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Item 1. Business

2025-03-25 compared with 2024-03-12 · 647 added, 764 removed, 89 unchanged (94% of the section changed)

are a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of life-threatening

diseases and conditions.

primary focus is on the commercialization of our lead product, DefenCath ® in the United States.

We have in-licensed the

worldwide rights to develop and commercialize DefenCath.

CorMedix Inc.

(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 life-threatening diseases and conditions.

Our primary focus is commercializing

our lead product, DefenCath® (taurolidine and heparin), in the U.S.

The name DefenCath is the U.S.

proprietary name approved by the U.S.

Drug Administration, or 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”).

proprietary name approved by the

Food and Drug Administration (“FDA”).

CorMedix launched the product commercially in April 2024 in the inpatient setting

and July 2024 in the outpatient hemodialysis setting.

DefenCath is an FDA approved 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

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

clinically confirmed subset of the epidemiological surveillance term, central line associated bloodstream infection (“CLABSI”),

can lead to treatment delays and increased costs to the healthcare system when they occur due to extended and often repeat 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.

– United States

On November 15, 2023, we announced

that the FDA approved the new drug application (“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.

Following the submission of a duplicate New Technology Add-On Payment

(“NTAP”) application to Centers for Medicare and Medicaid Services (“CMS”), CMS issued the Inpatient Prospective

Payment System (“IPPS”) 2024 proposed rule that includes a NTAP per hospital stay for DefenCath.

This NTAP represents reimbursement

to inpatient facilities of 75% of the wholesaler acquisition cost (“WAC”) price per 3 mL vial, and an average utilization

of 19.5 vials per hospital stay.

The final IPPS rule amended as of October 1, 2024 to reflect the current WAC of $249.99 per 3ml vial

resulting in a potential maximum NTAP of $3,656.10.

On November 15, 2023, we

announced that the FDA approved the new drug application (“NDA”) for DefenCath to reduce the incidence of CRBSI in adult

patients with kidney failure receiving chronic hemodialysis through a CVC.

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, CorMedix launched the product commercially in April 2024 in the inpatient setting and July 2024 in the outpatient hemodialysis

DefenCath is listed in the

Orange Book as having New Chemical Entity or 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”).

As part of the DefenCath approval

letter, the FDA communicated the existence of a required pediatric assessment under the Pediatric Research Equity Act (“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.

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 the Centers for Medicare & Medicaid Services (“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.

represents reimbursement to inpatient facilities of 75% of the anticipated wholesaler acquisition cost (“WAC”) 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, we 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 us 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.

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 of the average selling price (“ASP”) (or 100 percent

of WAC 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 post-TDAPA add-on payments applying to all ESRD

PPS payments for years three through five).

CMS confirmed to us 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, we anticipate

discussing with the FDA potential pathways for expanded indications.

announced on May 1, 2023 that the United States Patent and Trademark Office (“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.

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.

7,696,182, and has the potential to provide an additional layer of patent protection for DefenCath

through 2042.

– International

was previously sold in the European Union, or EU, and other territories where we received CE-Mark approval for the commercial distribution

of Neutrolin as a CLS.

We have 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.

Development Possibilities

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

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.

Agreement with NDP Partners

On January 30, 2008, we entered

into a License and Assignment Agreement, or the ND License Agreement, with ND Partners LLC, or NDP.

Pursuant to the ND License Agreement,

NDP granted us exclusive, worldwide licenses for certain antimicrobial catheter lock solutions, processes for treating and inhibiting

infections, a biocidal lock system and a taurolidine delivery apparatus, and the corresponding United States and foreign patents and applications

(the “NDP Technology”).

NDP also granted us exclusive licenses, with the right to grant sublicenses, to use and display certain

trademarks in connection with the NDP Technology.

As consideration in part for the rights to the NDP Technology, we paid NDP an initial

licensing fee of $325,000 and granted NDP an equity interest in our Company consisting of 73,107 shares of common stock as of December

In addition, we are required to make cash payments to NDP upon the achievement of certain milestones.

The maximum aggregate

amount of cash payments upon achievement of milestones is $3,000,000, with $2,000,000 remaining at December 31, 2023.

During the year ended December

31, 2013, a milestone payment of $500,000 was earned by NDP upon the first issuance of the CE Mark for Neutrolin.

On April 11, 2013, we

entered into an amendment to the ND License Agreement which extended the milestone payment from within 30 days after such issuance to

within twelve months after the achievement of such issuance.

As consideration for the amendment, we issued NDP a five-year warrant to

purchase 25,000 shares of our common stock at an exercise price of $7.50 per share.

The warrant, which was exercisable immediately upon

issuance, expired in April 2018.

In January 2014, the $500,000 milestone payment due to NDP was converted into 10,000 Series C-3 non-voting

preferred stock and a warrant to purchase 50,000 shares of our common stock at an exercise price of $4.50 per share.

These warrants expired

and were unexercised during the year ended December 31, 2020.

During the year ended December

31, 2014, a certain milestone was achieved resulting in the release of 7,277 shares held in escrow.

The terms of the escrow agreement

provide that if, as of December 31, 2022, any shares remain in escrow, such shares will be returned to the Company and cancelled.

were no milestones achieved in 2023 or 2022.

The ND License Agreement will

expire on a country-by-country basis upon the earlier of (i) the expiration of the last patent claim under the ND License Agreement in

a given country, or (ii) the payment of all milestone payments.

Upon the expiration of the ND License Agreement in each country, we will

have an irrevocable, perpetual, fully paid-up, royalty-free exclusive license to the NDP Technology in such country.

The ND License Agreement

also may be terminated by NDP if we materially breach or default under the ND License Agreement and that breach is not cured within 60

days following the delivery of written notice to us, or by us on a country-by-country basis upon 60 days prior written notice.

ND License Agreement is terminated by either party, our rights to the NDP Technology will revert back to NDP.

Orange Book as having new chemical entity (“NCE”) exclusivity (5 years) expiring on November 15, 2028, and the Generating

Antibiotic Incentives Now (“GAIN”) exclusivity extension of the NCE exclusivity (an additional 5 years) expiring on November

The GAIN exclusivity extension of 5 years is the result of the January 2015 designation of DefenCath as a Qualified Infectious

Disease Product (“QIDP”).

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 received confirmation that our application was approved on April 18, 2024 for a July 1, 2024 implementation.

We also submitted

a Healthcare Common Procedure Coding System (“HCPCS”) application for a J-code to CMS on December 8, 2023, for DefenCath,

which is relevant to billing and the TDAPA application.

The HCPCS J-code for DefenCath was published by CMS on April 2, 2024.

TDAPA reimbursement

is calculated based on 100 percent ASP (or 100 percent of wholesale acquisition price or manufacturers’ list price, respectively,

if such data is unavailable).

TDAPA and post-TDAPA add-on payment adjustments for DefenCath apply for five years (with such add-on payments

applying to all ESRD PPS payments for years three through five).

CMS confirmed a July 1, 2024 implementation date for HCPCS and TDAPA.

We announced on June 6, 2024

that CMS determined that DefenCath qualified for pass-through status under the hospital Out-Patient Prospective Payment System (“OPPS”).

Pass-through status provides for separate payment under Medicare Part B for the utilization of DefenCath in the outpatient ambulatory

setting for a period of at least two years, and up to a maximum of three years.

While vascular access for hemodialysis can be initiated

in an inpatient setting, ambulatory surgical centers or vascular access centers offer a less-invasive, outpatient-based alternative for

We estimate that up to 100,000 hemodialysis-central venous catheter (“HD-CVC”) placements occur each year, and pass-through

status offers providers a separate reimbursement mechanism in this setting of care administration of DefenCath.

Subsequent to the launch of DefenCath in April 2024, we announced U.S.-based

multi-year commercial supply agreements consisting of a large and several mid-sized dialysis organizations.

Each provider has customized

an implementation plan to provide access to patients based on a variety of clinical and other factors.

We believe the currently contracted

customer base represents roughly 60% of the outpatient dialysis centers in the U.S., in terms of the total addressable patient market.

Market Opportunity

Central Venous Catheters (“CVC”) or ‘central lines’

are an important and frequently used method for accessing the vasculature for hemodialysis (a form of dialysis where the patient’s

blood is circulated through a dialysis filter), administering chemotherapy and basic fluids in cancer patients and for cancer chemotherapy,

administering long term antibiotic therapy, and administering total parenteral nutrition (complete or partial dietary support via intravenous

Bloodstream infections

resulting from the use of central venous catheters known as CLABSIs can result in significant morbidity and increased rates of

hospital admissions, readmissions and mortality.

One of the major and common risk factors for all patients requiring CVCs is the

risk of acquiring a CLBSI and the clinical complications associated with them.

The total annual cost for treating outpatient derived

CRBSI episodes and their related complications in the U.S.

is up to $2.3 billion, with approximately 250,000 CRBSI episodes per year

(Becker’s Hospital Review).

According to the 2024 United States Renal Disease System, reporting

data from 2022, there were nearly 816,000 End-Stage-Renal-Disease, or ESRD, patients on permanent hemodialysis in the U.S.

25% of these utilized a CVC for vascular access.

Of the total population, approximately 131,000 hemodialysis patients were new patients

diagnosed with ESRD during the year and nearly 85% of those were receiving dialysis through a CVC.

Patients are typically treated in various

care settings including inpatient hospitals and outpatient dialysis clinics.

Kidney failure patients can include both those affected by

Acute Kidney Injury, or AKI and Chronic Kidney Disease, or CKD, populations that progress into dialysis.

Kidney failure patients that

present in the hospital have an average length of stay of 13.3 days and additionally high 30-day readmission rates both for same diagnosis

and all-cause with the all-cause readmissions being higher.

The two primary causes of CLABSI are the external introduction of pathogens

to the catheter site and the internal proliferation of pathogens within the catheter lumens.

Intralumen infections are often caused by

the formation of biofilm.

Biofilm build up is the pathogenesis of both infections and thrombotic complications in central venous catheters.

Prevention of CRBSI and inflammatory complications requires both removal of pathogens from the internal surface of the catheter to prevent

the systemic dissemination of organisms contained within the biofilm as well as an anticoagulant to retain blood flow during dialysis.

Biofilm forms when bacteria adhere to surfaces in aqueous environments and begin to excrete a slimy, glue-like substance that can anchor

them to various types of materials, including intravenous catheters.

The presence of biofilm has many adverse effects, including the ability

to release bacteria into the blood stream.

The current standard of catheter care is to instill a heparin lock solution at a concentration

of 1000 u/mL into each catheter lumen immediately following treatment, in order to prevent clotting between dialysis treatments.

a heparin lock solution provides no protection from the risk of infection.

Other than DefenCath, there are no pharmacologic drug products approved

for the prevention or reduction of CRBSIs in CVCs.

We believe there is a significant need for reduction or prevention of CRBSIs

in the hemodialysis patient population as well as for other patient populations utilizing central venous catheters such as total parenteral

nutrition and oncology/chemotherapy.

DefenCath, our FDA-approved product, is a non-antibiotic, broad-spectrum

antimicrobial and anticoagulant combination that is active against common microbes including antibiotic-resistant strains of certain pathogens

whose mechanism of action inhibits the first steps in biofilm formation.

We believe that using DefenCath as an antimicrobial catheter-lock

solution will significantly reduce the incidence of life-threatening catheter-related blood stream infections, thus reducing the need

for systemic antibiotics while prolonging catheter function.

We are unaware of any drug products other than DefenCath approved by the

FDA with an indication for use as a catheter lock solution.

We announced on May 1, 2023

that the USPTO allowed our patent claims directed to a locking solution composition for treating and reducing infection and flow reduction

in central venous catheters.

Our newly issued U.S.

Patent 11,738,120 reflects the unique and proprietary formulation of our product, DefenCath,

for which we received FDA approval on November 15, 2023.

The newly issued patent provides patent coverage that supplements our existing

licensed U.S.

that the United States Patent and Trademark Office (“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.

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.

7,696,182, and has the potential to provide an additional layer of patent protection for DefenCath through 2042.

We believe that the patents

and patent applications we have licensed pursuant to the ND License Agreement cover effective solutions to the various medical problems

discussed previously when using taurolidine in clinical applications, and specifically in hemodialysis applications.

The foregoing summary

of the ND License Agreement does not purport to be complete and is qualified in its entirety by reference to the ND License Agreement,

attached as an exhibit hereto and which is incorporated by reference herein.

venous catheters, or CVCs, and peripherally inserted central catheters, or Central Catheters, are an important and frequently used method

for accessing the vasculature for hemodialysis (a form of dialysis where the patient’s blood is circulated through a dialysis filter),

administering chemotherapy and basic fluids in cancer patients and for cancer chemotherapy, administering long term antibiotic therapy,

and administering total parenteral nutrition (complete or partial dietary support via intravenous nutrients).

infections resulting from the use of central catheters known as CRBSIs can result in significant morbidity and increased rates of hospital

admissions, readmissions and mortality.

One of the major and common risk factors for all patients requiring CVCs is CRBSI and the clinical

complications associated with them.

The total annual cost for treating CRBSI episodes and their related complications in the U.S.

up to $2.3 billion, with approximately 250,000 CRBSI episodes per year (Becker’s Hospital Review).

to the 2022 United States Renal Disease System, reporting data from 2020, there were nearly 808,000 End-Stage-Renal-Disease, or ESRD,

patients on permanent hemodialysis in the U.S.

Of these, nearly 108,000 hemodialysis patients were new patients diagnosed with ESRD during

the year they were receiving dialysis through a CVC.

Patients are typically treated in various care settings including inpatient hospitals

and outpatient dialysis clinics.

Kidney failure patients can include ESRD, Acute Kidney Injury, or AKI and Chronic Kidney Disease, or

CKD, populations that progress into dialysis.

Patients that present in the hospital have an average length of stay of 13.3 days and additionally

high 30-day readmission rates both for same diagnosis and all-cause with the all-cause readmissions being higher.

build up is the pathogenesis of both infections and thrombotic complications in central venous catheters.

Prevention of CRBSI and inflammatory

complications requires both removal of pathogens from the internal surface of the catheter to prevent the systemic dissemination of organisms

contained within the biofilm as well as an anticoagulant to retain blood flow during dialysis.

Biofilm forms when bacteria adhere to

surfaces in aqueous environments and begin to excrete a slimy, glue-like substance that can anchor them to various types of materials,

including intravenous catheters.

The presence of biofilm has many adverse effects, including the ability to release bacteria into the

blood stream.

The current standard of catheter care is to instill a heparin lock solution at a concentration of 1000 u/mL into each catheter

lumen immediately following treatment, in order to prevent clotting between dialysis treatments.

However, a heparin lock solution provides

no protection from the risk of infection.

Other than DefenCath, there

are no pharmacologic drug products approved in the U.S.

for the prevention or reduction of CRBSIs in CVCs.

We believe there is a significant

need for reduction or prevention of CRBSIs in the hemodialysis patient population as well as for other patient populations utilizing central

venous catheters and peripherally inserted central catheters, such as oncology/chemotherapy, and total parenteral nutrition.

DefenCath, our FDA-approved

product, is a non-antibiotic, broad-spectrum antibacterial, antifungal and anticoagulant combination that is active against common microbes

including antibiotic-resistant strains and in addition may prevent biofilm formation.

We believe that using DefenCath as an anti-infective

catheter-lock solution will significantly reduce the incidence of life-threatening catheter-related blood stream infections, thus reducing

the need for local and systemic antibiotics while prolonging catheter function.

We are unaware of any drug products other than DefenCath

approved by the FDA with an indication for use as a catheter lock solution.

The drug and medical device industries are highly

competitive and subject to rapid and significant technological change.

DefenCath’s potential competitors could include large as

well as specialty pharmaceutical and biotechnology companies and large and specialty medical device companies.

Many of our potential competitors

have substantially greater financial, technical and human resources than we do and significantly more experience in the development and

commercialization of drugs and medical devices.

Further, the development of new treatment methods could render DefenCath non-competitive

We currently believe the

patent that is most material to our business is U.S.

11,738,120 (expiring April 15, 2042).

License Agreement with ND Partners, LLP

In 2008, we entered into

a License and Assignment Agreement (the “ND License Agreement”) with ND Partners, LLP (“NDP”).

Pursuant to the

ND License Agreement, NDP granted us exclusive, worldwide licenses for certain antimicrobial catheter lock solutions, processes for treating

and inhibiting infections, a biocidal lock system and a taurolidine delivery apparatus, and the corresponding United States and foreign

patents and applications (the “NDP Technology”).

As consideration in part for the rights to the NDP Technology, upon execution

of the ND License Agreement, we paid NDP an initial licensing fee of $325,000 and granted NDP a 5% equity interest, consisting of 7,996

shares of our common stock.

Under the ND License Agreement, we are required to make cash and equity

payments to NDP upon the achievement of certain milestones.

Under the ND License Agreement, the maximum aggregate amount of cash payments

due upon achievement of applicable milestones was $2,500,000, with the balance being $2,000,000 as of December 31, 2024.

The outstanding

sales milestones were met in the third quarter of 2024 and, accordingly, we anticipate payment will be due in accordance with the agreement

terms at the end of the twelve month period post attainment.

Beginning in the second quarter of 2024, the license intangible asset

is amortized as cost of goods sold over its estimated economic life of approximately 10 years.

The amortization start period correlates

with the product launch of DefenCath and the first period in which revenue will be recognized.

Amortization expense of approximately $52,000

and $156,000 was recorded during the three and twelve month periods ending December 31, 2024, respectively.

The ND License Agreement

will expire on a country-by-country basis upon the earlier of (i) the expiration of the last patent claim under the ND License Agreement

in a given country, or (ii) the payment of all milestone payments.

Upon the expiration of the ND License Agreement in each country, we

will have an irrevocable, perpetual, fully paid-up, royalty-free exclusive license to the NDP Technology in such country.

The ND License

Agreement also may be terminated by NDP if we materially breaches or defaults under the ND License Agreement and that breach is not cured

within 60 days following the delivery of written notice to us, or by us on a country-by-country basis upon 60 days prior written notice

in the event our Board determines not to proceed with the development of the NDP Technology.

If the ND License Agreement is terminated

by either party, our rights to the NDP Technology will revert back to NDP.

Competitive Landscape

The drug and medical device

industries are highly competitive and subject to rapid and significant technological change.

DefenCath’s potential competitors

could include large as well as specialty pharmaceutical and biotechnology companies and large and specialty medical device companies.

Many of our potential competitors have substantially greater financial, technical and human resources than we do and significantly more

experience in the development and commercialization of drugs and medical devices.

Further, the development of new treatment methods could

render DefenCath non-competitive or obsolete.

We believe that the key competitive

factors that will affect the commercial success of DefenCath are efficacy and safety, as well as pricing and reimbursement.

DefenCath is the only approved catheter lock solution with antimicrobial properties in the U.S., we believe that with adequate reimbursement

there is an opportunity for DefenCath to become the new standard of care as a CLS in the U.S.

We are not aware of any potentially

competitive CLS which are approved or under development by other companies in the U.S.

As a means to reduce infections, some dialysis

providers may be using anti-infective infused catheter caps and/or compounded unapproved antibiotic catheter lock solutions.

Manufacturing/Supply

do not own or operate any manufacturing facilities related to the production of our products.

All our manufacturing processes currently

are, and we expect them to continue to be, outsourced to third parties.

We rely on third-party manufacturers to produce sufficient quantities

of drug product for use both commercially and in clinical trials.

factors that will affect the commercial success of DefenCath are established efficacy and safety, as well as pricing and reimbursement

mechanisms across the continuum of care.

Given that DefenCath is the only approved antimicrobial catheter lock solution in the U.S., we

believe that with adequate reimbursement there is an opportunity for DefenCath to become the new standard of care as a CLS in the U.S.

We are not aware of any potentially competitive CLS which are approved or under development by other companies in the U.S.

a means to reduce infections, some dialysis providers are using anti-infective infused catheter caps and/or compounded unapproved antibiotic

catheter lock solutions.

We expect sales of DefenCath

to generate substantially all of our product revenues for the foreseeable future.

Sales to one customer accounted for 86% of our total

revenue for the year ended December 31, 2024, and we had two customers that accounted for 87% and 12% of our accounts receivable, respectively,

for the year ended December 31, 2024.

Pricing and Reimbursement

Sales of DefenCath and any

future product lines will depend, in part, on the extent to which such products will be covered by third-party payors, such as Medicare,

Medicaid, and other federal and state government programs, managed care entities, commercial insurers, and other organizations, as well

as the level of reimbursement such third-party payors provide for DefenCath and any future product lines.

It is essential to obtain third-party

payor coverage policies and adequate payment in order to continue to successfully commercialize DefenCath.

We expect to sell DefenCath

primarily to outpatient dialysis clinics and inpatient hospitals.

Inpatient Reimbursement

For Medicare, inpatient acute-care

hospitals are paid under the inpatient prospective payment system (referred to herein as the “IPPS”).

The IPPS pays

a flat rate based on the average charges across all hospitals for a specific diagnosis, regardless of whether that particular patient

costs more or less.

Under the IPPS, each case is categorized into a diagnosis-related group, or DRG, which is weighted and multiplied

by a standardized amount (updated each year for inflation and other factors), to yield a fixed payment for that DRG and adjusted for

hospital-specific factors (e.g., wages, teaching hospitals) to cover care furnished during the inpatient stay.

Additional, temporary

payment is available for new medical services and technologies called New Technology Add-on Payment, or NTAP, if certain criteria are

There are three criteria required for new technologies to be eligible to receive NTAP:

Product must meet “newness” criteria;

Product must meet “substantial clinical improvement”

over existing technologies;

Product must meet certain cost thresholds.

CMS created several

alternative NTAP approval pathways for certain devices that obtain breakthrough designation and drugs that obtain Qualified Infectious

Disease Product, or QIDP, designation from the FDA.

Under these alternative pathways, the new technology need only meet the cost criterion

because CMS assumes that those products meet the newness and substantial clinical improvement criteria.

CMS has issued the IPPS 2024

proposed rule that includes a NTAP per hospital stay for DefenCath.

This NTAP represents reimbursement to inpatient facilities of 75%

of the WAC price 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 subsequently amended as of October 1, 2024 to reflect the current WAC of $249.99 per 3ml vial.

NTAP is granted for a period

of 2-3 years after the date of FDA approval.

Although NTAP is intended to identify and ensure adequate payment for qualifying new technologies,

it may have a limited effect depending on the DRG assignment after the NTAP period ends.

With established reimbursement in the inpatient

setting, we launched DefenCath in hospitals first while outpatient reimbursement became effective July 1, 2024.

Outpatient Reimbursement

As discussed above, in 2024

DefenCath was found to be subject to Medicare ESRD PPS, which provides bundled payment for renal dialysis services and affords a TDAPA,

which provides temporary, additional payments for certain new drugs and biologicals.

TDAPA reimbursement is calculated based on 100 percent

ASP (or 100 percent of wholesale acquisition price or manufacturers’ list price, respectively, if such data is unavailable).

and post-TDAPA add-on payment adjustments for DefenCath apply for five years (with such add-on payments applying to all ESRD PPS payments

for years three through five).

The HCPCS J-code for DefenCath was published by CMS on April 2, 2024.

CMS confirmed a July 1, 2024 implementation

date for HCPCS and TDAPA.

CMS also determined that

DefenCath qualified for pass-through status under the hospital Out-Patient Prospective Payment System (“OPPS”) in June 2024.

Pass-through status provides for separate payment under Medicare Part B for the utilization of DefenCath in the outpatient ambulatory

setting for a period of at least two years, and up to a maximum of three years.

While vascular access for hemodialysis can be initiated

in an inpatient setting, ambulatory surgical centers or vascular access centers offer a less-invasive, outpatient-based alternative for

We estimate that up to 100,000 HD-CVC placements occur each year, and pass-through status offers providers a separate reimbursement

mechanism in this setting of care administration of DefenCath.

Manufacturing/Supply Chain

We do not own or operate

any manufacturing facilities related to the production of our products.

All our manufacturing processes currently are, and we expect

them to continue to be, outsourced to third parties.

We rely on third-party manufacturers to produce sufficient quantities of drug product

for use both commercially and in clinical trials.

We intend to continue this practice in the future.

We currently have one FDA

approved source for each of our two key active drug ingredients (“APIs”) for DefenCath, taurolidine and heparin sodium, respectively.

With regards to taurolidine, we have a Drug Master File (“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.

note that CMOs and our API suppliers are subject to FDA oversight and inspection regarding compliance with cGMP, and if deemed non-compliant

with cGMP by FDA, we could face shortages or risk with respect to producing sufficient quantities of drug product or drug substance.

States Government Regulation

research, development, testing, manufacture, labeling, promotion, advertising, distribution, and marketing, among other things, of our

products are extensively regulated by governmental authorities in the U.S.

We currently have one FDA approved source for each of our two key active

pharmaceutical ingredients (“APIs”) for DefenCath, taurolidine and heparin sodium, respectively.

With regards to taurolidine,

we have a drug master file (“DMF”) filed with the FDA.

There is a master commercial supply agreement between a third-party

manufacturer and the Company which has been in place since August 2018.

In addition, we are working with our existing manufacture to source

sufficient quantities of taurolidine API to cover at least 24 months of potential future demand.

With respect to heparin sodium API, we

have identified an alternate third-party supplier and may 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 contract manufacturing organization (“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 have also qualified Siegfried Hameln as an alternate finished dosage manufacturing site.

We note that CMOs and our

API suppliers are subject to FDA oversight and inspection regarding compliance with Current Good Manufacturing Practices (“cGMP”),

and if deemed non-compliant with cGMP by FDA, we could face shortages or risk with respect to producing sufficient quantities of drug

product or drug substance.

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 June 2024, we announced that the FDA provided feedback to our request

to discuss development plans for additional indications for DefenCath.

In response to these comments, we created and submitted three clinical

protocols specifically, the post-marketing requirement of a pediatric hemodialysis (“HD”) study as an obligation under the

Pediatric Research Equity Act (“PREA”), a Phase 3 study protocol to reduce the risk of central-line associated bloodstream

infections (“CLABSI”) for adult patients receiving total parenteral nutrition (“TPN”) through a CVC and Expanded

Access Program (“EAP”) to FDA that allows for pediatric and adult patients, utilizing a CVC for the treatment or maintenance

of many serious illness, to access DefenCath to protect their central line from serious infection.

We launched the EAP at the end of 2024

and expect to begin enrollment for the adult TPN and pediatric HD studies in the first half of 2025.

As part of the DefenCath approval letter, the FDA communicated the

existence of a required pediatric assessment under the 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.

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 currently obligated to conduct the study as communicated in the NDA 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 would be

required to 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 the additional 0.5 years

of exclusivity associated with this pediatric study (a total marketing exclusivity period of 10.5 years).

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.

We may seek CMS reimbursement for DefenCath in other catheter indications

beyond ESRD, such as oncology patients and total parenteral nutrition patients, including through (i) relevant hospital inpatient diagnosis-related

groups (“DRGs”), (ii) additional NTAP payments, or (iii) outpatient ambulatory payment classifications, or APCs, and payment

under these Medicare benefit categories is not guaranteed for these additional potential indications.

United States Government Regulation

The research, development,

testing, manufacture, labeling, promotion, advertising, distribution, and marketing, among other things, of our products are extensively

regulated by governmental authorities in the U.S.

and other countries.

DefenCath is an FDA-approved drug, and

our other product candidates may be classified by the FDA as a drug or a medical device (or combination product) depending upon the indications

for use or claims, and/or how the product affects the structure or function of the body.

Because certain of our product candidates are

considered as medical devices and others are considered as drugs for regulatory purposes, we intend to submit applications to regulatory

agencies for approval or clearance of medical device and pharmaceutical product candidates, or combination products, as appropriate.

the U.S., the FDA regulates drugs and medical devices under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and the Agency’s

implementing regulations.

In the U.S., the FDA regulates

drugs and medical devices under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and the FDA’s implementing regulations.

If we fail to comply with the applicable U.S.

requirements at any time during the product development process,

clinical testing, and during the approval process or after approval, we may become subject to administrative or judicial sanctions.

sanctions could include the FDA’s refusal to approve pending applications, withdrawal of an approval, warning letters, adverse

publicity, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties

or criminal prosecution, among other actions.

Any agency enforcement action and/or any related impact could have a material adverse effect

Approval Process

research, development, and approval process in the U.S.

requirements at any time during the product development process, clinical testing, and

during the approval process or after approval, we may become subject to administrative or judicial sanctions.

These sanctions could include

the FDA’s refusal to approve pending applications, withdrawal of an approval, warning letters, adverse publicity, product recalls,

product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution,

among other actions.

Any agency enforcement action and/or any related impact could have a material adverse effect on us.

Drug Approval Process

The research, development,

and approval process in the U.S.

and elsewhere is intensive and rigorous and generally takes many years to complete.

The typical process required by the FDA before a therapeutic drug may be marketed in the U.S.

● Pre-clinical

laboratory and animal tests performed under the FDA’s Good Laboratory Practices, or

GLP, regulations;

to the FDA of an investigational new drug application, or IND, which must become effective

before human clinical trials may commence;

clinical studies to evaluate the drug’s safety and effectiveness for its intended uses;

review of whether the facility in which the drug is manufactured, processed, packaged, or

held meets standards designed to assure the product’s continued quality and compliance

with cGMPs, and FDA review of clinical trial sites to determine whether the clinical trials

were conducted in accordance with Good Clinical Practices, or GCPs;

of a new drug application, or NDA, to the FDA, and approval of the application by the FDA

to allow sales of the drug.

pre-clinical testing, studies are performed with respect to the chemical and physical properties of candidate formulations.

These studies

are subject to GLP requirements.

Biological testing is typically done in animal models to demonstrate the activity of the compound against

the targeted disease or condition and to assess the apparent effects of the new product candidate on various organ systems, as well as

its relative therapeutic effectiveness and safety.

An IND application must be submitted to the FDA and become effective before studies

in humans may commence.

trial programs in humans generally follow a three-phase process.

Typically, Phase 1 studies are conducted in small numbers of healthy

volunteers or, on occasion, in patients afflicted with the target disease.

Phase 1 studies are conducted to determine the metabolic and

pharmacological action of the product candidate in humans and the side effects associated with increasing doses, and, if possible, to

gain early evidence of effectiveness.

In Phase 2, studies are generally conducted in larger groups of patients having the target disease

or condition in order to validate clinical endpoints, and to obtain preliminary data on the effectiveness of the product candidate and

optimal dosing.

This phase also helps determine further the safety profile of the product candidate.

In Phase 3, large-scale clinical

trials are generally conducted in patients having the target disease or condition to provide sufficient data for the statistical proof

of effectiveness and safety of the product candidate as required by United States and foreign regulatory agencies.

Typically, two Phase

3 trials are required for marketing approval, though one such trial, plus confirmatory evidence, may be acceptable.

Post-approval

trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.

These trials are used to

gain additional experience from the treatment of patients in the intended therapeutic indication and are commonly intended to generate

additional safety data regarding use of the product in a clinical setting.

In certain instances, the FDA may mandate the performance

of Phase 4 clinical trials as a condition of approval of an NDA or post-approval.

Additionally,

some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data

safety monitoring board or committee.

This group regularly reviews accumulated data and advises the study sponsor regarding the continuing

safety of trial subjects, and the continuing validity and scientific merit of the clinical trial.

The data safety monitoring board receives

special access to unblinded data during the clinical trial and may advise the sponsor to halt the clinical trial if it determined there

is an unacceptable safety risk for subjects or on other grounds, such as no demonstration of efficacy.

The committee can also stop a

clinical trial for an overwhelming demonstration of efficacy, based on pre-defined, stringent statistical parameters and ethical considerations.

sponsors are required to submit a number of reports to the FDA during the course of a development program.

For instance, sponsors are

required to make annual reports to the FDA concerning the progress of their clinical trial programs as well as more frequent reports

for certain serious adverse events.

Sponsors must submit a protocol for each clinical trial, and any subsequent protocol amendments to

Investigators must also provide certain information to the clinical trial sponsors to allow the sponsors to make certain financial

disclosures to the FDA.

Information about certain clinical trials, including a description of the study and study results, must be submitted

within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their clinicaltrials.gov website.

Moreover, under the 21st Century Cures Act, manufacturers or distributors of investigational drugs for the diagnosis, monitoring, or

treatment of one or more serious diseases or conditions must have a publicly available policy concerning expanded access to investigational

clinical trial process for a new compound can take ten years or more to complete.

The FDA may prevent clinical trials from beginning

or may place clinical trials on hold at any point in this process if, among other reasons, it concludes that study subjects are being

exposed to an unacceptable health risk.

Trials may also be prevented from beginning or may be terminated by institutional review boards,

or IRBs, who must review and approve all research involving human subjects and amendments thereto.

The IRB must continue to oversee the

clinical trial while it is being conducted.

This includes the IRB receiving information concerning unanticipated problems involving risk

Side effects or adverse events that are reported during clinical trials can delay, impede, or prevent marketing authorization.

Similarly, adverse events that are reported after marketing authorization can result in additional limitations being placed on a product’s

use and, potentially, withdrawal of the product from the market.

the completion of a clinical trial, the data are analyzed by the sponsoring company to determine whether the trial successfully demonstrated

safety and effectiveness and whether a product approval application may be submitted.

In the United States, if the product is regulated

as a new drug, an NDA must be submitted and approved by the FDA before commercial marketing may begin.

The typical process

required by the FDA before a therapeutic drug may be marketed in the U.S.

Pre-clinical laboratory

and animal tests performed under the FDA’s Good Laboratory Practices(“GLP”), regulations;

submission to the FDA of

an investigational new drug application (“IND”), which must become effective before human clinical trials may commence;

human clinical studies

to evaluate the drug’s safety and effectiveness for its intended uses;

FDA review of whether the

facility in which the drug is manufactured, processed, packaged, or held meets standards designed to assure the product’s continued

quality and compliance with cGMPs, and FDA review of clinical trial sites to determine whether the clinical trials were conducted

in accordance with Good Clinical Practices (“GCPs”);

submission of a NDA, to

the FDA, and approval of the application by the FDA to allow sales of the drug.

Clinical trial programs in

humans generally follow a three-phase process.

Typically, Phase 1 studies are conducted in small numbers of healthy volunteers or, on

occasion, in patients afflicted with the target disease.

Phase 1 studies are conducted to determine the metabolic and pharmacological

action of the product line in humans and the side effects associated with increasing doses, and, if possible, to gain early evidence

of effectiveness.

In Phase 2, studies are generally conducted in larger groups of patients having the target disease or condition in

order to validate clinical endpoints, and to obtain preliminary data on the effectiveness of the product line and optimal dosing.

phase also helps determine further the safety profile of the product line.

In Phase 3, large-scale clinical trials are generally conducted

in patients having the target disease or condition to provide sufficient data for the statistical proof of effectiveness and safety of

the product line as required by United States and foreign regulatory agencies.

Typically, two Phase 3 trials are required for marketing

approval, though one such trial, plus confirmatory evidence, may be acceptable.

Post-approval trials, sometimes

referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.

These trials are used to gain additional experience

from the treatment of patients in the intended therapeutic indication and are commonly intended to generate additional safety data regarding

use of the product in a clinical setting.

In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition

of approval of an NDA or post-approval.

The clinical trial process

for a new compound can take ten years or more to complete.

The FDA may prevent clinical trials from beginning or may place clinical trials

on hold at any point in this process if, among other reasons, it concludes that study subjects are being exposed to an unacceptable health

Trials may also be prevented from beginning or may be terminated by institutional review boards, or IRBs, who must review and approve

all research involving human subjects and amendments thereto.

The IRB must continue to oversee the clinical trial while it is being conducted.

This includes the IRB receiving information concerning unanticipated problems involving risk to subjects.

Side effects or adverse events

that are reported during clinical trials can delay, impede, or prevent marketing authorization.

Similarly, adverse events that are reported

after marketing authorization can result in additional limitations being placed on a product’s use and, potentially, withdrawal

of the product from the market.

Following the completion

of a clinical trial, the data are analyzed by the sponsoring company to determine whether the trial successfully demonstrated safety

and effectiveness and whether a product approval application may be submitted.

In the United States, if the product is regulated as a

new drug, an NDA must be submitted and approved by the FDA before commercial marketing may begin.

The NDA must include a substantial

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testing, as well as data and information on manufacturing, product quality and stability, and proposed product labeling.

domestic and foreign manufacturing establishment, including any contract manufacturers, must be listed in the NDA and must be registered

with the FDA.

The application generally will not be approved until the FDA conducts a manufacturing inspection, approves the applicable

manufacturing process for the drug product, and determines that the facility is in compliance with current cGMP requirements.

FDA will also typically inspect one or more clinical trial sites to confirm that the applicable clinical trials were conducted in accordance

Under the Prescription Drug

User Fee Act (“PDUFA”), as amended, the FDA assesses and receives application user fees for reviewing an NDA, as well as annual

program fees for commercial manufacturing establishments and for approved products.

These fees can be significant.

Fee waivers, reductions

or refunds are available in certain circumstances.

One basis for a waiver or refund of the application user fee is if the applicant is

a “small business” generally defined as employing fewer than 500 employees, including employees of affiliates, no approved

marketing application for a product that has been introduced or delivered for introduction into interstate commerce, and the applicant,

including its affiliates, is submitting its first marketing application.

Product candidates that are designated as orphan drugs, which

are further described below, are also not subject to application user fees unless the application includes an indication other than the

orphan indication.

Under certain circumstances, orphan products may also be exempt from product and establishment fees.

NDA submitted for FDA approval is usually reviewed for administrative completeness and reviewability.

Following this review, the FDA

may request additional information rather than accept an NDA for filing.

In this event, the application must be resubmitted with the

additional information.

The resubmitted application is also subject to review before the FDA accepts it for filing.

accepted for filing, the FDA’s review of an application may involve review and recommendations by an independent FDA advisory committee.

The FDA must refer applications for drugs that contain active ingredients, including any ester or salt of the active ingredients that

have not previously been approved by the FDA to an advisory committee or provide in an action letter a summary for not referring it to

Once accepted for filing,

the FDA’s review of an application may involve review and recommendations by an independent FDA advisory committee.

refer applications for drugs that contain active ingredients, including any ester or salt of the active ingredients that have not previously

been approved by the FDA to an advisory committee or provide in an action letter a summary for not referring it to an advisory committee.

The FDA may also refer drugs to advisory committees when it is determined that an advisory committee’s expertise would be beneficial

to the regulatory decision-making process, including the evaluation of novel products and the use of new technology.

An advisory committee

The FDA may also refer drugs to advisory committees when it is determined that an advisory committee’s expertise

would be beneficial to the regulatory decision-making process, including the evaluation of novel products and the use of new technology.

An advisory committee is typically a panel that includes clinicians and other experts, which review, evaluate, and make a recommendation

as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory

committee, but it considers such recommendations carefully when making decisions.

evaluating the NDA and all related information, including the advisory committee recommendation, if any, and inspection reports regarding

the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a Complete Response Letter,

If a CRL is issued, the applicant may either resubmit the NDA, addressing all the deficiencies identified in the letter;

the application;

is typically a panel that includes clinicians and other experts, which review, evaluate, and make a recommendation as to whether the

application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it

considers such recommendations carefully when making decisions.

After evaluating the NDA

and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing

facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a Complete Response Letter, or CRL.

a CRL is issued, the applicant may either resubmit the NDA, addressing all the deficiencies identified in the letter;

withdraw the application;

or request an opportunity for a hearing.

A CRL indicates that the review cycle of the application is complete, and the

application is not ready for approval and describes all the specific deficiencies that the FDA identified in the NDA.

A CRL generally

contains a statement of specific conditions that must be met in order to secure final approval of the NDA and may require additional

clinical or pre-clinical testing in order for the FDA to reconsider the application.

The deficiencies identified may be minor, for example,

requiring labeling changes;

A CRL indicates that the review cycle of the application is complete, and the application is

not ready for approval and describes all the specific deficiencies that the FDA identified in the NDA.

A CRL generally contains a statement

of specific conditions that must be met in order to secure final approval of the NDA and may require additional clinical or pre-clinical

testing in order for the FDA to reconsider the application.

The deficiencies identified may be minor, for example, requiring labeling

or major, for example, requiring additional clinical trials.

Even with submission of this additional information,

the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If and when those conditions

have been met to the FDA’s satisfaction, the FDA may issue an approval letter.

An approval letter authorizes commercial marketing

of the drug with specific prescribing information for specific indications.

if the FDA approves a product, it may limit the approved therapeutic uses for the product as described in the product labeling, require

that warning statements be included in the product labeling, require that additional studies be conducted following approval as a condition

of the approval, impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a Risk Evaluation

and Mitigation Strategy, or a REMS, or otherwise limit the scope of any approval.

Even with submission of this additional information, the FDA ultimately

may decide that the application does not satisfy the regulatory criteria for approval.

If and when those conditions have been met to

the FDA’s satisfaction, the FDA may issue an approval letter.

An approval letter authorizes commercial marketing of the drug with

specific prescribing information for specific indications.

Even if the FDA approves

a product, it may limit the approved therapeutic uses for the product as described in the product labeling, require that warning statements

be included in the product labeling, require that additional studies be conducted following approval as a condition of the approval,

impose restrictions and conditions on product distribution, prescribing, or dispensing in the form of a Risk Evaluation and Mitigation

Strategy, or a REMS, or otherwise limit the scope of any approval.

In addition, under the Pediatric

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is safe and effective.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or

all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some

or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.

Such deferred studies become required post-marketing studies upon approval of the product.

FDA Expedited Review and Approval Programs

FDA has various programs, including Fast Track designation, priority review and breakthrough designation, that are intended to expedite

or simplify the process for the development and FDA review of certain drug products that are intended for the treatment of serious or

life-threatening diseases or conditions, and demonstrate the potential to address unmet medical needs or present a significant improvement

over existing therapy.

The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review

be eligible for a Fast Track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat

a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need.

The FDA will determine

that a product will fill an unmet medical need if the product will provide a therapy where none exists or provide a therapy that may

be potentially superior to existing therapy based on efficacy, safety, or public health factors.

If Fast Track designation is obtained,

drug sponsors may be eligible for more frequent development meetings and correspondence with the FDA.

In addition, the FDA may initiate

review of sections of an NDA before the application is complete.

This “rolling review” is available if the applicant provides

and the FDA approves a schedule for the remaining information.

A Fast Track product is also eligible to apply for accelerated approval

and priority review.

FDA may give a priority review designation to drugs that are intended to treat serious conditions and, if approved, would provide significant

improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions.

A priority review means

that the goal for the FDA is to review an application within six months, rather than the standard review of ten months under current

PDUFA guidelines, of the 60-day filing date for new molecular entities.

sponsor can also request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined

as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition,

and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more

clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

Drugs designated as breakthrough

therapies are eligible for the Fast Track designation features as described above, intensive guidance on an efficient drug development

program beginning as early as Phase 1 trials, and a commitment from the FDA to involve senior managers and experienced review staff

in a proactive collaborative, cross-disciplinary review.

if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for

qualification or decide that the time period for FDA review or approval will not be shortened.

new program to expedite the development of drug products is the Limited Population Pathway for Antibacterial and Antifungal Drugs, or

LPAD, which was passed as part of the 21 st Century Cures Act.

LPAD allows for the FDA’s determination of safety and

effectiveness to reflect the risk-benefit profile of the drug in the intended limited population, taking into account the severity, rarity,

or prevalence of the infection and the availability of alternative treatments in the limited population.

Under LPAD, a sponsor may request

drug approval for an antibacterial or antifungal drug if the drug is intended to treat a serious life-threatening infection in a limited

population of patients with unmet needs.

The drug may be approved for the limited population notwithstanding a lack of evidence to fully

establish a favorable benefit-risk profile in a broader population.

The FDA must provide prompt advice to sponsors seeking approval under

LPAD to enable them to plan a development program.

If approved under LPAD, certain post-marketing requirements would apply, such as required

labeling and advertising statements and pre-distribution submission of promotional materials to FDA.

If after approval for a limited

population, a product receives a broader approval, the FDA may remove such post-marketing restrictions.

While a drug may only be approved

for a limited population under this program, the 21 st Century Cures Act states that it is not intended to restrict the prescribing

of antimicrobial drugs or other products by healthcare professionals.

approved drug products, market exclusivity provisions under the FDCA provide periods of exclusivity, which gives the holder of an approved

NDA limited protection from new competition in the marketplace for the innovation represented by its approved drug.

of the FDCA describes three types of marketing applications that may be submitted to the FDA to request marketing authorization for a

A Section 505(b)(1) NDA is an application that contains full reports of investigations of safety and efficacy.

Special FDA Expedited Review and Approval

The FDA has various programs,

including Fast Track designation, priority review and breakthrough designation, that are intended to expedite or simplify the process

for the development and FDA review of certain drug products that are intended for the treatment of serious or life-threatening diseases

or conditions, and demonstrate the potential to address unmet medical needs or present a significant improvement over existing therapy.

The purpose of these programs is to provide important new drugs to patients earlier than under standard FDA review procedures.

To be eligible for a Fast

Track designation, the FDA must determine, based on the request of a sponsor, that a product is intended to treat a serious or life-threatening

disease or condition and demonstrates the potential to address an unmet medical need.

The FDA will determine that a product will fill

an unmet medical need if the product will provide a therapy where none exists or provide a therapy that may be potentially superior to

existing therapy based on efficacy, safety, or public health factors.

If Fast Track designation is obtained, drug sponsors may be eligible

for more frequent development meetings and correspondence with the FDA.

In addition, the FDA may initiate review of sections of an NDA

before the application is complete.

This “rolling review” is available if the applicant provides and the FDA approves a schedule

for the remaining information.

A Fast Track product is also eligible to apply for accelerated approval and priority review.

For approved drug products,

market exclusivity provisions under the FDCA provide periods of exclusivity, which gives the holder of an approved NDA limited protection

from new competition in the marketplace for the innovation represented by its approved drug.

Section 505 of the FDCA

describes three types of marketing applications that may be submitted to the FDA to request marketing authorization for a new drug.

Section 505(b)(1) NDA is an application that contains full reports of investigations of safety and efficacy.

A Section 505(b)(2)

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Limited changes must be pre-approved by the FDA via a suitability petition.

years of exclusivity are available to New Chemical Entities, or NCEs.

A NCE is a drug that contains no active moiety that has been approved

by the FDA in any other NDA submitted under Section 505 of the FDCA.

An active moiety is the molecule or ion, excluding those appended

portions of the molecule, that cause the drug to be an ester, salt, including a salt with hydrogen or coordination bonds, or other noncovalent

derivatives, such as a complex, chelate, or clathrate, of the molecule, responsible for the physiological or pharmacological action of

the drug substance.

During the exclusivity period, the FDA may not accept for review an ANDA or a 505(b)(2) NDA application submitted

by another company that contains the previously approved active moiety, except that an ANDA or 505(b)(2) that contains a certification

that the patents listed by the NCE sponsor in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, or

Orange Book, are invalid or will not be infringed by the manufacture, use, or sale of the drug product for which approval is sought,

may be submitted one year before NCE exclusivity expires.

Five-year exclusivity will also not delay the submission or approval of a 505(b)(1)

however, an applicant submitting a 505(b)(1) NDA would be required to conduct or obtain a right of reference to all the pre-clinical

studies and adequate and well-controlled clinical trials necessary to demonstrate safety and efficacy.

FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations,

other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval

of the application, for example, new indications, dosages or strengths of an existing drug.

This three-year exclusivity covers only the

conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving NDAs or ANDAs for drugs

containing the original active agent.

exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment

of an additional six months of exclusivity to the term of any existing exclusivity for the product, such as NCE exclusivity.

This six-month

exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

The data do not need to show the product to be effective in the pediatric population studied;

rather, if the clinical trial is deemed

to fairly respond to the FDA’s request, the additional protection is granted.

If reports of requested pediatric studies are submitted

to and accepted by the FDA within the required time frames, whatever statutory or regulatory periods of exclusivity that cover the drug

Five years of exclusivity

are available to New Chemical Entities, or NCEs.

A NCE is a drug that contains no active moiety that has been approved by the FDA in

any other NDA submitted under Section 505 of the FDCA.

An active moiety is the molecule or ion, excluding those appended portions of

the molecule, that cause the drug to be an ester, salt, including a salt with hydrogen or coordination bonds, or other noncovalent derivatives,

such as a complex, chelate, or clathrate, of the molecule, responsible for the physiological or pharmacological action of the drug substance.

During the exclusivity period, the FDA may not accept for review an ANDA or a 505(b)(2) NDA application submitted by another company

that contains the previously approved active moiety, except that an ANDA or 505(b)(2) that contains a certification that the patents

listed by the NCE sponsor in FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, or Orange Book, are

invalid or will not be infringed by the manufacture, use, or sale of the drug product for which approval is sought, may be submitted

one year before NCE exclusivity expires.

Five-year exclusivity will also not delay the submission or approval of a 505(b)(1) NDA;

an applicant submitting a 505(b)(1) NDA would be required to conduct or obtain a right of reference to all the pre-clinical studies and

adequate and well-controlled clinical trials necessary to demonstrate safety and efficacy.

The FDCA also provides three

years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than

bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the

application, for example, new indications, dosages or strengths of an existing drug.

This three-year exclusivity covers only the conditions

of use associated with the new clinical investigations and does not prohibit the FDA from approving NDAs or ANDAs for drugs containing

the original active agent.

Pediatric exclusivity is

another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional

six months of exclusivity to the term of any existing exclusivity for the product, such as NCE exclusivity.

This six-month exclusivity

may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data.

do not need to show the product to be effective in the pediatric population studied;

rather, if the clinical trial is deemed to fairly

respond to the FDA’s request, the additional protection is granted.

If reports of requested pediatric studies are submitted to

and accepted by the FDA within the required time frames, whatever statutory or regulatory periods of exclusivity that cover the drug

are extended by six months.

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exclusivity or patent life that contain the same active moiety as that which was studied.

Orphan Drug Act also provides incentives for the development of drugs intended to treat rare diseases or conditions, which generally

are diseases or conditions affecting fewer than 200,000 individuals annually in the United States, or affecting more than 200,000 in

the United States and for which there is no reasonable expectation that the cost of developing and making the drug available in the United

States will be recovered from sales in the United States.

Additionally, sponsors must present a plausible hypothesis for clinical superiority

to obtain orphan designation if there is a drug already approved by the FDA that is intended for the same indication and that is considered

by the FDA to be the same drug as the already approved drug.

The Orphan Drug Act also

provides incentives for the development of drugs intended to treat rare diseases or conditions, which generally are diseases or conditions

affecting fewer than 200,000 individuals annually in the United States, or affecting more than 200,000 in the United States and for which

there is no reasonable expectation that the cost of developing and making the drug available in the United States will be recovered from

sales in the United States.

Additionally, sponsors must present a plausible hypothesis for clinical superiority to obtain orphan designation

if there is a drug already approved by the FDA that is intended for the same indication and that is considered by the FDA to be the same

drug as the already approved drug.

This hypothesis must be demonstrated to obtain orphan drug exclusivity.

If granted, prior to product approval, Orphan Drug Designation entitles a party to financial incentives such as opportunities for grant

funding towards clinical study costs, tax advantages, and user-fee waivers.

In addition, if a product receives FDA approval for the indication

for which it has orphan designation, the product is generally entitled to orphan drug exclusivity, which means the FDA may not approve

any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances, such

as a showing of clinical superiority over the product with orphan exclusivity.

If granted, prior to product

approval, Orphan Drug Designation entitles a party to financial incentives such as opportunities for grant funding towards clinical study

costs, tax advantages, and user-fee waivers.

In addition, if a product receives FDA approval for the indication for which it has orphan

designation, the product is generally entitled to orphan drug exclusivity, which means the FDA may not approve any other application

to market the same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical

superiority over the product with orphan exclusivity.

certain infectious disease products, the above discussed exclusivity periods may be further extended if the product is designated as

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QIDPs are also eligible for Fast Track status and priority review.

Approval Requirements

legal and regulatory requirements also apply after FDA approval to market under an NDA.

These include, among other things, requirements

related to adverse event and other reporting, product tracking and tracing, suspect and illegitimate product investigations and notifications,

product advertising and promotion and ongoing adherence to cGMPs, as well as the need to submit appropriate new or supplemental applications

and obtain FDA approval for certain changes to the approved product, product labeling, or manufacturing process.

FDA can also require

the completion of studies post-approval, such as required studies under PREA.

The FDA also enforces the requirements of the Prescription

Drug Marketing Act which, among other things, imposes various requirements in connection with the distribution of product samples to

The FDA enforces these requirements through, among other ways, review of promotional material submissions, review of adverse

events, review of annual reports, periodic announced and unannounced facility inspections.

FDA also strictly regulates marketing, labeling, advertising, and promotion of products that are placed on the market.

Physicians, in

their independent professional medical judgment, may prescribe legally available products for unapproved indications that are not described

in the product’s labeling and that differ from those tested and approved by the FDA.

Pharmaceutical companies, however, are allowed

to promote their drug products only for the approved indications and in accordance with the provisions of the approved label;

promotion is prohibited, as is false and misleading promotion.

The FDA and other agencies actively enforce the laws and regulations prohibiting

the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant

liability, including, but not limited to, criminal and civil penalties under the FDCA and the civil False Claims Act, or FCA, exclusion

from participation in federal healthcare programs, mandatory compliance programs under corporate integrity agreements, debarment, and

refusal of government contracts.

regulations require that products be manufactured in specific approved facilities and in accordance with cGMP regulations.

expect to continue to rely, on third parties for the production of clinical and commercial quantities of our products in accordance with

cGMP regulations.

These manufacturers must comply with cGMP regulations that require, among other things, quality control and quality

assurance, the maintenance of records and documentation and the obligation to investigate and correct any deviations from cGMP.

Manufacturers

and other entities involved in the manufacture and distribution of approved drugs or biologics are required to register their establishments

with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for

compliance with cGMP requirements and other laws.

Accordingly, manufacturers must continue to expend time, money and effort in the area

of production and quality control to maintain cGMP compliance.

The discovery of violative conditions, including failure to conform to

cGMP regulations, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions

on a product, manufacturer or holder of an approved NDA or BLA, including recall.

approval of a drug is granted, FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained

or if problems occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse

events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may

result in mandatory revisions to the approved labeling to add new safety information, or imposition of additional post-market surveillance

or clinical trials to assess new safety risks.

Post Approval Requirements

Significant legal and regulatory

requirements also apply after FDA approval to market under an NDA.

These include, among other things, requirements related to adverse

event and other reporting, product tracking and tracing, suspect and illegitimate product investigations and notifications, product advertising

and promotion and ongoing adherence to cGMPs, as well as the need to submit appropriate new or supplemental applications and obtain FDA

approval for certain changes to the approved product, product labeling, or manufacturing process.

FDA can also require the completion

of studies post-approval, such as required studies under PREA.

The FDA also enforces the requirements of the Prescription Drug Marketing

Act which, among other things, imposes various requirements in connection with the distribution of product samples to physicians.

FDA enforces these requirements through, among other ways, review of promotional material submissions, review of adverse events, review

of annual reports, periodic announced and unannounced facility inspections.

The FDA also strictly regulates

marketing, labeling, advertising, and promotion of products that are placed on the market.

Physicians, in their independent professional

medical judgment, may prescribe legally available products for unapproved indications that are not described in the product’s labeling

and that differ from those tested and approved by the FDA.

Pharmaceutical companies, however, are allowed to promote their drug products

only for the approved indications and in accordance with the provisions of the approved label;

off-label promotion is prohibited, as

is false and misleading promotion.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of

off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including,

but not limited to, criminal and civil penalties under the FDCA and the civil False Claims Act, or FCA, exclusion from participation

in federal healthcare programs, mandatory compliance programs under corporate integrity agreements, debarment, and refusal of government

FDA regulations require that

products be manufactured in specific approved facilities and in accordance with cGMP regulations.

We rely, and expect to continue to

rely, on third parties for the production of clinical and commercial quantities of our products in accordance with cGMP regulations.

These manufacturers must comply with cGMP regulations that require, among other things, quality control and quality assurance, the maintenance

of records and documentation and the obligation to investigate and correct any deviations from cGMP.

Manufacturers and other entities

involved in the manufacture and distribution of approved drugs or biologics are required to register their establishments with the FDA

and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance

with cGMP requirements and other laws.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production

and quality control to maintain cGMP compliance.

The discovery of violative conditions, including failure to conform to cGMP regulations,

could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions on a product,

manufacturer or holder of an approved NDA or Biologics License Application (“BLA”), including recall.

After approval of a drug

is granted, FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur

after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated

severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions

to the approved labeling to add new safety information, or imposition of additional post-market surveillance or clinical trials to assess

new safety risks.

Other potential consequences include, among other things:

restrictions on the marketing

or manufacturing of the product, complete withdrawal of the product from the market or product recalls; fines, warning letters or

other enforcement-related letters or clinical holds on investigational or post-approval clinical trials; refusal by FDA to approve

pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals; product seizure or detention, or

refusal to permit the import or export of products; injunctions or the imposition of civil or criminal penalties; and consent

decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs; or mandated modification of

promotional materials and labeling and the issuance of corrective information.

individual states may have laws and regulations that we must comply with, such as laws and regulations concerning licensing, promotion,

sampling, distribution, and reporting.

and Reimbursement

expect to sell DefenCath primarily to inpatient acute-care hospitals and outpatient dialysis clinics.

Reimbursement

For Medicare, inpatient acute-care

hospitals are paid under the inpatient prospective payment system (referred to herein as the “IPPS”).

The IPPS pays a

flat rate based on the average charges across all hospitals for a specific diagnosis, regardless of whether that particular patient costs

more or less.

Under the IPPS, each case is categorized into a diagnosis-related group, or DRG, which is weighted and multiplied by a standardized

amount (updated each year for inflation and other factors), to yield a fixed payment for that DRG and adjusted for hospital-specific factors

(e.g., wages, teaching hospitals) to cover care furnished during the inpatient stay.

Additional, temporary payment is available for new

medical services and technologies called New Technology Add-on Payment, or NTAP, if certain criteria are met.

There are three criteria

required for new technologies to be eligible to receive NTAP:

Product must meet “newness” criteria;

Product must meet “substantial clinical improvement” over existing technologies;

Product must meet certain cost thresholds.

CMS created several alternative

NTAP approval pathways for certain devices that obtain breakthrough designation and drugs that obtain Qualified Infectious Disease

Product, or QIDP, designation from the FDA.

Under these alternative pathways, the new technology need only meet the cost criterion because

CMS assumes that those products meet the newness and substantial clinical improvement criteria.

We submitted an NTAP application

under the alternative pathway for fiscal year (“FY”) 2024 IPPS and received conditional approval from CMS pending FDA marketing

authorization for DefenCath before July 1, 2024.

Based on the information available at the time of the FY 2024 IPPS final rule, CMS determined

the cost per case of DefenCath was $22,815.

Under CMS’ regulations, NTAPs are limited to the lesser of 75% of the average cost of

the technology, or 75% of the costs in excess of the MS-DRG payment for the case.

Accordingly, CMS finalized for FY 2024 $17,111.25 as

the maximum NTAP for a case involving the use of 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.

Given that FDA

approval of the NDA was obtained on November 15, 2023 and prior to the July 1, 2024 deadline, the NTAP for cases involving the technology

will be effective beginning January 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, we 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 us that CMS does not intend to

update the NTAP reimbursement amount until the next review cycle in October 2024.

NTAP is granted for a period

of 2-3 years after the date of FDA approval.

Although NTAP is intended to identify and ensure adequate payment for qualifying new technologies,

it may have a limited effect depending on the DRG assignment after the NTAP period ends.

With established reimbursement in the inpatient

setting, we plan to launch DefenCath in hospitals first while outpatient reimbursement is expected to be effective July 1, 2024 (assuming

TDAPA approval as discussed below).

Reimbursement

On January 25, 2024, CMS determined

that DefenCath should be classified as a renal dialysis service within an existing functional category, and is therefore subject to the

Medicare end-stage renal disease prospective payment system (referred to herein as the “ESRD PPS”).

The ESRD PPS does afford,

however, a transitional drug add-on payment adjustment, or TDAPA, followed by post-TDAPA add-on payment adjustments.

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).

New renal dialysis drugs or biological products that fall within an ESRD PPS functional

category are paid TDAPA unless certain exclusion criteria apply (related to the FDA approval or the NDA classification type).

To be considered

a new renal drug or biologic, the product must be:

to treat or manage a condition(s) associated with ESRD

by the FDA pursuant to Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act or section

351 of the Public Health service Act;

● Commercially

● Assigned a Healthcare Common Procedure Coding System ("HCPCS") code (or have an application submitted);

by CMS as a renal dialysis service.

believe that DefenCath would meet the criterion of being a new renal dialysis product based upon communications received from CMS.

submitted a HCPCS application for a J-code to CMS on December 8, 2023 for DefenCath and CMS has confirmed the application is under review.

We submitted an application for TDAPA on January 26, 2024.

CMS confirmed receipt and advised us in writing that CMS is working toward

a July 1, 2024 effective date for TDAPA, assuming a favorable review.

CMS reserves the right to request more information, and does not

guarantee that the TDAPA application will be approved or will be effective by July 1, 2024.

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).

CMS has recently adopted policies related to the submission of ASP data making TDAPA

conditional in certain circumstances on the continued submission of such data.

Accordingly, it is possible that the duration of TDAPA

could be shortened if the submission requirements of the ASP policy are not met.

When TDAPA ends for new products for which there is

a functional category, CMS does not make any adjustments to the ESRD PPS rate.

we cannot anticipate changes in reimbursement requirements and mechanisms in the coming years, CMS has acknowledged TDAPA payment mechanisms

may be adjusted to encourage innovation for this patient population.

Beginning with calendar year 2024, CMS adopted a new payment adjustment

that follows the TDAPA period which is applied to all ESRD PPS payments for three years.

Following such additional ESRD PPS payment adjustments,

DefenCath would be paid as part of the bundled ESRD PPS rate.

In anticipation that payers

will require that we demonstrate the cost effectiveness of DefenCath as part of the reimbursement review and approval process, we have

submitted posters and abstracts to support our health economic analysis and continue to commission and develop health economic evaluations

to support this review in the context of the prospective use of DefenCath in dialysis.

We may seek CMS reimbursement

for DefenCath in other catheter indications, such as oncology patients and total parenteral nutrition patients, including through (i)

relevant hospital inpatient DRGs, (ii) additional NTAP payments, (iii) outpatient ambulatory payment classifications, or APCs, (iv) the

End-Stage Renal Disease Prospective Payment System, or ESRD PPS, base payment, or (v) under the Durable Medical Equipment, Prosthetics,

Orthotics, and Supplies, or DMEPOS, Fee Schedule, depending on the setting of care.

Coverage and payment under these Medicare benefit

categories is not guaranteed for these additional potential indications.

restrictions on the marketing or manufacturing of the product,

complete withdrawal of the product from the market or product recalls; fines, warning letters or other enforcement-related letters

or clinical holds on investigational or post-approval clinical trials; refusal by FDA to approve pending NDAs or supplements to

approved NDAs, or suspension or revocation of product approvals; product seizure or detention, or refusal to permit the import or

export of products; injunctions or the imposition of civil or criminal penalties; and consent decrees, corporate integrity

agreements, debarment, or exclusion from federal health care programs; or mandated modification of promotional materials and labeling

and the issuance of corrective information.

Moreover, individual states

may have laws and regulations that we must comply with, such as laws and regulations concerning licensing, promotion, sampling, distribution,

and reporting.

Healthcare Regulation

Federal and state healthcare

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federal and state civil and criminal false claims laws, including the civil False Claims Act.

Additionally,

we are subject to state and local law equivalents of the above federal laws, which may be broader in scope and apply regardless of whether

the payer is a governmental healthcare program.

We may also be subject to certain state healthcare laws that may not have a federal parallel,

such as pharmaceutical detailing and disclosure laws and requirements.

Additionally, we are subject to state and local law equivalents of the above federal laws, which may be broader in scope and apply regardless

of whether the payer is a governmental healthcare program.

We may also be subject to certain state healthcare laws that may not have

a federal parallel, such as pharmaceutical detailing and disclosure laws and requirements.

We are subject to federal

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Manufacturers report Average

Sales Price (ASP) data for Part B-covered drugs and biologicals and related items, services, supplies, and products that are paid as drugs

or biologicals.

We also participate in the MDRP and report ASP, Best Price and other metrics related to our participation in such program.

Sales Price (ASP) data for Part B-covered drugs and biologicals and related items, services, supplies, and products that are paid as

drugs or biologicals.

We also participate in the MDRP and report ASP, Best Price and other metrics related to our participation in such

We pay rebates to state Medicaid agencies based on those metrics on Medicaid beneficiary utilization of products.

In addition, we are

required to sell our covered outpatient drugs at or below the 340B Ceiling Price to 340B Covered Entities.

We are also required to discount

our products to authorized users of the Federal Supply Schedule, under which additional laws and requirements apply.

Each of these programs

require submission of pricing data and calculation of discounts and/or rebates pursuant to complex statutory formulas and regulatory guidance,

as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations, and the guidance governing

such calculations is not always clear.

Compliance with such requirements can require significant investment in personnel, systems and

Failure to properly calculate prices, or to offer required discounts or rebates could subject us to substantial penalties including,

but not limited to, potential False Claims Act liability.

CMS continues to issue guidance and rulemaking governing our participation in

the MDRP, and we cannot predict how future guidance or rules would affect our profitability (including the potential for increases in

our overall Medicaid rebate liability and the obligation to charge greatly reduced prices to 340B Covered Entities).

the U.S., the federal and state governments are considering proposals or have enacted legislative and regulatory changes to the healthcare

system that could affect our ability to sell our products profitably.

Among policy makers and payers in the U.S., there is significant

interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding

has been increasing legislative and enforcement interest in the U.S.

we are required to sell our covered outpatient drugs at or below the 340B Ceiling Price to 340B Covered Entities.

We are also required

to discount our products to authorized users of the Federal Supply Schedule, under which additional laws and requirements apply.

of these programs require submission of pricing data and calculation of discounts and/or rebates pursuant to complex statutory formulas

and regulatory guidance, as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations,

and the guidance governing such calculations is not always clear.

Compliance with such requirements can require significant investment

in personnel, systems and resources.

Failure to properly calculate prices, or to offer required discounts or rebates could subject us

to substantial penalties including, but not limited to, potential False Claims Act liability.

CMS continues to issue guidance and rulemaking

governing our participation in the MDRP, and we cannot predict how future guidance or rules would affect our profitability (including

the potential for increases in our overall Medicaid rebate liability and the obligation to charge greatly reduced prices to 340B Covered

In the U.S., the federal

and state governments are considering proposals or have enacted legislative and regulatory changes to the healthcare system that could

affect our ability to sell our products profitably.

Among policy makers and payers in the U.S., there is significant interest in promoting

changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access.

There has been increasing

legislative and enforcement interest in the U.S.

with respect to drug pricing practices.

In particular, there have

been several recent U.S.

Congressional inquiries, hearings and proposed and enacted federal legislation and rules, as well as executive

orders and sub-regulatory guidance that may impact pricing for pharmaceutical products.

In particular, there have been several recent

Congressional inquiries, hearings and proposed and enacted federal legislation and rules, as well as executive orders and sub-regulatory

guidance that may impact pricing for pharmaceutical products.

These initiatives include, among others:

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● implementation

of additional data collection and transparency reporting regarding drug pricing, rebates,

fees and other remuneration provided by drug manufacturers;

of additional data collection and transparency reporting regarding drug pricing, rebates, fees and other remuneration provided by drug

manufacturers;

to rules associated with ESRD PPS Transitional Drug Add-on Payment Adjustment;

revisions to rules associated with the calculation of average sales price;

to rules associated with the calculation of average manufacturer price and best price under

to the MDRP, including through a May 2023 CMS-proposed rulemaking for this program, that

could significantly increase manufacturer rebate liability;

to rules associated with the calculation of average manufacturer price and best price under Medicaid;

to the MDRP, including through a May 2023 CMS-proposed rulemaking for this program, that could significantly increase manufacturer rebate

● implementation

of the inflation Reduction Act of 2022 (Inflation Reduction Act), including provisions that

generally require manufacturers of Medicare Part B and Part D drugs to pay inflation rebates

to the Medicare program if pricing metrics associated with their products increase faster

of the inflation Reduction Act of 2022 (Inflation Reduction Act), including provisions that generally require manufacturers of Medicare

Part B and Part D drugs to pay inflation rebates to the Medicare program if pricing metrics associated with their products increase faster

than the rate of inflation;

elimination of the AKS discount safe harbor protection for manufacturer rebate arrangements

with Medicare Part D plan sponsors;

elimination of the AKS discount safe harbor protection for manufacturer rebate arrangements with Medicare Part D plan sponsors;

● reevaluation

of safe harbors under the AKS.

addition, at the state level, legislatures have increasingly passed legislation and implemented regulations similar to those under consideration

at the federal level, as well as laws designed to control pharmaceutical and biotherapeutic product pricing, including restrictions on

pricing or reimbursement at the state government level, limitations on discounts to patients, marketing cost disclosure and transparency

measures, restrictions or other limitations on patient assistance, and, in some cases, policies to encourage importation from other countries

(subject to federal approval) and bulk purchasing.

addition, the U.S.

Foreign Corrupt Practices Act and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries

from making improper payments for the purpose of obtaining or retaining business.

laws and regulations may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens

In addition, given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject

to the penalty provisions of the pertinent state and federal authorities.

In addition, at the state

level, legislatures have increasingly passed legislation and implemented regulations similar to those under consideration at the federal

level, as well as laws designed to control pharmaceutical and biotherapeutic product pricing, including restrictions on pricing or reimbursement

at the state government level, limitations on discounts to patients, marketing cost disclosure and transparency measures, restrictions

or other limitations on patient assistance, and, in some cases, policies to encourage importation from other countries (subject to federal

approval) and bulk purchasing.

In addition, the U.S.

Corrupt Practices Act and similar worldwide anti-bribery laws generally prohibit companies and their intermediaries from making improper

payments for the purpose of obtaining or retaining business.

These laws and regulations

may affect our sales, marketing, and other promotional activities by imposing administrative and compliance burdens on us.

given the lack of clarity with respect to these laws and their implementation, our reporting actions could be subject to the penalty

provisions of the pertinent state and federal authorities.

Regulatory Requirements

have not made any filings seeking approval for DefenCath outside of the United States.

In order to market any product outside of the

United States, we would need to comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy

and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products.

though we have obtained FDA approval for DefenCath, and more generally, whether or not with FDA approval for a product, we would need

to obtain the necessary approvals by the comparable regulatory authorities of foreign countries before we can commence clinical trials

or marketing of the product in those countries.

The approval process varies from country to country and can involve additional product

testing and additional administrative review periods.

The time required to obtain approval in other countries might differ from and be

longer than that required to obtain FDA approval.

Regulatory approval in one country does not ensure regulatory approval in another,

but a failure or delay in obtaining regulatory approval in one country may negatively impact the regulatory process in others.

and Human Capital Resources

As of March 7, 2024, we employed

82 full-time employees and one part-time employee, who work out of our corporate offices in Berkeley Heights, NJ or work remotely in

various locations throughout the United States and Europe.

We are committed to diversity, equity and inclusion, regardless of gender

or race/ethnicity, or any protected status, and conduct training to reflect our commitment as an organization and build awareness.

invest in our workforce by offering competitive salaries and benefits.

We endeavor to foster a strong sense of ownership by offering

stock options under our stock incentive program.

We have not made any filings

seeking approval for DefenCath outside of the United States.

In order to market any product outside of the United States, we would need

to comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy and governing, among other

things, clinical trials, marketing authorization, commercial sales and distribution of our products.

Employees and Human Capital Resources

As of February 28, 2025 we employed approximately 64 full-time employees

and one part-time employee, who work out of our corporate offices in Berkeley Heights, NJ or work remotely in various locations throughout

the United States..

In December 2024, the company engaged Syneos Health Commercial Services, LLC to build and provide to the Company a

dedicated inpatient field sales force that will exclusively promote DefenCath to hospitals and health systems.

In light of this, the Company

terminated a large percentage of its internal field sales team, which was expected to cover both inpatient and outpatient settings.

The Company also engaged WSI

PBG, LLC, a subsidiary of Golden State Medical Supply, to promote DefenCath to healthcare providers in facilities operated by the Department

of Veterans Affairs and other federal facilities.

These individuals started in the field in early January 2025.

We invest in our workforce

by offering competitive salaries and benefits.

We endeavor to foster a strong sense of ownership by offering stock options under our

stock incentive program.

We also offer comprehensive and benefits for all eligible employees.

We recognize and

support the growth and development of our employees and we provide performance feedback and conduct employee goal and development discussions.

of our employees are subject to a collective bargaining agreement.

We emphasize organizational communication and consider our relationship

with our employees to be strong.

were organized as a Delaware corporation on July 28, 2006 under the name “Picton Holding Company, Inc.” and we changed our

corporate name to “CorMedix Inc.” on January 18, 2007.

Our principal executive offices are located at 300 Connell Drive,

Suite 4200, Berkeley Heights, New Jersey 07922.

Our telephone number is (908) 517-9500.

maintain our websites at www.cormedix.com, www.defencath.com.

and www.crbis.com.

This Annual Report on Form 10-K and all of our filings

under the Exchange Act, including copies of annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K,

and any amendments to those reports, are available free of charge through our website on the date we file those materials with, or furnish

them to, the Securities and Exchange Commission (the “SEC”).

Such filings are also available to the public on the internet

at the SEC’s website at www.sec.gov.

The information contained on, or that can be accessed through, the websites referenced

in this Annual Report on Form 10-K is not a part of, nor shall it be deemed to be, incorporated by reference into this filing or any

of our other filings with the SEC.

Further, the Company’s references to website URLs are intended to be inactive textual references

We recognize and support the growth and

development of our employees and we provide performance feedback and conduct employee goal and development discussions.

None of our employees are

subject to a collective bargaining agreement.

We emphasize organizational communication and consider our relationship with our employees

to be strong.

Corporate Information

We were organized as a Delaware

corporation on July 28, 2006 under the name “Picton Holding Company, Inc.” and we changed our corporate name to “CorMedix

Inc.” on January 18, 2007.

Our principal executive offices are located at 300 Connell Drive, Suite 4200, Berkeley Heights, New

Jersey 07922.

Available Information

We maintain our website at

www.cormedix.com.

This Annual Report on Form 10-K and all of our filings under the Exchange Act, including copies of annual reports on

Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports, are available free of charge

through our website on the date we file those materials with, or furnish them to, the SEC.

Such filings are also available to the

public on the internet at the SEC’s website at www.sec.gov.

The information contained on, or that can be accessed through,

the websites referenced in this Annual Report on Form 10-K is not a part of, nor shall it be deemed to be, incorporated by reference

into this filing or any of our other filings with the SEC.

Further, the Company’s references to website URLs are intended to be

inactive textual references only.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business