CorMedix Approved to Sell $1.3 Million of NOL Tax Benefits Through The New Jersey Economic Development Authority Program

Rhea-AI Summary

CorMedix Inc. (NASDAQ: CRMD) has received approval from the New Jersey Economic Development Authority to transfer $1.3 million in net operating loss (NOL) tax benefits to an unrelated profitable corporation. This initiative, part of the New Jersey Technology Business Tax Certificate Transfer program, is anticipated to yield $1.3 million in cash proceeds by Q2 2020. CEO Khoso Baluch highlighted that this funding supports the advancement of their lead product, DefenCath, towards a U.S. market launch, focusing on preventing bloodstream infections in chronic hemodialysis patients.

Positive

• Approval of the transfer of $1.3 million NOL tax benefits, providing critical cash flow.
• Continued funding will aid in the advancement of DefenCath towards U.S. market launch.

Negative

• DefenCath's NDA filing was met with a Complete Response Letter from the FDA, indicating unresolved manufacturing deficiencies.

BERKELEY HEIGHTS, N.J., March 15, 2021 (GLOBE NEWSWIRE) -- CorMedix Inc. (NASDAQ: CRMD), a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of infectious and inflammatory disease, today announced that it has been approved by the New Jersey Economic Development Authority (NJEDA) to transfer approximately $1.3 million of the total $1.3 million of its available tax benefits to an unrelated, profitable New Jersey corporation pursuant to the Company’s application to participate in the New Jersey Technology Business Tax Certificate Transfer (NOL) program for State Fiscal Year 2020. The Company anticipates receiving approximately $1.3 million in cash proceeds from the sale of its NOLs during the second quarter of 2020. Closing is subject to NJEDA’s typical closing conditions, which are in process.

“We are pleased to receive an allocation from this program for the third consecutive year,” said Khoso Baluch, Chief Executive Officer of CorMedix. “The funding will help us continue to advance DefenCath toward an anticipated commercial launch upon approval for the U.S. market.”

The NOL program enables qualified, unprofitable NJ-based technology or biotechnology companies with fewer than 225 U.S. employees (including parent company and all subsidiaries) to sell a percentage of net operating losses and research and development (R&D) tax credits to unrelated profitable corporations. This allows qualifying technology and biotechnology companies with NOLs to turn their tax losses and credits into cash proceeds to fund growth and operations, including research and development or other allowable expenditures. CorMedix is one of 49 early-stage companies to share in approximately $54.5 million of tax credit transfers approved by NJEDA for the 2020 period.

About CorMedix

CorMedix Inc. is a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of infectious and inflammatory diseases. The Company is focused on developing its lead product DefenCath™, a novel, antibacterial and antifungal solution designed to prevent costly and life-threatening bloodstream infections associated with the use of central venous catheters in patients undergoing chronic hemodialysis. DefenCath has been designated by FDA as Fast Track and as a Qualified Infectious Disease Product, which provides an additional five years of marketing exclusivity, which will be added to the five years granted to a New Chemical Entity upon approval of a New Drug Application (NDA). The NDA was filed with FDA and the Company has been informed in a Complete Response Letter (CRL) that approval requires resolution of deficiencies at the third-party manufacturing facility. CorMedix also intends to develop DefenCath as a catheter lock solution for use in oncology and total parenteral nutrition patients. It is leveraging its taurolidine technology to develop a pipeline of antimicrobial medical devices, with programs in surgical sutures and meshes, and topical hydrogels. The Company is also working with top-tier researchers to develop taurolidine-based therapies for rare pediatric cancers. Neutrolin® is CE Marked and marketed in Europe and other territories as a medical device. For more information, visit: www.cormedix.com.

Forward-Looking Statements

This press release contains 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 CorMedix’s prospects, future financial position, financing plans, future revenues and projected costs should be considered forward-looking. Readers are cautioned that actual results may differ materially from projections or estimates due to a variety of important factors, including: the results of our discussions with the FDA regarding the DefenCath development path; the resources needed to secure approval of the new drug application for DefenCath from the FDA, including manufacturing at a third-party facility; the risks and uncertainties associated with CorMedix’s ability to manage its limited cash resources and the impact on current, planned or future research, including the continued development of DefenCath/Neutrolin and research for additional uses for taurolidine; obtaining additional financing to support CorMedix’s research and development and clinical activities and operations; preclinical results are not indicative of success in clinical trials and might not be replicated in any subsequent studies or trials; and the ability to retain and hire necessary personnel to staff our operations appropriately. At this time, we are unable to assess whether, and to what extent, the uncertainty surrounding the Coronavirus pandemic may impact our business and operations. These and other 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 its forward-looking statements, and investors should not place undue reliance on these statements. CorMedix assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Investor Contact:

Dan Ferry
Managing Director
LifeSci Advisors
617-430-7576

FAQ

What tax benefits did CorMedix transfer and how much was it worth?

CorMedix transferred $1.3 million in net operating loss tax benefits.

When does CorMedix expect to receive cash from the NOL transfer?

CorMedix anticipates receiving approximately $1.3 million in cash proceeds during Q2 2020.

What is the purpose of the funding from the NOL transfer for CorMedix?

The funding will help advance DefenCath towards a commercial launch upon FDA approval.

What challenges does CorMedix face regarding DefenCath's FDA approval?

CorMedix received a Complete Response Letter due to unresolved deficiencies at a third-party manufacturing facility.