Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You
should read the following discussion and analysis together with our audited consolidated financial statements and the accompanying notes
contained elsewhere in this report. This discussion contains forward-looking statements, within the meaning of Section 27A of Securities
Act, Section 21E of the Exchange Act, and the Private Securities Litigation Reform Act of 1995, including statements regarding our
expected financial condition, business and financing plans. These statements involve risks and uncertainties. Our actual results could
differ materially from the results described in or implied by these forward-looking statements as a result of various factors, including
those discussed below and elsewhere in this Annual Report on Form 10-K, particularly under the heading “Risk Factors.”
Overview
CorMedix
Inc. and our wholly owned subsidiaries (collectively, with our wholly owned subsidiaries, referred to herein as “we,” “us,”
“our” or the “Company”) is a biopharmaceutical company focused on developing and commercializing therapeutic
products for the prevention and treatment of life-threatening diseases and conditions.
Our primary focus is on the
commercialization of our lead product, DefenCath, in the U.S. The name DefenCath is the U.S. proprietary name that was approved by the
FDA.
DefenCath is an antimicrobial
catheter lock solution (“CLS”) (a formulation of taurolidine 13.5 mg/mL, and heparin 1000 USP Units/mL) indicated to reduce
the incidence of catheter-related bloodstream infections (“CRBSI”) in adult patients with kidney failure receiving chronic
hemodialysis through a central venous catheter (“CVC”). It is indicated for use in a limited and specific population of patients.
CRBSIs can lead to treatment delays and increased costs to the healthcare system when they occur due to 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 can address a significant unmet medical need.
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 indicated for use in a limited and specific population of patients. 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, we are currently preparing for the commercial launch of DefenCath.
36
DefenCath is listed in the
Orange Book as having NCE exclusivity (5 years) expiring on November 15, 2028, and the Generating Antibiotic Incentives Now or 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 Qualified Infectious Disease Product (“QIDP”).
We announced on April 26,
2023 that following the submission of a duplicate New Technology Add-On Payment (“NTAP”) application in the fourth quarter
of 2022 to CMS, CMS has subsequently issued the Inpatient Prospective Payment System (“IPPS”) 2024 proposed rule that includes
a NTAP of up to $17,111 per hospital stay for DefenCath. This NTAP represents reimbursement to inpatient facilities of 75% of the anticipated
wholesaler acquisition cost price of $1,170 per 3 mL vial, and an average utilization of 19.5 vials per hospital stay. The final IPPS
rule was published in early August 2023 and confirmed this payment amount in that final rule. This NTAP was conditioned upon the DefenCath
NDA obtaining final FDA approval prior to July 1, 2024. As the NTAP was calculated by CMS based upon an anticipated WAC price of $1,170,
and following FDA approval of the DefenCath NDA, an actual WAC of $249.99 per 3ml vial was established, we anticipate that CMS will revise
the amount of the NTAP payment to reflect the actual WAC price in the next IPPS rulemaking, effective October 1, 2024. Upon the listing
in the compendia of the actual WAC price of $249.99 per 3ml vial, the Company notified CMS of the new lower WAC pricing and recommended
that CMS make an off-cycle adjustment to the NTAP to reflect the current lower WAC pricing amount. CMS subsequently communicated to the
Company that they do not intend to update the NTAP reimbursement amount until the next review cycle in October 2024.
On January 25, 2024, CMS determined
that DefenCath should be classified as a renal dialysis service that is subject to the Medicare end-stage renal disease prospective payment
system ( “ESRD PPS”). The ESRD PPS provides bundled payment for renal dialysis services, but also 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 CMS has confirmed receipt. 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. CMS has confirmed the coding application is
under review. TDAPA reimbursement is calculated based on 100 percent ASP (or 100 percent of wholesale acquisition price or else manufacturers’
list price, respectively, if such data is unavailable). If CMS grants TDAPA and post-TDAPA add-on payment adjustments for DefenCath, collective
payments would be for five years (with such add-on payments applying to all ESRD PPS payments for years three through five). CMS confirmed
to the Company that, assuming a favorable review, CMS is working towards a July 1, 2024 implementation date for TDAPA.
We may pursue additional indications
for DefenCath use as a CLS in populations with unmet medical needs that may also represent potentially significant market opportunities.
While we are continuing to assess these areas, potential future indications may include use as a CLS to reduce CRBSIs in total parenteral
nutrition patients using a central venous catheter and in certain oncology patients using a central venous catheter. In 2024, the company
anticipates discussing with the FDA potential pathways for expanded indications.
We currently have one FDA
approved source for each of our two key APIs for DefenCath, taurolidine and heparin sodium, respectively. With regards to taurolidine,
we have a DMF filed with the FDA. There is a master commercial supply agreement between a third-party manufacturer and us in place from
August 2018. We are currently in the process of identifying and qualifying an alternate third-party manufacturer for taurolidine under
our existing DMF. With respect to heparin sodium API, we have identified an alternate third party supplier and intend to qualify such
supplier under the DefenCath NDA over the next twelve months.
We received FDA approval of
DefenCath with finished dosage production from our European based CMO Rovi Pharma Industrial Services. We believe this CMO has adequate
capacity to produce the volumes needed to meet near term projected demand for the commercial launch of DefenCath.
We previously announced commercial
arrangements with additional finished dosage CMOs, Alcami Corporation and Siegfried Hameln, that provide for the manufacture of commercial
sterile parenteral drug products. The Company anticipates the submission to the FDA of a supplement adding Siegfreid Hameln as an alternate
manufacturing site in the second fiscal quarter of 2024. The Company will also discontinue its relationship with Alcami as a potential
alternate manufacturing site for DefenCath.
We announced on May 1, 2023
that the USPTO allowed our patent application directed to a locking solution composition for treating and reducing infection and flow
reduction in central venous catheters. This application was granted on August 29, 2023 as U.S. Patent No. 11,738,120. Our newly
granted U.S. Patent reflects the unique and proprietary formulation of our product, DefenCath, for which we received FDA approval on November
15, 2023. This patent supplements the coverage of our existing licensed U.S. Patent No. 7,696,182, and has the potential to provide an
additional layer of patent protection for DefenCath through 2042.
As part of the DefenCath approval
letter, the FDA communicated the existence of a required pediatric assessment under the Pediatric Research Equity Act, or PREA. PREA requires
sponsors to conduct pediatric studies for, among other things, NDAs for a new active ingredient, such as taurolidine in DefenCath, unless
a waiver or deferral is obtained from the FDA. A deferral acknowledges that a pediatric assessment is required but permits the applicant
to submit the pediatric assessment after the submission of an NDA. FDA deferred submission of the pediatric study for DefenCath because
the product is ready for approval for use in adults and the pediatric study has not been completed. We are obligated to conduct the study
communicated in the approval letter: an open-label, two-arm (DefenCath vs. standard of care) study to assess safety and time to CRBSI
in subjects from birth to less than 18 years of age with kidney failure receiving hemodialysis via a central venous catheter. Because
this is a required post-marketing study, we must make annual reports to the FDA. Pediatric studies for an approved product conducted under
PREA may qualify for pediatric exclusivity, which, if granted, provides an additional six months of exclusivity that attaches to the end
of existing marketing exclusivity and patent periods for DefenCath. Depending on the timing of final report submission, DefenCath could
potentially receive a total marketing exclusivity period of 10.5 years. However, there are factors that could affect whether this exclusivity
is received or the duration of exclusivity, and DefenCath may or may not ultimately be eligible for the additional 0.5 years of exclusivity
associated with this pediatric study.
37
Neutrolin was previously sold
in the EU and other territories where we received CE-Mark approval for the commercial distribution of Neutrolin as a CLS. The Company
has elected to discontinue sales of Neutrolin for lack of commercial viability. The winding down of our operations in the EU is nearly
complete and Neutrolin sales in both the EU and the Middle East have been discontinued since 2022.
In addition to DefenCath,
we have sponsored a pre-clinical research collaboration for the use of taurolidine as a possible treatment for rare pediatric tumors.
In February 2018, the FDA granted orphan drug designation to taurolidine for the treatment of neuroblastoma in children. We may seek one
or more strategic partners or other sources of capital to help us develop and commercialize taurolidine for the treatment of neuroblastoma
in children.
Financial
Operations Overview
Revenue
We
have not generated substantial revenue since our inception. Through December 31, 2023, we have funded our operations primarily through
debt and equity financings.
Research
and Development Expense
Research and development,
or R&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; (vi) activities relating to regulatory filings and
pre-clinical studies and clinical trials; (vii) facilities and other allocated expenses, which include direct and allocated expenses for
rent, facility maintenance, as well as laboratory and other supplies; and (viii) manufacturing-related costs, including previously expensed
pre-NDA approval inventory amounting to approximately $6,400,000. All R&D is expensed as incurred.
The
process of conducting pre-clinical studies and clinical trials necessary to obtain regulatory approval is costly and time consuming.
The probability of success for each product candidate and clinical trial may be affected by a variety of factors, including, among others,
the quality of the product candidate’s early clinical data, investment in the program, competition, manufacturing capabilities
and commercial viability. As a result of the uncertainties associated with clinical trial enrollments and the risks inherent in the development
process, we are unable to determine the duration and completion costs of future clinical stages of our product candidates or when, or
to what extent, we will generate revenues from the commercialization and sale of any of our future product candidates.
Development
timelines, probability of success and development costs vary widely. We are currently focused on the commercialization of DefenCath in
the U.S.
Selling,
General and Administrative Expense
Selling,
general and administrative, or SG&A, expense includes costs related to commercial personnel, medical education professionals, marketing
and advertising, salaries and other related costs, including stock-based compensation expense, for persons serving in our executive,
sales, finance and accounting functions. Other SG&A expense includes facility-related costs not included in R&D expense, promotional
expenses, costs associated with industry and trade shows, and professional fees for legal services and accounting services.
Foreign
Currency Exchange Transaction Gain (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). The intercompany
loans outstanding between our Company based in New Jersey and our subsidiary based in Germany are not expected to be repaid in the foreseeable
future and the nature of the funding advanced is 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).
38
Interest
Income
Interest
income consists of interest earned on our cash equivalents and short-term investments.
Interest
Expense
Interest
expense consists of interest incurred on financing of expenditures.
Results
of Operations
Comparison
of the Years Ended December 31, 2023 and 2022
The
following is a tabular presentation of our consolidated operating results for the years ended December 31, 2023 and 2022 (in thousands):
2023 2022 % of Change Increase (Decrease)
Cost of sales - (4 ) (100 )%
Operating Expenses:
Foreign exchange transaction (loss) income (29 ) 37 (178 )%
Interest expense (34 ) (26 ) 29 %
Other comprehensive gain (loss) 11 (4 ) (359 )%
Revenue.
Revenue for the year ended December 31, 2023 was $0 as compared to $65,000 for the same period in 2022, attributable to the winding
down of our operations in the EU and the discontinuance of Neutrolin sales in both the EU and the Middle East.
Cost
of Sales. Cost of sales for the year ended December 31, 2023 was $0 as compared to $4,000 for the same period in 2022, attributable
to the winding down of our operations in the EU and the discontinuance of Neutrolin sales in both the EU and the Middle East.
Research
and Development Expense. R&D expense for the year ended December 31, 2023 was $13,155,000, an increase of $2,475,000 from $10,680,000
for the same period in 2022. The increase was driven by an increase in personnel expenses of $1,177,000 as a result of higher R&D
headcount in 2023 as compared to 2022, net increases in costs related to medical affairs activities of $941,000, and an increase in costs
related to the technical and quality operations for the manufacturing of DefenCath prior to its marketing approval in November 2023 of
$311,000.
39
Selling, General and Administrative
Expense. SG&A expense for the year ended December 31, 2023 was $35,803,000, an increase of $15,797,000 from $20,006,000 for the
same period in 2022. The increase was primarily attributable to an increase in costs related to market research studies and pre-launch
activities for DefenCath of $12,248,000, and an increase in personnel expenses of $3,693,000 as a result of additional SG&A hires
in 2023 in preparation for the marketing launch of DefenCath. These increases were partially offset, among others of lesser significance,
a decrease in legal fees of $1,120,000.
Interest
Income. Interest income for the year ended December 31, 2023 was $2,682,000, an increase of $2,356,000 from $326,000 for the same
period in 2022. The increase was attributable to higher interest-bearing balances and higher interest rates this year as compared to
the same period last year.
Foreign
Exchange Transaction Income (Loss). Foreign exchange transaction income (losses) for the years ended December 31, 2023 and 2022 were
due to the re-measuring of transactions denominated in a currency other than our functional currency.
Interest Expense. Interest
expense for the year ended December 31, 2023 was $34,000 as compared to $26,000 for the same period in 2022. The increase of $8,000 was
due primarily to higher interest rates on expenses that were financed this year as compared to the same period last year.
Tax Benefit. Tax benefits
for the year ended December 31, 2022 of $586,000, was an income tax benefit due to the sale of our unused NOL for the state fiscal year
2021, which was sold in fiscal year 2022, through the NJEDA Program. There was no tax benefit from the sale of unused net operating losses
for fiscal year 2023.
Other
Comprehensive Income (Loss). Unrealized foreign exchange movements related to long-term loans and the translation of the foreign
affiliate financial statements to U.S. dollars and unrealized movements related to short term investment are recorded in other comprehensive
income (loss) which resulted in a gain of $11,000 and a loss $(4,000) for the years ended December 31, 2023 and 2022, respectively.
Liquidity
and Capital Resources
Sources
of Liquidity
As
a result of our R&D and SG&A expenditures and the lack of substantial product sales revenue, our ongoing operations have not
been profitable since our inception. During the year ended December 31, 2023, we received net proceeds of $42,878,000 from the issuance
of 9,000,093 shares of common stock and pre-funded warrants to purchase 2,500,625 shares of common stock in connection with a public
offering. In addition, during the year ended December 31, 2023, we received net proceeds of $12,949,000 from the issuance of 2,977,637
shares of common stock under our at-the-market-issuance sales agreement, or ATM program, as compared to $17,770,000 net proceeds for
the same period in 2022 from the issuance of 4,704,259 shares of common stock. We may need to raise additional capital through various
potential sources, such as equity and/or debt financings, strategic relationships, potential strategic transactions or out-licensing
of our products until profitability is achieved, if ever.
Net
Cash Used in Operating Activities
Net cash used in operating
activities for the year ended December 31, 2023 was $38,409,000 as compared to $24,357,000 in 2022, an increase in net cash use of $14,052,000.
The increase is primarily driven by an increase in net loss of $16,637,000, attributable to a net increase in operating expenses of $18,272,000,
primarily due to increased pre-launch commercial activities for DefenCath.
Net Cash Used in Investing Activities
Cash
used in investing activities for the year ended December 31, 2023 was $17,062,000 as compared to $3,709,000 of cash provided in the same
period in 2022. The net cash used during the year ended December 31, 2023, was mainly driven by the higher amount invested in short-term
investments as compared to the same period in 2022.
40
Net
Cash Provided by Financing Activities
Net
cash provided by financing activities for the year ended December 31, 2023 was $55,917,000 as compared to $17,898,000 for the same period
in 2022, an increase of $38,019,000, primarily attributable to net proceeds we received from the sale of our common stock and pre-funded
warrants in the public offering during 2023. Additionally, during the year ended December 31, 2023, we generated net proceeds of $12,949,000
from the sale of our common stock in our ATM program, as compared to $17,770,000 in the same period last year.
Funding
Requirements and Liquidity
Our total cash and cash equivalents and short-term
investments as of December 31, 2023 and 2022, excluding restricted cash of $181,000 and $226,000, respectively, was $76,031,000 and $58,792,000,
respectively. During the year ended December 31, 2023, we realized net proceeds of $42,878,000 of net proceeds from the public offering
and exercise of the underwriters’ option and an aggregate of $12,949,000 of net proceeds from the issuance of 2,977,637 shares of
common stock under our ATM program. As of December 31, 2023, we have $104,400,000 available under our shelf registration statement filed
in August 2021 for the issuance of equity, debt or equity-linked securities.
Because
our business has not generated positive operating cash flow and if we do not raise significant revenue, we may need to raise additional
capital in order to continue to fund our research and development activities, as well as to fund operations generally. Our continued
operations are focused on the commercial launch of DefenCath and we can provide no assurances that financing or strategic relationships
will be available on acceptable terms, or at all, if additional funds are needed.
We expect to continue to fund
operations from cash on hand and through capital raising sources as previously described, which may be dilutive to existing stockholders,
through revenues from the licensing of our products, or through strategic alliances. We may seek to sell additional equity or debt securities
through one or more discrete transactions, or enter into a strategic alliance arrangement, but can provide no assurances that any such
financing or strategic alliance arrangement will be available on acceptable terms, or at all. Moreover, the incurrence of indebtedness
would result in increased fixed obligations and could contain covenants that would restrict our operations. Raising additional funds through
strategic alliance arrangements with third parties may require significant time to complete and could force us to relinquish valuable
rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not
be favorable to us or our stockholders. Our actual cash requirements may vary materially from those now planned due to a number of factors,
including any change in the timing of the commercial launch of DefenCath or the focus and direction of our research and development programs,
any acquisition or pursuit of development of new product candidates, competitive and technical advances, the costs of commercializing
any of our product candidates, and costs of filing, prosecuting, defending and enforcing any patent claims and any other intellectual
property rights.
We
expect to generate product sales for DefenCath in the U.S. In the absence of significant revenue, we are likely to continue generating
operating cash flow deficits. We will continue to use cash as we increase other activities leading to the commercialization of DefenCath,
pursue business development activities, and incur additional legal costs to defend our intellectual property.
We currently estimate that
as of December 31, 2023, we have sufficient cash, cash equivalents and short-term investments to fund operations for at least twelve months
from the issuance of this Annual Report on Form 10-K, and will enable us to fund the launch of DefenCath through to anticipated profitability.
These estimates are based upon the assumption of commercial launch in the second quarter of 2024, and other base case assumptions for
market penetration, average selling price, R&D expense and commercial infrastructure cost. Additional financing may be needed to build
out our commercial infrastructure and to continue our operations. If we are unable to raise additional funds when needed, we may be forced
to slow or discontinue the commercial launch of DefenCath. We may also be required to delay, scale back or eliminate some or all of our
research and development programs. Each of these alternatives would likely have a material adverse effect on our business.
41
Contractual
Obligations
We
entered into a seven-year operating lease agreement in March 2020 for an office space at 300 Connell Drive, Berkeley Heights, New Jersey
07922. The lease agreement, with a monthly average cost of approximately $17,000, commenced on September 16, 2020.
Critical
Accounting Estimates
Our management’s discussion and analysis of our financial condition
and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles
generally accepted in the United States, or GAAP. The preparation of these consolidated financial statements requires us to make estimates
and judgments that affect the reported amounts of assets, liabilities and expenses. On an ongoing basis, we evaluate these estimates and
judgments. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under
the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results and experiences may differ materially from these estimates. Our significant
accounting policies are more fully described in Note 3 to our financial statements included with this report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
N/A.
Item 8. Financial Statements and Supplementary Data
The
information required by this Item 8 is included in Part IV, Item 15, and is incorporated by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
As
of the end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) (the “Exchange
Act”). Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure
controls and procedures are effective to ensure that information required to be disclosed by us in the reports we file or submit under
the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC,
and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial
Officer, to allow timely decisions regarding required disclosures.
Changes
in Internal Control Over Financial Reporting
There
were no changes in our internal control over financial reporting during our year ended December 31, 2023, or in other factors that could
significantly affect these controls, that materially affected, or are reasonably likely to materially affect, our internal control over
financial reporting.
42
Management’s
Annual Report on Internal Controls Over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment
of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control
over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers
and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the consolidated financial statements in accordance with U.S. generally accepted accounting
principles.
Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of the consolidated financial statements in accordance with generally
accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management
and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the consolidated financial statements.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.
In
connection with the preparation of our annual consolidated financial statements, management, including, our Principal Executive and Financial
Officer, has undertaken an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023,
based on the criterial established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (“COSO”). Management’s assessment included an evaluation of the design of our internal control
over financial reporting and testing of the operational effectiveness of those controls.
Based
on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31,
2023.
Item
9B. Other Information
Not
applicable.
Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not
applicable.
43
PART
III
Item 10.
Directors, Executive Officers, and Corporate Governance
We
have adopted a written Code of Conduct and Ethics that applies to our directors, executive officers and all employees. We intend to disclose
any amendments to, or waivers from, our code of ethics and business conduct that are required to be publicly disclosed pursuant to rules
of the SEC by filing such amendment or waiver with the SEC. This code of ethics and business conduct can be found in the “Investors
- Corporate Governance” section of our website, www.cormedix.com.
Directors
The
following table sets forth the name, age and position of each of our directors as of February 15, 2024:
Name Age Director Since Position(s) with CorMedix
Joseph Todisco 48 March 2022 Director and Chief Executive Officer
Janet Dillione 64 August 2015 Director
Gregory Duncan 59 November 2020 Director
Alan W. Dunton 69 March 2019 Director
Myron Kaplan 78 April 2016 Director and Chairman of the Board
Steven Lefkowitz 67 June 2017 Director
Robert Stewart 55 April 2023 Director
Joseph Todisco
became a director of CorMedix in March 2022. He was a senior executive at Amneal Pharmaceuticals for 11 years prior to joining CorMedix.
He held various roles at Amneal Pharmaceuticals, most recently as Executive Vice President, Chief Commercial Officer where he was responsible
for Amneal Specialty, a growing branded products business. During his tenure at Amneal, Mr. Todisco held roles overseeing corporate development
and international operations, leading commercial teams in several international markets including the UK, Australia and Germany, as well
as leading Amneal’s merger integration with Impax Laboratories in 2018. He was previously Co-Founder and managing executive of Gemini
Laboratories, a specialty pharmaceutical company focused on the sales and marketing for niche branded products in the US Market. Gemini
Laboratories was established as an affiliate of Amneal Pharmaceuticals and was subsequently acquired by Amneal in 2018. Prior to joining
Amneal, Mr. Todisco was Vice President, Business Development & Licensing at Ranbaxy, Inc. where he was responsible for developing
and executing Ranbaxy’s North American commercial business strategy. Prior to Ranbaxy, he held various roles at Par Pharmaceutical,
and in his earlier career held positions at Oppenheimer & Company and Marsh & McLennan Companies. Mr. Todisco obtained his MBA
in finance from Fordham Graduate School of Business and his BA in Economics from Georgetown University. Among other qualifications, attributes
and skills, Mr. Todisco’s business expertise and significant executive management experience in the pharmaceutical industry led
to the conclusion of our Board that he should serve as a director of our Company in light of our business and structure.
Janet
Dillione has been a director of CorMedix since August 2015. Since November 2020, Ms. Dillione has served as the Chief Executive
Officer of Connect America, a nationally recognized leader in comprehensive telehealth and remote patient monitoring solutions. Prior
to joining Connect America and starting in May 2014, she served as Chief Executive Officer of Bernoulli Enterprise, Inc., a real-time
connected healthcare information technology company. Previously, she was at Nuance Communications, Inc., a leading provider of voice
and language solutions for businesses and consumers around the world, having joined Nuance in April 2010 as Executive Vice President
and General Manager of the Healthcare Division and serving as an executive officer from March 2010 until May 2014. From June 2000 to
March 2010, Ms. Dillione held several senior level management positions at Siemens Medical Solutions, a global leader in medical imaging,
laboratory diagnostics, and healthcare information technology, including President and CEO of the global healthcare IT division. Ms.
Dillione currently serves as a director of Vizient, Inc., a private health care performance improvement company. Ms. Dillione received
her B.A. from Brown University in 1981 and completed the Executive Program at The Wharton School of Business of the University of Pennsylvania
in 1998. She has over 25 years of experience leading global teams in the development and delivery of healthcare technology and services.
Among other qualifications, attributes and skills, Ms. Dillione’s financial and IT expertise and significant executive management
experience with medical device and healthcare companies led to the conclusion of our Board that she should serve as a director of our
Company in light of our business and structure.
44
Gregory
Duncan has been a director of CorMedix since November 2020. Mr. Duncan currently serves as the Chairman and CEO of Virios Therapeutics,
a clinical-stage biopharmaceutical company developing and commercializing innovative antiviral therapies to treat diseases associated
with a viral triggered abnormal immune response, such as fibromyalgia (FM), and has served since April 2020. From 2014 and prior to joining
his current company, Mr. Duncan served as President and CEO of Celtaxsys, a privately held biotechnology company focused on cystic fibrosis
and other rare, inflammatory diseases. Mr. Duncan has spent the majority of his career in senior leadership roles in commercial stage
pharmaceutical companies. From 2007 to 2013, he served as a senior executive at UCB, including as President of its North America business,
as well as an executive committee member. Prior to his roles with UCB, Mr. Duncan spent approximately 17 years at Pfizer where he gained
significant experience across sales and marketing functions including serving as SVP of US Marketing and later as President of Pfizer’s
Latin America business from 2005 to 2007. Mr. Duncan received his undergraduate degree from the State University of New York, Albany,
and earned an MBA degree from Emory University. Among other experience, qualifications, attributes and skills, Mr. Duncan’s significant
depth of experience in the pharmaceutical industry led to the conclusion of our Board that he should serve as a director of our Company
in light of our business and structure.
Alan
W. Dunton, M.D. has been a director of CorMedix since March 2019. He is the founder and principal consultant of Danerius,
LLC, a biotechnology and pharmaceutical consulting business which he started in 2006. From 1994, he served in senior positions in Research
and Development in the Pharmaceutical Division of Johnson and Johnson including President and Managing Director of the Janssen, the major
research, development and regulatory arm of the pharmaceuticals division at Johnson & Johnson. From January 2007 through March 2009,
Dr. Dunton served as President and Chief Executive Officer of Panacos Pharmaceuticals, Inc. From November 2015 through March 2018, Dr.
Dunton was the Head/Senior Vice President of Research, Development and Regulatory Affairs of Purdue Pharma L.P., a private pharmaceutical
company. In addition to CorMedix, Dr. Dunton currently serves on the boards of three public companies, as a Director at Palatin Technologies,
Inc. and Oragenics, Inc. he chairs the Compensation Committees of both companies. He also serves as a member of the Audit Committees
of these companies. Additionally, Dr. Dunton is a member of the board of Recce Pharma Ltd., an Australian public biotechnology company
focused on developing novel anti-infectives for serious and life-threatening diseases. Dr. Dunton received his Bachelor of Science degree
in biochemistry, magna cum laude, from State University of New York at Buffalo, and received his M.D. from New York University School
of Medicine. Among other qualifications, Dr. Dunton’s significant depth of experience in the pharmaceutical industry, including
service as a director of public pharmaceutical companies, led to the conclusion of our Board that he should serve as a director of our
Company in light of our business and structure.
Myron
Kaplan became a director of CorMedix in April 2016 and became Chairman of the Board in August 2017. He is a founding partner
of Kleinberg, Kaplan, Wolff & Cohen, P.C., a New York City general practice law firm, where he has practiced corporate and securities
law for more than fifty years. In 2012, Mr. Kaplan became a trustee of the Lehman Brothers Plan Holding Trust. Previously, he served
as a member of the board of directors of SAirGroup Finance (USA) Inc., a subsidiary of SAirGroup that had publicly issued debt securities,
Trans World Airlines, Inc. and Kitty Hawk, Inc. Among his business and civic involvements, Mr. Kaplan currently serves on the boards
of directors of a number of private companies and has been active for many years on the boards of trustees and various board committees
of The Children’s Museum of Manhattan and JBI International (formerly The Jewish Braille Institute of America). Mr. Kaplan graduated
from Columbia College and holds a Juris Doctor from Harvard Law School. Among other experience, qualifications, attributes and skills,
Mr. Kaplan’s experience in a broad range of corporate and securities matters and service as a director of public companies led
to the conclusion of our Board that he should serve as a director of our Company in light of our business and structure.
Steven
Lefkowitz was a director of CorMedix from August 2011 to June 2016. He was reappointed to the Board in June 2017. He also served
as our acting Chief Financial Officer from August 2013 to July 2014. Mr. Lefkowitz has been the President and Founder of Wade Capital
Corporation, a financial advisory services company since June 1990. Mr. Lefkowitz has been a director of both public and private companies.
Mr. Lefkowitz received his A.B. from Dartmouth College in 1977 and his M.B.A. from Columbia University in 1985. Among other experience,
qualifications, attributes and skills, Mr. Lefkowitz’s education, experience and financial expertise led to the conclusion of our
Board that he should serve as a director of our Company in light of our business and structure.
45
Robert
Stewart became a director of CorMedix in April 2023. Mr. Stewart is the current Chief Executive Officer of Theramex, a global
specialty pharmaceutical company dedicated to women’s health, and has served in this role since March 2020. Prior to this, Mr.
Stewart served as Chief Executive Officer of Amneal Pharmaceuticals Inc. from 2018 to 2019, and from 2009 through 2018 Mr. Stewart served
in senior roles with Allergan, formerly Watson and Actavis, most notably as Chief Operating Officer (2015 – 2018) and President,
Global Operations (2009 – 2015). Mr. Stewart has also previously held management roles with Abbott Laboratories, Knoll Pharmaceutical
Company, and Hoffmann La Roche, Inc. Mr. Stewart currently sits on the Board of Directors of Cipla Ltd and serves on the Board of Trustees
for Fairleigh Dickinson University. Mr. Stewart obtained his bachelor’s degree in Finance & Business Management from Fairleigh
Dickinson University. Among other qualifications, Mr. Stewarts significant depth of experience in the pharmaceutical industry, including
service as an executive director of other pharmaceutical companies, led to the conclusion of our Board that he should serve as a director
of our Company in light of our business and structure.
Board
Independence
Our
common stock is listed on the Nasdaq Global Market. Under the rules of Nasdaq, independent directors must comprise a majority of a listed
company’s board of directors. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a
listed company’s audit, compensation and nominating and corporate governance committees be independent. Under the rules of Nasdaq,
a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors,
that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director. Additionally, compensation committee members must not have a relationship with us that is material to the director’s
ability to be independent from management in connection with the duties of a compensation committee member.
Audit
committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act. In order to be considered
independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity
as a member of the audit committee, the board of directors or any other board of directors committee: (i) accept, directly or indirectly,
any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (ii) be an affiliated
person of the listed company or any of its subsidiaries.
Our
Board has undertaken a review of the independence of our directors and has determined that (i) all current directors other than Mr. Todisco
are independent within the meaning of Section 5605(b) of the Nasdaq Marketplace Rules, (ii) all members of our Audit Committee meet the
additional test for independence for audit committee members imposed by SEC regulation and Section 5605(c) of the Nasdaq Marketplace
Rules, (iii) all of the members of our Compensation Committee are independent within the meaning of Section 5605(d) of the Nasdaq Marketplace
Rules, and (iv) all of the members of our Nominating and Governance Committee are independent within the meaning of Section 5605(e) of
the Nasdaq Marketplace Rules.
Board
Committees
Our
Board has established an Audit Committee, a Compensation Committee and a Nominating and Governance Committee. Our Audit Committee currently
consists of Mr. Lefkowitz (Chair), Dr. Dunton and Mr. Duncan. Our Compensation Committee currently consists of Ms. Dillione (Chair),
Dr. Dunton and Mr. Duncan. Our Nominating and Governance Committee currently consists of Mr. Kaplan (Chair), Ms. Dillione, and Mr. Stewart.
The membership of these committees may be changed after our next annual meeting.
Each
of the above-referenced committees operates pursuant to a formal written charter. The charters for each committee, which have been adopted
by our Board, contain a detailed description of the respective committee’s duties and responsibilities and are available on our
website at www.cormedix.com under the “Investor Relations—Corporate Governance” tab.
From time to time, the Board
also conducts business through other duly appointed committees, such as the Strategy Committee, that are established on an ad hoc basis.
The Strategy Committee was formed by the Board to evaluate and oversee certain of the Company’s strategic planning activities. In
2023, the Strategy Committee acted by unanimous written consent on one occasion and held no committee meetings. The Strategy Committee
consists of Steve Lefkowitz, Myron Kaplan and Rob Stewart.
46
Audit
Committee
The
Audit Committee assists the Board in its oversight of our corporate financial statements and reporting and our external audits, including,
among other things, our internal controls and audit functions, the results and scope of the annual audit and other services provided
by our independent registered public accounting firm and our compliance with legal matters that have a significant impact on our financial
statements. The Audit Committee also consults with our management and our independent registered public accounting firm prior to the
presentation of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of our financial affairs.
The Audit Committee is responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters, and for the confidential, anonymous submission by our employees of concerns regarding
questionable accounting or auditing matters. In addition, the Audit Committee is directly responsible for the appointment, retention,
compensation and oversight of the work of our independent registered public accounting firm, including approving services and fee arrangements.
All related party transactions will be approved by the Audit Committee before we enter into them.
Both
our independent registered public accounting firm and internal financial personnel regularly meet with, and have unrestricted access
to, the Audit Committee.
The
Board has determined that each of Mr. Lefkowitz, Dr. Dunton and Mr. Duncan qualifies as an “audit committee financial expert”
as that term is defined in the rules and regulations of the SEC. The designation of each of Mr. Lefkowitz, Dr. Dunton and Mr. Duncan
as an “audit committee financial expert” does not impose on them any duties, obligations or liability that are greater than
those that are generally imposed on them as a member of the Audit Committee and the Board, and their designation as an “audit committee
financial expert” pursuant to this SEC requirement does not affect the duties, obligations or liability of any other member of
the Audit Committee or the Board.
Compensation
Committee
The
Compensation Committee reviews and approves our compensation policies and all forms of compensation to be provided to our executive officers,
including, among other things, annual salaries, bonuses, and other incentive compensation arrangements. The Compensation Committee also
reviews and makes recommendations to our Board regarding changes in director compensation. In addition, the Compensation Committee administers
our equity compensation plans, including granting stock options to our executive officers. The Compensation Committee also reviews and
approves employment agreements with executive officers and other compensation policies and matters. Pursuant to its charter, the Compensation
Committee has the power to form and delegate authority to subcommittees and to delegate authority to one or more members of the Compensation
Committee.
Since
2016, the Company and the Compensation Committee have periodically engaged Frederic W. Cook & Co., an independent compensation consultant,
for input on the compensation of our Named Executive Officers and directors. The Compensation Committee assessed the independence of
Frederic W. Cook & Co., considering the factors required by the Nasdaq Global Market Listing Rules and concluded that no conflict
of interest exists that would prevent Frederic W. Cook & Co. from independently representing our Company. In the future, we, or the
Compensation Committee, may engage or seek the advice of Frederic W. Cook & Co., or another compensation consultant.
Each
member of the Compensation Committee is a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act.
47
Nominating
and Governance Committee
The
Nominating and Governance Committee identifies, evaluates and recommends nominees to the Board and committees of the Board, conducts
searches for appropriate directors and evaluates the performance of the Board and of individual directors. The Nominating and Governance
Committee also is responsible for reviewing developments in corporate governance practices, evaluating the adequacy of our corporate
governance practices and reporting and making recommendations to the Board concerning corporate governance matters.
Executive
Officers
The
following table sets forth the name, age and position of each of our executive officers as of December 31, 2023:
Name Age Position(s) with CorMedix
Joseph Todisco 48 Chief Executive Officer
Matthew David 46 Executive Vice President and Chief Financial Officer
Erin Mistry 42 Executive Vice President and Chief Commercial Officer
See
the biography for Joseph Todisco under “Directors.”
Matthew
David. M.D., became our Executive Vice President and Chief Financial Officer in May 2020. From October 4, 2021 through
May 10, 2022, Dr. David also served as our interim Chief Executive Officer in addition to his role as Chief Financial Officer.
Prior to joining us, he most recently served as Head of Strategy at Ovid Therapeutics Inc, a late-stage clinical biopharmaceutical company
focused on developing treatments for rare neurological disorders, where he was responsible for financing strategy and investor relations,
and joined in October 2018. Prior to Ovid, Dr. David was a Strategic Advisor to Frequency Therapeutics, advising on financing, investor
relations and strategic initiatives from 2017 to early 2019. Prior to Frequency, Dr. David spent the majority of his career as an investment
banker specialized in the life sciences sectors, including at Piper Jaffray, Thomas Weisel Partners, Ferghana Partners and most recently
at Bank of America Merrill Lynch. As part of his experience as an investment banker, Dr. David has advised on a broad range of capital
raising and strategic transactions. Earlier in his career, Dr. David was part of the equity research team at Lehman Brothers, focusing
on Large Pharma. Dr. David began his career as a surgical resident at Beth Israel Hospital, after receiving an M.D. from NYU School of
Medicine. Dr. David earned his Bachelor of Arts degree in Chemistry, magna cum laude, from Dartmouth College.
Beth Zelnick Kaufman
became our Executive Vice President and Chief Legal Officer and Corporate Secretary on December 12, 2023. She has more than two decades
of legal, compliance and operations experience in the life sciences industry. Prior to joining CorMedix, she most recently served as Chief
Legal and Administrative Officer and Corporate Secretary of Akorn Pharmaceuticals, a specialty and generic pharmaceuticals company. Ms.
Zelnick Kaufman also served in several roles at Amneal Pharmaceuticals, a publicly traded global generics, biosimilars and branded pharmaceuticals
company, including roles as Assistant General Counsel, Vice President, Legal Affairs, and Head of Government Affairs. During her tenure
at these and other pharmaceutical companies, Ms. Zelnick Kaufman gained deep experience in the pharmaceutical industry across legal, regulatory,
government affairs, and other operational areas. Earlier in her career, Ms. Zelnick Kaufman held roles at Actavis, Alpharma and Topcon
America and spent time as an Associate in the law firm Brown, Rudnick.
Erin
Mistry became our Senior Vice President of Payer Strategy, Government Affairs and Trade in March 2020. Her current role is Executive
Vice President and Chief Commercial Officer, effective January 2023. Prior to joining CorMedix, Erin held roles as VP market access at
Intarcia therapeutics as well as Senior Managing Director of the global Value and Access practice at Syneos Health. During her career,
Erin has worked with emerging, mid-size, and large biopharma companies with a focus on pricing, access and reimbursement. She currently
serves on the boards of Incubate Coalition and the AntiMicrobial Working Group, both in Washington, DC. Erin holds a B.S. in Industrial
Engineering (healthcare) and an M.S. in Biomechanical Engineering from North Carolina State University.
Elizabeth
Hurlburt became our Executive Vice President and Head of Clinical Operations in March 2018. Her current role is Executive Vice
President and Head of Clinical and Medical Affairs, effective May 2022. Prior to her employment, Ms. Hurlburt had been providing us clinical
operations expertise as a consultant since late November 2017. Before she began her consulting career, she held several progressive management
roles in clinical operations, most recently at Gemphire Therapeutics, as a Senior Director, Clinical Operations from April 2015 to October
2016, then as Vice President, Clinical Operations from October 2016 to March 2018. Ms. Hurlburt received her B.A. in Leadership and Organizational
Management from Bay Path College and a M.S. in Management and Leadership from Western Governors University.
On
December 31, 2023, Phoebe Mounts, our former Executive Vice President and General Counsel and Head of Regulatory, Compliance and Legal,
voluntarily resigned effective December 31, 2023. See Item 11, Executive Compensation, for further detail on the terms of Ms.
Mounts’ separation with the Company.
48
Item 11.
Executive Compensation
DIRECTOR