A Medical Play With 'Exploding' Sales Is on My Radar
This small biopharma company with 'tremendous potential' is making major moves, and the numbers are impressive.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
The market action is mixed Monday morning as investors position for a number of economic reports. There is near certainty that the Fed will cut rates next week, but the extent of its dovishness will be impacted by the data that are coming up later this week.
Breadth is negative, and small-caps are lagging while the Magnificent Seven MAGS is up 1% and hit a new high. Pockets of momentum have cooled off, while there is a move back into more conservative big-caps. Biotechnology IBB, which led on Friday, is giving back about half of its gains early on Monday.
I'm focused on managing positions and looking for new ideas. One name that caught my eye due to its news flow is CorMedix CRMD. The stock is trading poorly on Monday morning, which I think is due to hedging moves by institutional investors after a takeover was finalized last week, but that pressure should relent fairly fast.
After years of development, CorMedix received FDA approval for its DefenCath product in November 2023 and launched it in April 2024. DefenCath is a solution of tarolidine and heparin that is injected into a catheter after each use. This injection blocks infection caused by catheters used in kidney dialysis. Treating infection in kidney dialysis is very costly, at an estimated cost of around $63,000 per case. There are roughly 19 million outpatient dialysis treatments per year, so this is a very big market.
The company is currently in Phase 3 trials seeking FDA approval for an additional use for DefenCath in feeding tubes that are inserted into the GI tract. The total addressable market (TAM) is estimated to be about $500 million to $750 million. There are several other catheter applications that are suitable for the DefenCath product.
Sales of DefenCath have exploded, going from $700,000 in the first quarter of 2024 and hitting $38 million in the June 2025 quarter. This growth is driven primarily by agreements with Large Dialysis Organizations (LDOs) such as Fresenius FMS and DaVita DVA, which control 91% of the U.S. dialysis market. CorMedix is now estimating DefenCath sales of $200 million to $215 million in 2025.
Shortly after announcing its supply deal with an LDO, CorMedix surprised the market with a spot secondary offering of 6.6 million shares at an average price of $12.87 on June 27. The stock dropped sharply on the news and quickly broke pricing due to concerns about dilution.
However, on August 7, it became clear that this offering was done in preparation for the acquisition of Melinta Therapeutics for $300 million. This deal was done to broaden CorMedix's offerings beyond DefenCath. Melinta has six infectious disease products and an important phase III study for Rezzayo expected in the first half of 2026. Several overlaps in marketing and sales should make the deal accretive to earnings.
On Monday morning, September 8, CorMedix announced a $5 million equity investment in Talphera (TLPH). Talphera has granted CorMedix the exclusive right of first negotiation for a potential acquisition of the company with a 60-day exclusive negotiation period following completion and announcement of its Phase 3 study results for Niyad, a lyophilized formulation of nafamostat currently being studied as an anticoagulant for the extracorporeal circuit. It also granted CorMedix the right to nominate one member to Talphera's Board of Directors. This is another strategic fit for CorMedix as they build their core business.
On September 2, CorMedix announced that it now sees pro forma revenues of $325 million to $350 million in 2025 and pro forma EBITDA of $165 million to $185 million.
The company has had revenues in the first half of 2025 of $79 million. The new guidance would produce revenues of $246 million to $271 million in the second half of the year, which is a jump of over 300%. This implies EPS in the range of $0.38 to $0.45 or more in the next two quarters, but there is a high level of uncertainty due to the costs of merging the enterprises.
Analysts have yet to fully update guidance, but the currently published EPS estimate is $1.69 for 2025 and 38% growth to $2.33 in 2026. That works out to a forward P/E multiple of just over 5x, which is exceptionally low given the expected high level of EPS growth.
CorMedix management will face some major challenges and needs to execute, but the potential here is tremendous. The company will likely require additional cash in the next year, as competitors are developing a product similar to DefenCath. However, CorMedix currently dominates the market and enjoys a first-mover advantage.
The stock has been very volatile and pulled back sharply over the last week. I suspect this may be due to moves made by Deerfield Management Company, which previously controlled Melinta. Deerfield and other institutional investors are holding $150 million in convertible debt that was used to finance the deal. There is likely some hedging of those positions, putting pressure on the stock.
Technically, the chart is a bit of a mess, but there is support around the 50-day simple moving average at $12.17. The market needs some time to understand the finances here and to digest the financing, but I'm looking for support at $12 as a good entry level.
A full company presentation can be found here.
I have a position in CRMD and will be trading it aggressively as it develops.
At the time of publication, Rev Shark was long CRMD.
