Form 10-Q. As mentioned on our last call we expect our cash current to increase as we begin our commercialization of Neutrolin. As a result we ended the third quarter with a cash balance of approximately of $5.9 million. I would like to now review our operating results and financial statements. For the quarter ended September 30 2014 we recorded a loss of $5 million. Of this amount $3.3 million were non-cash items, $200,000 for stock based compensation, $600,000 was a loss related to the revaluation of derivate liabilities and 2.5 million losses on the modification of equity investments related with derivative attributes. As you may have read, on September 15, 2014, we entered into consent and exchange agreements with the investors following certain classes of our securities that had features that required derivative liability accounting treatment. Pursuant to those agreements, the Company and the investors agreed to amend these safety securities to remove anti-dilution, price reset, cash settlement features and certain change of control provisions that caused those instruments to be classified as derivative liabilities. The details of the terms of these transactions are available on our 10-Q and our other public filings. As a result of these modifications, all of the outstanding derivative liabilities were E classified equity. We do not anticipate any further charges through our P&L related to these derivative liabilities going forward. Please keep in mind that while these accounting treatment [indiscernible] income statement this quarter, they are not cash expenses and do not impact our ability to fund operations. As Randy noted, we have just started our commercial operations. Sales in the third quarter were approximately $52,000 and cost of…

Operator, now we can open the conference call to questions.

All right, sir. (Operator Instructions) Our first question comes from the line of Doug [indiscernible] who is a Private Investor. Please proceed with your question.

I had a couple of questions, if you could provide a little bit of color for me. Where are we at on the filing dates with regards to a fast track and a QIDP?

The question that Doug asked is just on the filing date for the QIDP which as I mentioned is under the GAIN act. So that -- we couldn't actually submit that until after the IND has been approved. We took -- it was a step-wise approach. So we filed for fast track first and then we're in the process of preparing to initiate for the QIDP.

You guys may also -- fast track's been filed, is that correct?

Yes, fast track has been filed. We did it sequentially, fast track first and then initiating the QIDP process.

Can you give me some kind of ballpark on the QIDP?

From the timing of submission?

Yes sir.

Randy its Tony. You want me to comment on that. Okay I know that Doug, there's been lots of questions and lots of speculation about QIDP and everyone seems to think that if it's not done like 24 hours, hence it's not going to get done or there is some looming problem or issue that that's completely full .So everything is and I think you've seen on the regulatory basis, we checked the boxes methodically and then once we submit them and we get approvals. We want to continue to do that in a humble and thorough way, Doug. So you might expect that we are feverishly working, we got the fast track application in. We had contributions from the all the members of the regulatory team and our lawyers, very complete. So although the agency will make its own decision, we think it's a very robust application. Same thing with QIDP. All the people have been lined up, the statute has been completely reviewed. We've checked all the boxes. It’s not like the IND and fast track. It's more going through the process of teaming the FDA and speaking to a variety of people at the agency who are responsible for granting the QIDP. That process has already been initiated. There is a pay per SAR application, which is in the process. So drafts are being written. When we are ready to submit it, we will submit it, but we don't want to submit an incomplete application. The review process for fast track and QIDP is around 30 to 60 days. So both of them could theoretically come in before the end of the year. It'd be a nice holiday gift around Christmas Hanukah period. At the end of the day we can't guarantee that absolutely, but we are working towards those ends. And you have to believe us, we've delivered [indiscernible] on the regulatory front. You have to believe us that these things have been -- fast track, has been filed as Randy has announced and we're moving forward in working with the QIDP with our regulatory attorneys who are very experienced and we are going to do it the right way. So we hope for the right result which is a positive one.

Thank you, Tony.

Yes, first of all, I would have directed that to Tony. I didn't know he was on the call. Tony thanks and yes, there is any [indiscernible]. I was just trying to get a little bit of idea, it's good to know that the fast track has been filed and I prefer you to do it right and appropriately than fast and wrong. So no pressure on this and just want to give an update on that. I'll direct my next question if possible and I will just get out of the way and let somebody else on. Either Tony or Randy, when do you think we are going to be -- will be at the completion of the Neutrolin usage monitoring program.

Randy, why don't you take it?

So what we have right now is we have 175 patients in the program. It's actually staged. So they stay and we have 36 -- 36 patients had completed and what we'll do is it will flow out over through the rest of this year and into the first quarter based upon the number of patients were enrolled in a program. But what we're going to do and Tony is already working with this and this is why we had a little highlight of the symposium last night at the -- at the American Society of Nephrology was the top line of results. So when we will be able to have full completion and present all the results, most likely we are anticipating in the third quarter of 2015, possibly fourth quarter. We're still doing a lot of dicing and slicing of the information.

An then one last -- has there been any events or anything with regards to, I believe its CRMD004, the gel formulation?

Tony why don't you address that?. Tony leads the effort on the gel, thixotropic gel.

Yes, there has -- very good question, Doug. And there has been -- we have a -- just like we have a committee for CRMD003 the solution, we have a committee for the gel as well, which includes a variety of experts both in infectious disease and formulation and we are moving forward on that front. So as we make tangible progress, Randy will huddle with me and then we'll press release it but the answer is there is significant activity moving that forward.

Thank you. And we will hold for one more moment to see if there is any further question. [Operator Instructions]. Our next question comes from the line of Ben Reed with Dawson James [ph]. Please proceed with your question.

I was hoping if you could just explain briefly on layman's terms, why you think your property rights are being infringed and explain your case, why you think it's so strong?

As you know I can address. I'll take first crack at this. The prosal [ph] patent which is the patent that we're referring to here was granted in January of last year. And with our council we’ve obviously felt that they have a product on the market it has the same three components that we do, and with council we look this out. So we've taken the [indiscernible] in violation of our intellectual property.

Okay and then in the same portions or how similar is it yours on the sent to the global.

There actually have four formulations. One is a formulation that's a taurolidine citrate which is the Taurolock. They have a formulation with Taurolock with 100 units of heparin, a formulation Taurolock with 500 units of heparin and then have a Taurolock with urokinase. So our patent stake goes from 25 to 2500 international units of heparin. So as you can see that least for those -- and the Sodemann patent as you recall -- the Sodemann patent was the Taurolock with citrate.

Thank you and our next question comes from line of Joe [indiscernible] with Maxim Group. Please proceed with your question.

Hey guys just a quick question and I think you addressed it a little but may be you could just expand on a little. I know that you were disappointed a little bit in your revenue so far in Europe and I wanted to ask what steps you are taking to try to improve on those numbers.

It’s a great question. What we’ve done is we’re making some changes in our personnel on the ground and the other aspect of this -- I just want reiterate for everyone on the call, you recall that right now the label that we have is for hemodialysis only. So this label expansion which allows us to go into the oncology ICU, CCU total parenteral nutrition will give us a lot more rep when we call on positions in Germany. The same is true for my discussions in the business development slide for potential partners. So it's both the changing in the personnel and changing some of the target that they are going to be targeting from a hemodialysis clinic to little more hospital based ICU as well as the skill sets of the team and we’re doing some training right. Even this week we are doing some training and repositioning the product.

Great and one last question and I imagine that there is only so much you can talk about. But you did say the your kind of weighing your options as far as partnerships go. To the extent that you can, can you kind of a expand on that a little bit in terms of where do you think you have some strong viable options at this point and to the extent that you can maybe just talk about that a little bit.

Sure we’ve had -- as you know on previous calls we voice talked about and we mentioned the number of timings that we have ongoing discussions with companies. One thing that just -- the level of interest increased I would say maybe dramatically once you have the INDs. So once we IND was approved by the FDA, now it seems to be more serious. We’re talking to companies that both on the pharma side and the device side. But in doesn’t -- it's not just dialysis and I want to reiterate for everyone on the call, this is a central venous catheter story. So it could be applicability in dialysis, oncology, ICU, CCU. So as you sit back and think of who is in that type of space consider the number of players that we could having discussion with.

Thank you. And its seems that we have no further questions at this time I’d like to turn the floor back to management for any closing remarks.

Thank you everyone for dialing in today. I think the message that you should walk away with is that A, we’ve made significant progress both in the U.S and are making significant progress in the European Union. The label expansion, the IND being accepted the filing of the fast track are all steps in a right direction. Continue to watch us, continue to monitor us and we’ll continue to deliver on our results and our promises. Thank you very much for dialing in.

Ladies and gentleman this concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.