CorMedix Inc. (CRMD) Q1 2016 Earnings Report, Transcript and Summary

Greetings and welcome to the CorMedix First Quarter 2016 Results Call. At this time, all participants are in a listen-only mode. A 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 your host Mr. Randy Milby, CEO. Thank you. Mr. Milby, you may begin.

Good morning and welcome to the CorMedix first quarter 2016 investor conference call. With me today are Jim Altland, our Interim CFO; Dr. Tony Pfaffle, our CSO; and Jack Armstrong, our Executive Vice President of Technical Operations. They will be available to answer your questions during the Q&A portion of our conference call. 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 risks 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 costs should be considered forward-looking. Forward-looking statements include statements about our clinical development plans and timing, regulatory actions, and cash needs. 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 filings with the SEC, copies of which are available free of charge at the SEC’s website at www.sec.gov, or upon request from CorMedix. CorMedix may not actually achieve the goals or plans described in these forward-looking statements, and investors should not place undue reliance on these statements. Please note that CorMedix does not intend to update these forward-looking statements except as required by law. Thank you for joining us. We are encouraged as to the progress that we have made and hope to continue to drive the company forward, both from the standpoint strategically positioning the Company for long-term success as well as executing tactically in the near-term. As many of you know, CorMedix is the commercial stage company with a truly novel anti-infective solution called Neutrolin, which is proven to prevent dangerous and costly bacterial and fungal bloodstream infections that occur in hospitals in patients with implanted central venous catheters. This includes patients receiving hemodialysis or total parenteral nutrition as well as patients in intensive care units. Critical to Neutrolin’s value proposition is that the active ingredient taurolidine is not an antibiotic. And to date has shown no sign of susceptibility to the various bacterial resistance mechanisms that limit the long-term use of antibiotics and have given rise to a very serious public health concerns about the ability to treat infections effectively. Neutrolin has CE marking and is currently commercialized as a Class 3 medical device in Germany and the Middle East. In the United States, we’re developing Neutrolin as a drug, and our pivotal Phase III clinical study program is currently underway with the expectation that we may submit a new drug application to the FDA in 2017. Looking beyond this initial application to prevent catheter-related bloodstream infections, our clinical plan is to broadly explore the utility of taurolidine as a novel anti-infective. Specifically, we are exploring opportunities to develop in collaborations with third parties anti-microbial medical devices, such as sutures that incorporates taurolidine for use in surgical and dermatological settings. We’re also evaluating additional therapeutic uses of proprietary formulations of taurolidine including our recently announced agreement with NanoProteagen to explore a novel combination therapy for pediatric neuroblastoma that uses nanoparticle delivery. With that overview, I would now like to go in some detail on several important topics: clinical development, scientific affairs, operations and financials. Our primary focus remains on advancing our U.S. clinical development program in support of the FDA application to approve Neutrolin for marketing in the United States. Our first pivotal Phase III clinical study is underway, called LOCK-IT 100, for catheter lock solution investigational trial. And this study is expected to enroll 632 catheterized hemodialysis patients. The LOCK-IT 100 study continues to enroll patients and add trial sites in line with expectations and we are focused on continuing along this trajectory with a goal of completing enrollment on year-end. The primary objective with this study is to demonstrate a significant reduction in the occurrence of catheter-related bloodstream infections compared to the current standard of care, which is heparin. LOCK-IT is an even driven study. We anticipate doing an interim analysis consistent with the study protocol, once we have enrolled 316 patients for about half the projected total or when we record 81 infection events, which ever of these occurs earlier. We anticipate final study completion in 2017. As we have discussed on previous calls, it’s estimated that there are approximately 127 million catheter days in hemodialysis in the United States per year. The projected unit usage in this market is 0.44 vials per catheter day, or one every two to three days. So there is a substantial market opportunity here if it is supported by the clinical data. We are also in the process of finalizing the details of our second pivotal study for Neutrolin. We expect to commence this second study in the first quarter of 2017 and are working closely with the FDA to establish the most efficient pathway to potential approval. At this time, we're discussing a trial designed to enroll approximately 560 oncology patients, who are receiving total parenteral nutrition. It is estimated there are approximately 90 million catheter days due to treatment of various kinds of cancer, but the projected unit usage as a lock and flush is significantly higher in this market than in hemodialysis due to the frequency of flushes with an average of 3 vials used per catheter day. So the market potential is estimated to be higher by a factor of at least five compared to hemodialysis. As has been previously discussed, we received fast track designation from the FDA for the review of Neutrolin in the prevention of catheter-related bloodstream infections in patients receiving hemodialysis. Fast track designation is intended to encourage the development and expedite the agency’s review of drugs to treat serious conditions and address unmet medical needs. So, naturally we are encouraged by this designation and the signal that it sends is through the potential importance of Neutrolin as a prophylactic agent in reducing the rates of infection. Importantly, products designated as fast track are eligible to obtain rolling review of the marketing application and that made lead to an expedited approval. In addition, Neutrolin has been designated a qualified infectious disease product or QIDP, under the Federal GAIN Act, which provides incentives for the development of new anti-microbials. This provides for an additional five years of market exclusivity after the drug approval, beyond the standard five years granted for a new chemical entity. Combined with the possible extension for pediatric use, Neutrolin could benefit from up to 10.5 years of post-approval exclusivity in the United States from the date of launch. If we obtain FDA approval on the basis of these two studies, we plan to conduct a small 200-patient Phase IV study to further elucidate the use of Neutrolin for critical intensive care patients in an effort to further expand the Neutrolin label. We’re looking to capture an estimated $28.5 million catheter days in the ICU/CCU settings in the United States each year. Based on our market research, the highest unit usage per patient is approximately five vials per catheter day, when used as a lock and flush, representing another significant market opportunity. We are committed to maximizing the global market opportunity for Neutrolin, which we believe has tremendous potential to gain rapid acceptance as a new standard of care for preventing catheter-related infections. In context with our clinical development plans, we are evaluating and refining the growing body of clinical and post marketing data that support the use of Neutrolin to prevent catheter-related bloodstream infections. In our Neutrolin Usage Monitoring Program, which was a post-marketing surveillance survey conducted at sites in Germany and completed last year, Neutrolin showed greater than 96% reduction in infection and thrombosis, compared to the current benchmark. These data suggest that Neutrolin could address the unmet need for reducing hospital infection rates and improving patient care. Importantly, the data highlight the potential for Neutrolin to reduce hospital cost stemming from having to treat these infections. Although, this observational study was not powered to show physical significance against the competitor, we believe that provides important clinical used evidence demonstrating the anti-infective and anti-clotting value of Neutrolin. And this will enhance our ability to effectively market the product in territories where it’s currently approved. In parallel, these data support our expectation for favorable outcome in our current U.S. Phase III study. To that end we tend to use – we intend to use the NUMP data, as part of our safety package that we will submit to the FDA. In order to further engage the global medical community regarding the value of Neutrolin, we have been invited to present the NUMP data at several peer-reviewed medical and scientific conferences. In April, we presented at the National Kidney Foundation’s 2016 Spring Clinical Meetings and our results will be published in the American Journal of Kidney Diseases. Just this past week, we presented the 1st Gulf Congress of Clinical Microbiology and Infectious Diseases. Upcoming, we’ll give an oral presentation at the 53rd Joint Congress of the European Renal Association and European Dialysis and Transplant Association. We've also been accepted to present a poster at the International Society for Pharmacoeconomics and Outcomes Research Annual Meeting. And with new data highlighting the clinical and economic burden of catheter-related blood stream infections in the ICU. This study supports the pharmacoeconomics benefits of using Neutrolin to prevent infections and reduce hospital costs. We expect to continue presenting these and other findings at various scientific and medical forums throughout 2016. As I mentioned in the company overview, we announced this morning, an agreement with NanoProteagen, a company focused on developing nanoparticle-based therapeutics. Under this agreement, we’ll work them to use their proprietary NanoPro technology to explore a novel combination therapy consisting of CRMD-005, our proprietary formulation of taurolidine and vincristine, a standard of care cytotoxic chemotherapeutic agent to a neural blastoma tumor. Pediatric neuroblastoma is a pediatric orphan disease with an underserved need. We pursue this collaboration based on published studies, highlighting a potential synergy of taurolidine with cytotoxic agents against neuroblastoma and other tumors, as well as the added potential for nanoparticle delivery to selectively target tumor cells. Therefore we believe combining CRMD-005, our proprietary formulation of taurolidine and vincristine with the nanoparticle delivery, may result in a highly valuable therapy for this pediatric orphan disease. We look forward to conducting the feasibility studies and to potentially advancing a therapeutic candidate for further study. Importantly, CorMedix was also granted an exclusive option to obtain a worldwide license to the technology developed under the current agreements, representing an exciting clinical opportunity for CorMedix, if the feasibility outcomes are favorable. Finally, we continue to evaluate opportunities to explore the effective use of proprietary formulations of taurolidine and other new areas of treatment and prevention. We have done early stage clinical work to demonstrate proof-of-concept for using taurolidine in certain medical device settings and have been diligent in protecting our intellectual property for these new endeavors. As such, we have filed a number of provisional patents in four areas: antimicrobial sutures, nanofiber webs, wound management, osteoarthritis and visco-supplementation, as well as the drug delivery. We’re incorporating proprietary formulation of taurolidine into these materials could prevent infection and reduce inflammation. To give you some examples, so you have a sense of these potential applications. There is a clear need to protect against surgical-site infections upon closure with sutures, based upon post-operative infection rates. In April, Dr. Paul Lorenc, a world-renowned, board certified aesthetic plastic surgeon from Cornell, presented at the ASAPS Aesthetic Meeting 2016, highlighting the in vitro efficacy of suture materials incorporated with taurolidine, against clinically significant microorganisms. We believe these initial studies provide evidence that a proprietary formulation of taurolidine could offer benefits not available in currently markets antimicrobial sutures. We also believe that the nanofiber webs used for absorbable mesh products could benefit from taurolidine’s demonstrated effect in reducing inflammation and promoting infection control. Taurolidine also could be incorporated into the fibers or hydrogels in connection with wound management, especially in the case of severe wounds that have occurred in less sterile environments or in burn patients. Lastly, incorporating taurolidine into formulations for osteoarthritis and visco-supplementation may be useful in light of taurolidine’s anti-inflammatory and anti-infective properties. In summary, I am very pleased with our continued progress during this past quarter on the development front. Before moving on to discuss our financial and commercial highlights, I want to also mention that earlier this month we strengthened our Board of Directors with the appointment of Myron Kaplan, a 40-year legal and business veteran, whose wide range of expertise will help guide CorMedix across all of our development and commercial efforts. He brings his extensive experience having represented hedge funds in public and private businesses at the legal counsel and through his service as a Board of Director for public, private and nonprofit organizations. On behalf of the Board, let me welcome him one more time to the CorMedix team. I’m going to provide a detailed financial summary in a few minutes. But for now I just want to emphasize that the company is on solid financial footing with approximately $30.2 million in cash and short-term investments on our balance sheet as of March 31, 2016. This position enables us to confidently continue with the contemplated clinical work including the ongoing Phase III study in hemodialysis patients. We currently have 36.1 million shares in common stock outstanding, on a fully diluted basis, we have 15 million shares including those subject to issuance to warrant options, and convertible notes. Let me now address briefly our ongoing efforts to increase overseas sales of Neutrolin. We continue to add regional sales and marketing partner selectively focusing mainly on the Middle East, where we are making solid progress in Saudi Arabia, Bahrain, Qatar, Kuwait, United Arab Emirates and several other countries. Working with our partners, we’ve successfully registered the product and are submitting government tenders in accordant with local bid process which can appear cumbersome to the uninitiated, it can be very important part of our product franchise over the long-term. In operations, we’re implementing a multi-faceted cost reduction program designed to significantly reduce the cost of taurolidine manufacturing by up to 65% by the time we launched in the United States. Our goal for developing and instituting these changes is to have a high quality regulatory filing for the U.S. NDA. The American market opportunity appears robust. Based upon the number of total patient catheter days and infection prevalence, we believe there’s a real need for this product and a high level of receptivity among the physicians to using it. In fact, we think Neutrolin could approach $1 billion opportunity. As many of you know, the market potential for a product often is not characterized or presented as a single opportunity, and Neutrolin is no exception. As there are clear needs involving patients in hemodialysis, oncology, and critical and intensive care. As our clinical trial work advances, we expect to evaluate these various opportunities further by assessing physician interest and reimbursement prospects in light of CMS guidelines and the quality metrics established under the Affordable Care Act. To that end, we presented two health economic abstracts at the American Society of Nephrology, and we’ve a third health economic study, which has been accepted for publication in a peer-reviewed critical care journal. We also have pharmocoeconomic study underway to assess the economic impact of a central venous catheter infection in oncology patients. As noted in last quarter’s conference call, CMS released their in-stage renal disease prospective payment system final rule, which suggested that the agency is open to considering alternative reimbursement schemes for prophylactic anti-infective products such as Neutrolin, that have been designated as priorities by the FDA under the GAIN Act or the Qualified Infectious Disease Product Act. We also have had constructive discussion with CMS officials considering the pharmacoeconomics endpoints incorporated into the Phase 3 study. In summary, this quarter has been another important period of advancement for the company. Our LOCK-IT 100 clinical study continues to attract favorably compared to our enrollment projections, and we are moving closer to finalizing the second pivotal study for Neutrolin. Successful and timely execution in our pivotal program and the potential FDA approval of Neutrolin represent the most significant value drivers for CorMedix. And that's why it remains our number one priority. In parallel, we continue to collaborate with regional marketing partners in order to further expand the availability of Neutrolin to patients in additional countries in particular the Middle East, where we continue to see increased acceptance. We have submitted two orphan drug applications, the first for pediatric patients for the central venous catheter and the second for pediatric neuroblastoma. We’ve continued and will continue to present data from health economics and clinical utility studies that articulate the value of Neutrolin to key audiences. We are continuing to assert our intellectual property rights in the context of patent infringement and unfair competition law claims brought in Germany. We are also making great progress in executing our plan to reduce our cost of goods for Neutrolin. In short, we believe we are in a stronger position than ever to capture value for Neutrolin over the near and long-term and we look forward to our next update. Before we move to Q&A, I would like to review the financial information that was filed today with the SEC on the company’s 10-Q. For the quarter ended March 31, 2016, CorMedix recorded a loss of $4,231,000 or $0.12 per share versus $5,531,000 or $0.23 per share in 2015. The improvement in loss per share was primarily due to an increase of over 12,091,000 shares in the number of weighted average common shares outstanding basic and diluted. In 2016, the company had higher R&D and SG&A expenses up $325,000. In the first quarter of 2015, there was a non-cash charge of $1,583,000 for backstop agreement and other expenses. For the first quarter of 2016, the company used cash in operations of $5,451,000 versus $2,348,000 in 2015. The company raised $149,000 from the sale of stock and received $117,000 on the exercise of stock options. The company had approximately $30.2 million of cash and short-term investments on the balance sheet at the end of the first quarter, and at the end of the fourth quarter of 2015, the company had $35.4 million of cash and short-term investments. Before I turn the call back to the operator for your questions, I want to address a couple of the most commonly asked questions that have been raised by investors in the past week. Question one, how is a Phase trial enrollment progressing. While we’re still early enrolling the trial, we are very pleased with the enrollment to-date, both in terms of patients enroll, the number of clinical sites we’ve initiated. We do not plan to provide specific updates on enrollment, but we remain on track. The second common question I receive is, do you have funding to complete the second Phase 3 study and we should rise additional funding. Well, we currently do not have cash efficient to complete the second Phase 3 study. But as a reminder, the anticipated protocol includes a smaller patient population with a shorter duration and we are evaluating various financing options including partnering before initiating the second Phase 3 study. The company has always looked to opportunistically raise capital on the most favorable terms for its shareholders. This is always done judiciously, managing unnecessary delusion against the need for CorMedix to be sufficiently funded to reach the key value inflection point. At the moment, that includes completing our planned pivotal program for Neutrolin in the United States and it is the point of fact that doing so will require more cash than we have available today. Furthermore, the stronger we are financially, the more leverage and flexibility we have in negotiating favorable terms with potential partners. The third question, if the dialysis trial is halted for efficacy, what is the procedure to see if the FDA will approve the drug in a dialysis setting on one Phase 3 study or will they likely wait for the oncology data? The DSMB will take an interim look at the trial once we have either enrolled 316 patients or if seen 81 infections in our Phase 3 trial. At that time, one of three things can occur. We believe that the most likely as if the trial looks good and DSMB says continue the trial, requiring us to continue enrolling up to 632 patients. Given the safety and efficacy, we saw in our Phase 2 trial and the data from our NUMP trial. The second outcome we think is highly unlikely, but the DSMB could stop the trial for safety concerns of utility and meeting the efficacy endpoint. The third potential outcome is that the DSMB stops the trial early because the interim data demonstrates compelling efficacy and it is unethical to continue the randomization of patients to the control arm. CorMedix would then engage in discussions with the FDA to stop the trial early and grant product approval. Such an approval would be for dialysis indication only, thus it would be in our best interest to conduct another clinical trial to expand our label to include oncology TPN and ICU. With an improved product, we could do a series of Phase 3b and Phase 4 trials in those indications. And with that, I’ll turn the call back over to the operator for questions and answers.

Thank you. At this time we will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Ram Selvaraju with Rodman & Renshaw. Please go ahead.

Thank you very much for taking my question. Randy, can you hear me?

Yes, I can Ram.

Okay, So I wanted to get some clarity regarding the interim analysis in the ongoing Phase III trial. You obviously laid out several scenarios for what the interim analysis could effectively lead to. But I just wanted to be clear on what specific information CorMedix expects it will be able to release when the interim analysis has been done. Will you simply indicate whether or not the DSMB has agreed to let the trial continue to completion as planned, or recommend that the trial be stopped early, whether it’s for safety or because of striking efficacy? Or will you provide more granular information at that juncture as to what the result of the interim analysis has been. And then the secondary part of the question is, given where the company currently stands and based on the content of your press release and your commentary earlier today that you may in fact be starting the second Phase III only after you are in possession of interim analysis data from the first study. Would you consider the possibility of effectively going up to the point of getting the data from the interim analysis of the first study before you seek to look to effectively obtain a sufficient capital to fund the second Phase III study, which obviously would be one logical potential way to go. Could you just provide us with some color on those two points please?

Sure Ram, I’ll turn the first question over to Dr. Pfaffle.

Yes. Thank you, Randy. Ram, excellent question. So the DSMB evaluates the data routinely. When we approach the interim analysis point, the DSMB will review it, it will be winded [ph] to us the company. If the DSMB looks at the data as you indicated and shows that the data demonstrates there is a separation in the events between the Neutrolin arm and the comparator arm and the separation is at the level that we’re tracking at based upon our statistical design of 40% separation or better than they would likely advise us to continue with the trial. If the data that the DSMB is evaluating and I’m speaking obviously hypothetically, because I don’t have access to the data were blinded. But if they were, to examine the data and it showed a significantly higher than 40% separation, perhaps approaching that of the European data, which is 96%, which is overwhelmingly favorable separation. If they compared both the study drug and the comparator and found that there was a substantive difference in line with that magnitude, then they could recommend to the company, that the company underlined they reveal that to us and in conjunction we would go to the FDA and ask them for a early approval, which we have statutory rights to requests, if the data is that good based on our Fast Track/QIDP status, we’re eligible for early approval. I hope that answers the first part of your question.

Just a very quick clarification, what do you think is a cutoff point at which the DSMB would say the study needs to be stopped early like what do you think is the basic curve separation level that the DSMB would need to see in order to make that decision, is it 80%, is it 90%, is it 95%?

Ram, I think that, we will leave that up to the DSMB. We obviously communicate with the DSMB and basically they will make that final decision. The ranges, the numbers that you gave our certainly if they approach those levels, I would think and I’m not speaking to the DSMB, they are an independent arm, I would think that they would then come to us and huddle.

Okay, that's very helpful. Thank you. And the second part of the question please.

And the second part of the question as stated in the call today we have enough cash for one year. And we anticipate having the interim analysis in the fourth quarter and don’t anticipate starting the second Phase III, which is still on discussion with the FDA by the way, that has not been finalized and we’re not starting that until the first quarter of 2017.

Okay, thank you.

You're welcome.

Our next question comes from Doug Schwegel, a Private Investor. Please go ahead.

Yes, hi. Good morning. Thanks for taking my call. I got in on the call late. So my questions are redundant, I apologize. I didn't hear anything with regards to that is CEO search. Randy I don’t if you addressed that. Could you provide a little bit of wide in that regard?

Thanks, Doug. So the question Doug asked was about the CEO search. The process remains underway and it’s taking us sometime to find the right person. And I have committed to remaining on the job until we do with the full support of our Board of Directors. Fortunately, CorMedix and I have the luxury of being able to continue operating at full capacity, while the best possible candidate is chosen.

Great. I just wanted to know with regards to you don’t expect there's going to be discontinuity after that not looking as a shareholder, not looking at elbowing you out at all [indiscernible]. But I want to make sure that we're not left at midstream and I certainly recognize that you put your money where your mouth is, and to your best interest as a shareholder also, as far as continuity on that. Should we – could we even expect to see as if you remain in your current position stuff that you might be interested actually you’re out of a dark out period in purchase of the shares of the company as you guide in the past. Could that be a possibility?

That’s really the possibility.

Okay, great. Wanted to – I have several questions here since I came second in the queue, I don’t know how many people are behind me. But could you give us an update a little bit with regards to the gel formulation as far as optimizing the valuation of that particular portion of the asset prior to looking at – doing any partnership deals.

So the question is, just a status on where we are in hydrogels with taurolidine?

Yes, that’s correct, where you’re kind of there. Last time I think we do – you discussed on call that you’re trying to show up some of the intellectual property and possibly some internal trials and things like that. Could you give us a little bit of additional color on that?

Well, the most advanced project in the medical device space Doug is the sutures. And that’s why we presented some of that in vitro data. We’re doing additional work in that space. On the hydrogels, that’s a lot more preliminary. We’ve just commissioned some work just find out what our zone of innovation and that’s testing to see putting it in a hydrogel formulation, what’s the anti-microbial effect. So that’s early work, it’s preclinical work.

Okay. And how far you foresee with regards to the sutures that strategy might be in an optimized position to – in future for any type of financing stuff that might be enough to [indiscernible] second Phase 3 trial. When might you project that? We’d be in a position of optimization to discuss any potential terms with another entity?

From a sutures point of view, which is the most advance, it’s still a little premature to say the timing. I will tell you though that this is a – we believe this is a medical device. There’s a predicate in the marketplace, so it’s 510(k) procedure versus a drug procedure. But it’s little early as far as discussing our potential partners at this point.

Okay. With regards to – anything with regards to, you do still have any types of communications with legacy interest that was presented through Evercore. Do you still have conversations with Evercore – any along those volumes?

We still – the question is our relationship with Evercore. We still have an engagement with Evercore. So that is an active engagement.

Okay, great. When should we expect to hear an update with the clinical trials data for NUMP? And you may have addressed that already, so I apologize.

I'm sorry, an update of…

The NUMP data over in Germany?

Tony, do you want to address that?

Yes. We’re honored that Dr. Christoph Wanner, who is Professor of Medicine at the University of Wurzburg in Germany, and he’s also a Member of the Board of the European Renal Association, he’s going to give an oral presentation in Vienna at the end of the month. This is a big deal for us. We respect Dr. Wanner, but more importantly, he’s universally respected and he’s an awardee of the U.S. National Kidney Foundation, winner of the gold medal for academic achievement and a keynote speaker for many companies, and we’re honor that he's going to be doing the oral presentation on Neutrolin in Vienna at the end of this month. And that was a press released. We're going to have a follow-up once the abstract is on in barcode. And I believe that it will be an auspicious event, and Randy will be attending that event in Vienna.

Okay. Great, thanks so much guys. Keep up the strong work.

Thank you, Doug.

[Operator Instructions] Our next question comes from Mark Freed, a Private Investor. Please go ahead.

Hi, last year at this time in your report there were – there was anticipation that there were would legal action on a couple of issues in Germany and I didn't hear anything about that. Can you update us on that please?

Sure. The question has to do with the legal action in Germany. In particular, you're referring to the unfair competition act in that litigation. We don't have a hearing date set for that right now. The next upcoming which we announced in the queue, what would be the PTO that’s on the patent situation and that hearing will be July of 29 of this year.

Okay. So those are still active, but have been pushed out of it?

They've been pushed out of it, some of it just from scheduling getting the – it’s more on the legal side of getting their layers’ availability. So, but the PTO is pretty much set and that's the July 29 date. And as I mentioned, the unfair competition, I do not have a hearing date yet.

All right, thanks very much.

You’re welcome.

Mr. Milby, there are no further questions at this time. Would you like to make any closing remarks?

We’ll give everybody a few more minutes.

Another question is just presented itself [indiscernible]. Please go ahead.

Yes, sir. Thank you for taking my question. I know revenues are very small so far at this point and I saw that there was a small increase in revenues. I’m wondering if you could give us any additional color as to what country so far involved? What kind of end-user is actually making these purchases? Is the order base so far coming as a reorder from an existing customer and that’s what the increase was from or the investigators or whatever it is? And has the experience with orders so far helped you target in the future, who your best customers might be in international sales? Thank you.

Well, the question has to do with the sales and then really the source of our sales and also who is the driver. The majority of the sales increase and as I mentioned in my comments, the focus right now is down the Middle East given the legal action underway in Germany, we’ve not spent a lot of time and effort there at this point, but we do have a full-time personnel on the ground in the Middle East. The increase – the Middle East is a tender business. So within each country, we use distributors, individual distributors and we’ve identified those distributors is very strong within that country that have a presence in the hospital setting. And as our label includes both hemodialysis as well as ICU and oncology. So we’re seeing the initial uptick within the hemodialysis setting, and now we’re seeing a lot more uptick or more interest in the ICU/CCU setting and we’ve got data that supports that from a pharmacoeconomics point of view. So with that Dr. Pfaffle as well as our personnel on the ground in the Middle East has spent a lot of time with different physicians there and sharing – and they appreciate the value of an update as well that comes out in Germany.

Okay, thank you.

Your next question comes from [indiscernible]. Please go ahead.

Yes, hello. Just two quick questions. Number one, you mentioned fourth quarter interim analysis in your hemodialysis study is that a worst case scenario or could it possibly according to trending come in the earlier quarter. And second question is there any chance of outside grants in any of your respective areas that you discuss. Thank you.

Okay, this is Dr. Pfaffle. Good question. We are planning for the fourth quarter for the analysis. Its all have been driven. So, we are laser focused on the sites and recalibrating, recalculating continuously infection rates. You get an initial infection rate when the site starts and when track it to see if there’s an observer effect et cetera. We have been very disciplined in tracking that information and we believe it will be on track for the fourth quarter. Is it possible that could come early? Yes, but we’re not planning on it coming earlier. We’re saying the fourth quarter. And if it comes earlier, we’ll obviously let everyone know.

And this is Randy for your second question. We’ve particularly focused in the medical device space on we’ve submitted for FBI grants and we submitted into Department of Defense for different applications. So we are looking at grand opportunities in these specific areas.

Thank you.

You’re welcome. Are there any other questions?

Yes. Our next question actually comes again from Ram with Rodman & Renshaw. Please go ahead Ram.

Yes, just a very quick clarification guys regarding the ongoing discussions between you, the FDA regarding the design of the second Phase III trial. Can you give us some clarity as to what specifically remains to be finalized and what has already been decided in these discussions, to whatever extent that you feel comfortable doing so? Thank you.

Absolutely, again, in the context of public disclosure. So I will say that we have obviously started our clinical trial pivotal program Phase III and we have FDA full permission to go ahead. We will also have permission to do the trial in the second indication. What we’re doing now is simply – while we’re conducting the first Phase III, we are replying in where we gain information or informed by the first trial. We’re taking that information and informing the second trial. So that we develop an optimum efficiency not only with the design, which they’ve seen and agreed with, but also with the details of the logistics. So that’s being baked into the study. You have the protocol, which is the roadmap of the trial and the general roadmap has been agreed to. Now, we’re working on the GPS, the implementation of the map into the physical driving of the trial – driving of identifying patient screening and enrolling them. So we’re just dotting the eyes and crossing the tees and we’re also getting some feedback from the agency on some modifications, which would be very positive. So, there’s nothing negative, it’s all positive. It’s all optimizing the design for the second trial. I hope that’s helpful.

Okay, thank you very much. That’s very helpful.

We have another question from Doug Schwegel, a Private Investor. Go ahead.

My question was already previously addressed. Thanks.

Mr. Milby, we’re not showing anymore questions at this time. Just I want to give them a few more minutes or should I turn it back to you for closing remarks?

You can turn it back to me for closing remarks.

Okay then, ladies and gentlemen, at this time Mr. Milby will be making closing remarks for today’s call.

I want to thank everyone for joining us today. And in summary, this quarter has been another important period of advancement for the company. Our LOCK-IT 100 clinical study continues to attract favorably compared to our enrollment projections and we are moving closer to finalizing the second pivotal study for Neutrolin. Successful and timely execution in our pivotal program and potential FDA approval of Neutrolin, represents the most significant value drivers for CorMedix and that’s why it remains our number one priority. We are continuing to collaborate with regional marketing partners, particularly in the Middle East. We have submitted two orphan drug applications: the first in pediatric patients with the central venous catheter, and the second for pediatric neuroblastoma patients, which was a driver for the NanoProteagen deal that we announced today. In short, we believe we’re in a stronger position than ever to capture value for Neutrolin over the year near and long-term and we look forward to our next update. Thank you for joining us.

Ladies and gentlemen, this concludes today’s conference. Thank you for your participation. You may disconnect your lines at this time.