Post written by issapunk
CorMedix (CRMD) is a prime buyout target. I believe they will either partner-up or more likely get bought out. I am going to explain my reasoning why, either way, I think this has the most upside in the market right now.
CorMedix developed a catheter-lock solution which is a solution that helps reduce infections and is called DefenCath (formerly Neutrolin). This is a huge issue in the world and hundreds of thousands of people die from this annually. In fact, more people have died from catheter-related infections in 2020 than from COVID.
4 weeks into their 10 week Phase 3 trial, it was halted due to efficacy. Meaning, the board saw all the needed results and it was so convincing that there was no need to continue the trial. The stock went from $.34 to $.80 the next day. The P Value is 0.0006 from the trial – over 1000 times better than the P Value necessary to equate this to a “successful” trial.
About 18 months ago, CorMedix conducted a reverse-split (5-1) to get the price over $5 and entice institutions and hedge funds to buy in much heavier. Most funds don’t touch stocks unless they are over $5.
Right now, it is trading at $5.66, which is $1.15 pre-split. The Market Cap is only $177 million. The market for Hemodialysis catheter locks is over $1 billion. For Oncology and other indications, it brings it to over $5 billion.
Many believe the FDA will approve this for all indications, which will be a HUGE deal. I think this company will be bought out by big pharma.
Some facts and reasons why I think this is so bullish and a possibility of buy out or substantial partnership:
- P Value of 0.0006 is so amazing, I cannot overstate how important this data point is to the company and, more importantly, the FDA.
- The company received Priority Review from the FDA and Fast Track status – which puts them basically ahead of the line for the FDA to review.
- The NDA was accepted by the FDA at the end of August.
- The PDUFA Date (date the FDA will decide approval by) is February 28th.
- The product is currently approved and on sale in Europe, but they use an entirely different process for catheter lock solutions and this just does not fit into their model, so it does not sell well there at all – completely different story in the US and I can go into detail on what the differences are and why it is a non-factor here.
- The Board of Directors is filled with people over the age of 70 and they keep buying.
- Their new CFO has zero CFO experience, but experience in banking in Mergers and Acquisitions.
- New member just joined the board, Paulo Castro, and the PR said “We are excited about his experience as CEO of Amylin Pharmaceuticals” – he helped get Amylin bought out for $7 billion. He was the president of 2 other big pharma companies, each worth over $300 billion. He did not join the company for peanuts.
- Cormedix said they plan to hire a team of 50 sales people to being selling the product – no job listings anywhere and no where to apply – I work in staffing and there is no way they are planning to do this and have it ready by February
- Upon approval, they have 10.5 years of EXCLUSIVITY – meaning, only they can sell the product. Very attractive to Pfizer, who has the edge on the catheter-lock $5 billion annual market at the moment.
- I believe this is a huge reason this will be bought out – 10.5 year exclusivity clock starts the DAY DefenCath is approved. Cormedix can’t waste time building a sales team – a company like Pfizer or J&J will want to buy this ASAP so they receive the entire 10.5 year time-frame to dominate the market.
- JMP set a price target of $22 today (9/29/20200).
- Truist Bank set a price target of $20 last week.
- The CEO, Khoso Baluch, states on every earnings call that they will “maximize shareholder value” and are always looking to “enter strategic partnerships” – they have indicated they will absolutely be looking for partners to help market Oncology and other indications of the product’s market
- This is VERY important – they received the right to go after LPAD – which allowed them to end their trial and not conduct another Phase 3 Trial. This is a very new process the FDA has rolled out to help drugs and products that have life-saving capabilities to receive approval through a much more streamlined and faster process. It cuts red tape. It is not as good as regular approval, because the company will need to have certain info on the labels – think about cigarette packaging with warnings on it etc. It will allow them to sell the drug but not to the extent full approval would most likely allow. What is important here is this allows Cormedix to receive approval through either the regular means OR through LPAD – basically gives them another shot at approval if the committee is nervous about approving a product that had less trials than a typical product would. But the FDA is really behind the LPAD process and Cormedix is the 2nd company ever to have a shot at receiving it – the FDA wants other companies to go after this and to make it attractive, so it is self-serving of them to approve DefenCath as a good example and case study.
- The market is $1 billion for hemodialysis, which is what the trial was done for, but their Chief Medical Officer at Cormedix stated “a catheter is a catheter” when asked if he expects the FDA to just approve for all indications.
- If approved for all indications, the market goes from $1 billion annually, to over $5 billion.
- Institutional Ownership has grown to over 60%!!!!
- Insiders Buying has been very active in the past month and no insider has sold for over 2 years.
Should you invest in CorMedix (CRMD)?
Shares of CorMedix (CRMD) appear to be a very good investment option, the Money Midnight Indicator is expecting its price to increase considerably in the next several years. The majority of the metrics point to this investment being highly attractive.
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