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DATE

Thursday, May 14, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Joseph Todisco
  • Executive Vice President and Chief Operating Officer — Elizabeth Masson-Hurlburt
  • Executive Vice President and Chief Financial Officer — Susan Blum

TAKEAWAYS

  • Net Revenue -- $127.4 million, comprised of $97.5 million from DefenCath and $29.9 million from the Melinta portfolio, compared with $39.1 million in the prior-year period.
  • Adjusted EBITDA -- $70 million, excluding one-time acquisition-related and reorganization costs, stock-based compensation, and the nonrecurring revenue adjustment, compared with $23.6 million last year.
  • Net Income -- $38.6 million, or $0.48 per basic share and $0.43 per diluted share, up from $20.6 million, or $0.32 per basic share and $0.30 per diluted share, in the previous year.
  • Operating Expenses -- $41.5 million, including $7.2 million in R&D, $12.5 million in selling and marketing, and $21.7 million in G&A, reflecting scale from the Melinta acquisition and increased development activity.
  • Nonrecurring Revenue Adjustment -- First quarter DefenCath sales included a one-time $9 million favorable change in estimate related to sales allowances, primarily Medicaid rebates and product returns.
  • Cash and Cash Equivalents -- $178.1 million at quarter end, with cash from operating activities of $42.4 million and $11.1 million used for share repurchases, leading to a net $33.3 million increase in cash.
  • Revised Full Year Net Revenue Guidance -- Increased to a range of $325 million to $345 million, reflecting "strong first quarter execution and continued confidence in underlying demand trends" as stated by Joseph Todisco.
  • Revised Full Year Adjusted EBITDA Guidance -- Raised to a range of $115 million to $135 million from previous guidance.
  • DefenCath Full Year Revenue Guidance -- Increased to $175 million to $195 million, based on "existing customer run rates" and excluding potential upside from new customers or Medicare Advantage contracting.
  • DefenCath Back Half 2026 Outlook -- Management expects sales variability due to expiration of initial TDAPA reimbursement and transition to post-TDAPA add-on phase by CMS, with higher anticipated net selling prices per unit in 2027.
  • DefenCath Q2 Revenue Expectation -- Joseph Todisco said, "we're assuming it's going to be a 2-month quarter and expect it to be in the range of about $60 million, right, give or take, a couple of million" due to shelf stock adjustment and price dynamics.
  • REZZAYO Phase III Results -- The ReSPECT study met its primary endpoint for fungal-free survival at day 90 (60.7% for REZZAYO vs 59% for standard regimen), showing non-inferiority, and displayed "favorable profile in multiple secondary endpoints," per Elizabeth Masson-Hurlburt.
  • REZZAYO Commercial Launch Timeline -- FDA sNDA submission planned for the second half of 2026, with commercial launch preparation and expected incremental spend reflected in full year cash OpEx guidance of $145 million to $160 million.
  • TPN Phase III Study Status -- Enrollment remains at about one-third of the 90 patients required for interim analysis, with study completion now trending into 2028; company is pursuing a protocol amendment and additional sites to accelerate progress.

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RISKS

  • Expiration of initial TDAPA reimbursement for DefenCath in mid-2026 may lead to sales variability and price erosion in the second half of the year; management's guidance reflects these expected changes.
  • TPN Phase III study enrollment remains slow, and with cumulative infections lower than anticipated, completion timing has extended into 2028; company is dependent on FDA approval for revised inclusion criteria to accelerate enrollment.
  • Nonrecurring $9 million favorable adjustment in the first quarter for DefenCath is not expected to repeat, affecting quarter-over-quarter comparisons.

SUMMARY

CorMedix Inc. (CRMD +5.73%) reported a significant year-over-year increase in net revenue and adjusted EBITDA, driven by enhanced DefenCath demand and a full quarter contribution from the Melinta acquisition. Management raised full year net revenue and adjusted EBITDA guidance on strong first quarter execution, also elevating guidance for DefenCath revenue due to higher patient utilization among existing customers. Progress on the REZZAYO prophylaxis program included positive Phase III results and a clear FDA submission timeline, while operating expenses and headcount are projected to increase to support anticipated commercial activities. The TPN Phase III trial faces protracted enrollment, with completion not expected before 2028, and relies on impending FDA feedback for improved recruitment.

  • Management stated that "the overwhelming majority" of DefenCath patients are Medicare fee-for-service, with Medicare Advantage expansion considered a substantial long-term opportunity.
  • Cash from operating activities was partly offset by $11.1 million of share repurchases, evidencing active capital returns amid strong cash generation.
  • The reported tax rate approximates 28%, reflecting the federal and blended state statutory rates; use of NOLs is expected to reduce actual tax payments despite GAAP reporting conventions.
  • The ReSPECT trial for REZZAYO demonstrated non-inferiority on the primary endpoint and secondary advantage in treatment-emergent adverse events, with NDA transfer from Mundipharma to CorMedix contingent on sNDA approval.
  • Guidance for DefenCath and overall revenues excludes any upside from new customer acquisition or future Medicare Advantage contracts, which management describes as "actively working hard to pursue."

INDUSTRY GLOSSARY

  • TDAPA: Transitional Drug Add-on Payment Adjustment—temporary Medicare reimbursement mechanism for new dialysis drugs until inclusion in the base rate.
  • TPN: Total Parenteral Nutrition—the intravenous administration of nutrients, typically used in patients with impaired gastrointestinal function.
  • CLABSI: Central Line-Associated Bloodstream Infection—a primary clinical endpoint measuring infection rates in patients with central venous catheters.
  • CRBSI: Catheter-Related Bloodstream Infection—an infection occurring in patients with indwelling catheters, targeted by DefenCath.
  • sNDA: Supplemental New Drug Application—a regulatory submission seeking label expansion for an approved product.
  • Baxdela: An antibiotic product partnered with BARDA, mentioned in R&D context.
  • BARDA: Biomedical Advanced Research and Development Authority—a U.S. government agency supporting countermeasure development.
  • SAR: Standard Antifungal Regimen—the control arm in the REZZAYO Phase III ReSPECT study.
  • ReSPECT: A Phase III clinical trial evaluating REZZAYO for prophylaxis of invasive fungal disease.
  • NDA: New Drug Application—regulatory application to FDA for market authorization of a pharmaceutical.
  • Mundipharma: CorMedix's global development partner for REZZAYO, holding the initial U.S. NDA.

Full Conference Call Transcript

Joe Todisco, Chairman and Chief Executive Officer of CorMedix. And he is joined by Liz Hurlburt, EVP and Chief Operating Officer; and Susan Blum, EVP and Chief Financial Officer. In addition, Beth Zelnick Kaufman, EVP and Chief Legal and Compliance Officer and Corporate Secretary; Mike Seckler, EVP and Chief Commercial Officer; and Dr. Matt David, EVP and Chief Business Officer, are also on the line and will be available during the Q&A session. Before we begin, I would like to remind everyone that during the call, management may make what are known as forward-looking statements within the meaning set forth in the Private Securities Litigation Reform Act of 1995.

These statements are statements other than statements of historical fact regarding management's expectations, beliefs, goals and plans about the company's prospects and future financial position. Actual results may differ materially from the estimates and projections on which these statements are based due to a variety of important factors, including the risks and uncertainties described in greater detail in CorMedix's filings with the SEC, which are available free of charge at the SEC's website or upon request from CorMedix. CorMedix may not actually achieve the goals or plans described in these forward-looking statements, and investors should not place undue reliance on these statements. CorMedix does not intend to update these forward-looking statements, except as required by law.

During this call, the company will discuss certain non-GAAP measures of its performance. GAAP to non-GAAP financial reconciliations and supplemental financial information are provided in CorMedix's earnings release and the current report on Form 8-K filed with the SEC. This information is also available on the Investor Relations section of CorMedix' website. At this time, it is now my pleasure to turn the call over to Joe Todisco, Chairman and Chief Executive Officer of CorMedix. Joe, please go ahead.

Joseph Todisco: Thanks, Dan. Good morning, everyone, and thank you for joining us on this call. CorMedix is entering 2026 with strong momentum across our core priorities, delivering durable DefenCath utilization growth, advancing high-value pipeline opportunities and driving meaningful profitability and cash generation. These elements together form the foundation of our long-term value creation strategy. We announced this morning first quarter net revenue of $127.4 million, significantly above Street consensus and adjusted EBITDA of $70 million. Susan will provide more granular details of first quarter financial results, but I am proud of the team's execution, which led to this fantastic performance.

As a result of our Q1 performance as well as other market intelligence, we are increasing our full year financial guidance for net revenue from the previously announced range of $300 million to $320 million to a revised range of $325 million to $345 million-- the increase in guidance reflects strong first quarter execution and continued confidence in underlying demand trends while incorporating expected variability in DefenCath sales in the second half of 2026 as we transition through reimbursement dynamics. We're also raising our full year adjusted EBITDA guidance from the previous range of $100 million to $125 million to a new range of $115 million to $135 million.

DefenCath variability in the back half of 2026 is the result of the expiration of our initial TDAPA reimbursement and the transition to the post-TDAPA add-on phase of reimbursement by CMS. Based on current CMS calculation methodology, the company expects a significant increase in the post-TDAPA add-on amount in 2027 compared to the second half of 2026, which is expected to produce a higher net selling price per unit in 2027 compared to our current estimates for Q3 and Q4 of this year. Our primary objective for Q3 and Q4 is to maintain or grow existing patient utilization heading into 2027.

Based upon our first quarter performance and feedback from existing customers, we are raising our full year DefenCath guidance from the previously announced $150 million to $170 million range to a new range of $175 million to $195 million. This guidance is based on existing customer run rates and does not include potential upside from new customers or any new volumes that result from potential successful contracting with Medicare Advantage, both of which we are actively working hard to pursue. Despite pending TDAPA expiration, we continue to see DefenCath evolving into a standard of care therapy within its target population, supported by strong clinical value and increasing adoption.

It's worth noting that our 3 current largest customers for DefenCath have either recently published or presented information demonstrating the positive clinical impact that DefenCath has had on their patients' infection and/or CRBSI-related hospitalization rates or made similar public comments related to the positive impact DefenCath has had in their clinics. In addition to strong Q1 financial performance, we were also excited to recently announce the preliminary top line clinical results from the ReSPECT study, a Phase III clinical study evaluating REZZAYO for the prophylaxis of invasive fungal disease in adult immunosuppressed patients undergoing allogeneic bone and marrow transplant.

As Liz will explain in more detail, we believe the top line results position REZZAYO to become an attractive option for clinicians for prophylaxis of IFD, and we will now begin to work together with our global partner to prepare for FDA submission of the sNDA in the second half of this year and plan for a potential commercial launch in 2027. With respect to commercial readiness and as we begin to prepare our commercial infrastructure for a potential launch of REZZAYO for prophylaxis, we expect to incur incremental spend in the back half of this year, including the anticipated addition of between 15 to 20 incremental headcount across both commercial and medical.

This increase in resources and operating spend is reflected in our full year cash OpEx guidance of $145 million to $160 million. As a reminder, our cash OpEx guidance excludes noncash charges such as stock-based compensation. I'd now like to turn the call over to our Chief Operating Officer, Liz Hurlburt, to provide an update on clinical activities. Liz, please go ahead.

Elizabeth Masson-Hurlburt: Thank you, Joe, and good morning, everyone. As Joe mentioned, we were delighted to announce preliminary top line results of the ReSPECT study at the end of April. The ReSPECT study met its primary endpoint for FDA of fungal-free survival at day 90, showing non-inferiority versus the standard antifungal regimen with 60.7% fungal-free survival at day 90 for REZZAYO compared to 59% for the standard antifungal regimen or SAR. Importantly, we believe top line results demonstrate that REZZAYO has comparable efficacy to SAR against invasive fungal infections from all 3 measured pathogens, Candida, Aspergillus and Nosocomial.

In addition, results showed a favorable profile in multiple secondary endpoints, most notably treatment-emergent adverse events leading to dose reduction, interruption or withdrawal of study drug and study discontinuation. As we stated previously, the objective with the ReSPECT study was to show comparable efficacy to the standard of care while also demonstrating a better overall safety profile with regards to drug-drug interactions and toxicity. We believe this study has achieved that objective and that the results position REZZAYO as a differentiated prophylactic therapy with a meaningful commercial opportunity. It's important to remember that this was a global study conducted by our partner, Mundipharma, who owns global IP rights and will pursue regulatory approvals outside of the United States.

Mundipharma is currently the holder of the U.S. NDA filing and under the terms of our agreement, transfers ownership of the NDA to CorMedix following approval of an sNDA for the prophylaxis indication. As such, the parties must work together on the publication of data and any submissions to FDA. Currently, the parties expect to hold a pre-NDA meeting with FDA in the coming weeks and to submit the sNDA in the second half of 2026. Shifting gears to our Phase III TPN study. Despite efforts to increase study enrollment, total enrollment remains at about 1/3 of the total number of patients needed for an interim analysis of 90 patients.

The adaptive design of the NUTRI-GAURD study allows for a minimum of 90 and maximum of 200 participants based on the incidence rate of CLABSI. An interim assessment will be made by the independent data monitoring committee after 15 participants have experienced a CLABSI event. In addition, cumulative infections have shown to be lower than our pre-study estimates, which also impacts our statistical projections for study timing. Based on these 2 factors, study completion timing is now trending into 2028. We are actively taking steps to accelerate this time line. Most importantly, we intend to open additional clinical sites as well as submit a protocol amendment to FDA, which, if approved, should support expanded inclusion criteria and broader enrollment.

We will continue to update on progress as we move throughout the year. I'd now like to turn the call over to Susan to discuss the company's first quarter financial results and financial position. Susan?

Susan Blum: Thanks, Liz, and good morning, everyone. We are pleased with our first quarter results, which reflect strong execution across the business and the benefit of the contribution from the acquired Melinta portfolio. As a reminder, because the Melinta acquisition closed in August 2025, the first quarter of 2026 includes a full quarter of Melinta operations, while the first quarter of 2025 does not. Accordingly, year-over-year comparisons are heavily weighted by the broader product portfolio and relative cost structure of the combined company. We also filed our Form 10-Q this morning, and I encourage you to review it for additional detail and important disclosures. Turning to the numbers.

First quarter 2026 net revenue was $127.4 million compared with $39.1 million in the first quarter of 2025. First quarter revenue included $97.5 million from DefenCath and $29.9 million from the Melinta portfolio. The year-over-year increase was driven primarily by higher sustained DefenCath demand, including the impact of sales to our largest dialysis customer that we onboarded mid last year and the addition of Melinta revenue. First quarter DefenCath sales benefited from a nonrecurring $9 million favorable change in estimate related to certain sales allowances, primarily Medicaid rebates and product returns as noted in our earnings release. However, even excluding this change in estimate, our net revenue was above consensus for the first quarter of 2026.

Operating expenses were $41.5 million in the quarter, including $7.2 million in R&D, $12.5 million in selling and marketing, and $21.7 million in G&A. The increases versus the prior year period reflect the larger combined company, including higher personnel-related costs, more robust commercial and IT infrastructure and a greater level of development activity across the broader portfolio, including a focus on pediatric programs and a biodefense indication for Baxdela, many of which are partnered with BARDA. We are also subject to higher branded prescription fees attributable to the addition of Melinta's commercial products as well as to year-over-year product sales growth.

Year-over-year increases in OpEx were also driven moderately by moderately higher legal fees and our continued investment in the development of DefenCath for the TPN indication. On the bottom line, we recorded net income of $38.6 million or $0.48 per basic share and $0.43 per diluted share compared with net income of $20.6 million or $0.32 per basic share and $0.30 per diluted share in the first quarter of 2025.

In addition to net revenue and operating expenses, EPS was impacted by nonoperating expenses of approximately $25 million associated with the routine quarterly mark-to-market of marketable equity securities and contingent consideration, which reflects the approximate fair value of the future milestone and royalties payable to former Melinta shareholders as well as income tax expense under U.S. GAAP. On a non-GAAP basis, adjusted EBITDA was $70 million for the quarter compared with $23.6 million in the first quarter of 2025. This EBITDA metric excludes onetime acquisition-related and reorganization costs, stock-based compensation and the nonrecurring revenue adjustment this quarter, and it provides additional insight into the strength of our core operating performance.

A reconciliation to the most comparable GAAP measure is included in this morning's earnings release. We ended the quarter with $178.1 million in cash and cash equivalents, excluding restricted cash. During the quarter, we generated cash from operating activities of $42.4 million, which was impacted by large incentive rebate payments made to customers during the first quarter. You'll note a related and significant decline in accrued expenses of approximately $50 million from December 31, 2025, to March 31, 2026, on our balance sheet. Cash flow from operating activities was partially offset by $11.1 million used in cash to repurchase shares under our stock buyback program, driving a $33.3 million increase in cash during the first quarter.

We continue to believe we are well positioned with a strong balance sheet to support our operating priorities and growth initiatives. And now I will turn the call back to Joe for closing remarks. Joe?

Joseph Todisco: Thanks, Susan. I'm very excited about where the company is today and where we have the potential to go. CorMedix has entered 2026 with strong momentum across all 3 pillars of our investment thesis. First, DefenCath continues to exceed expectations despite pending TDAPA expiration, demonstrating strong underlying utilization demand, which we believe positions itself well to become a durable cash-generating franchise post TDAPA. Second, we are advancing a pipeline of high-value late-stage opportunities, including REZZAYO for prophylaxis and DefenCath in TPN, which could meaningfully expand our long-term revenue opportunity.

And third, we've delivered significant profitability and cash generation over the last year, allowing us to reinvest in growth as well as shareholder value creation through stock repurchases while maintaining financial flexibility. We remain confident in the outlook for this year and our path to future growth and sustained profitability. We'd now like to open it up for questions.

Operator: [Operator Instructions] The first question comes from Jason Butler with Citizens.

Jason Butler: Congrats on the quarter. Wondering if you could comment on the trend in revenue that we should expect to see for DefenCath for the second quarter. Obviously, adjusting for the onetime $9 million benefit, should we expect a consistent net price? Are you expecting demand growth? And then to any extent you can comment, what are your updated thoughts on the guidance you gave for DefenCath in 2027?

Joseph Todisco: Thanks, Jason. Appreciate the questions. So I think a couple of things to think about when you think about DefenCath through 2026 to start. First, we did have the $9 million good guy, right, in the first quarter. That's kind of a one-timer. For the second quarter, and I know we mentioned on the last call, it's really for us, a kind of a 2-month quarter. Because as we move into June and given the price dynamic that's going to take effect on July 1, we're going to take a decent shelf stock adjustment in the month of June. Right now, we're accruing for that at about 4 weeks of stock as our largest customer typically holds about 4 weeks.

Some customers hold a little less, so maybe we end up having some favorability there. But we're assuming it's going to be a 2-month quarter and expect it to be in the range of about $60 million, right, give or take, a couple of million. And then for the back part of the year, I think you can kind of just break out the rest of the guidance, spread it across Q3 and Q4 for the back part of the year. For 2027, as we mentioned in the script, we expect to see appreciation in the net selling price as we move into 2027 compared to that third and fourth quarter.

Right now, I think I'm comfortable saying we're affirming the guidance we put out previously for 2027. It's a little bit premature, right? We'd like to see how we move through the year into the third and fourth quarter and would love to be in a position later this year, early next year to take that guidance upwards. I think I'd want to reiterate that, as we mentioned, neither guidance really includes upside from anything we may do with Medicare Advantage or onboarding, potential new customers.

Jason Butler: Really helpful. Thanks Joe. And then can I just a quick follow-up. The TPN trial, can you give us any more color on the changes in the exclusion/inclusion criteria and how that both changes your view on enrollment, but also the patient profile that you'll end up with in the study?

Joseph Todisco: Look, and I'll let Liz comment in a moment. I don't think the patient profile changes during the study. And I really don't want to put out specifics of what criteria we've asked. We've simply asked FDA to amend.

Elizabeth Masson-Hurlburt: Yes. So I think, Jason, right, these are really medically complex patients. I think we did a solid job in estimating the number of infections we anticipated them to have. But when you look at the overall pool of TPN patients, there's really subgroups and subpopulations within that. And the actual group of eligible patients is smaller. And there are a lot of logistical challenges that we've seen with them because they are so medically complex. We are asking FDA to take a look at inclusion criteria to see if we can be a little bit more generous with it without compromising the data.

But I think until we get feedback on that amendment, -- we're going to have to stay quiet on the specifics of it, but we're hopeful, obviously, that enrollment would reaccelerate once -- if that amendment goes through so that we can include more TPN patients that maybe do have some additional comorbidities going on as well.

Joseph Todisco: Yes. And I think it's also worth noting, right, when you have a projection like this on study timing, it's a moment in time, right? And to the extent we are able to increase enrollment, those time lines can shift pretty quickly.

Operator: The next question comes from Roanna Ruiz with Leerink Partners.

Roanna Clarissa Ruiz: A couple for me. First on DefenCath, I noticed you talked about increasing customer run rates. I was curious if you could elaborate a bit more on that? And are there any strategies that you want to use going forward to keep bolstering it?

Joseph Todisco: Sure. Thanks, Rona. Yes, I think when I said increasing run rates, we saw a little bit of an uptick from Q4 to Q1 in terms of utilization, and that was nice to see. That was not something that was in our initial guidance or budget. So we're happy to see that, I guess, patient numbers continue to grow. What we're doing going forward is a lot of the initiatives we talked about, specifically with outreach to Medicare Advantage and opening up that patient pool. Right now, based on data we see, we think we've -- most of our patients, the overwhelming majority are Medicare fee-for-service, probably more than 90% of our patients are in Medicare fee-for-service.

So that's a big opportunity over the long term would be in Medicare Advantage.

Roanna Clarissa Ruiz: Got it. And I have a follow-up on the TPN study. With the amending of the protocol, does that impact the statistical plan at all? And could it actually impact the future label? And are there any steps you're taking to ensure tight trial execution going forward as you expand?

Elizabeth Masson-Hurlburt: Sure. So I'll take on the trial execution. So I pride us that we run these studies in-house. We've got a really robust team that is on top of all of the details of execution on this. A couple of things, right? We are adding additional sites in the U.S. We have 5 additional sites in Turkey being activated over the next 45 days. So we expect to see some enrollment there. In terms of the statistical plan, yes, there would be changes to the statistical plan if the amendment is approved. I do not anticipate potential label changes, but I would say it's really premature to comment on what the label is because data guides the label.

That being said, the intent of the study and what the projected label that we are working towards would be for risk reduction of CLABSI in adult patients with TPN. So I think that would remain the same. And depending on the additional populations that could be included in it, that could potentially expand, but we need to wait for feedback from FDA.

Operator: The next question comes from Leo Timashev with RBC Capital Markets.

Leonid Timashev: Now that you have the top line REZZAYO data in hand, I was just wondering if you could comment on some of the assumptions that you had made before around payer negotiations, expectations for pricing? And if there's any early feedback you've gotten from KOLs as you sort of discussed the data and what your expectations are for utilization?

Joseph Todisco: Thanks, Leo. Just a couple of things. So the full data has not yet been published, right? So we've put out a press release in combination with our partner, Mundipharma, that announces some of the top line results. In the upcoming months, we're going to be working with Mundipharma, to get a more full data package made public. At that time, we'll be able to have conversations with KOLs around the specific data. So we're not really in a position today to have those conversations yet and then really start talking or doing a lot of the things that we're going to be doing around market research for pricing and penetration assumptions.

So I'd say later this year, we can probably give a little bit more color on that.

Operator: The next question comes from Les Sulewski with Truist Securities.

Unknown Analyst: This is Jean on for Les. First one is what specific customer repair actions have followed the recent positive real-world data for DefenCath? And then separately, where do you think -- based on the data you have right now, where do you think REZZAYO could have the most launch friction if you think about hospital protocols, pricing or generics?

Joseph Todisco: Yes. I think I'm going to start with the REZZAYO question, and I'm going to kind of defer to what I had said to Leo is that it's -- we need to have substive conversations once the full data is made public with key opinion leaders and take feedback. We'll be in a position to do that in the next couple of quarters and by the end of the year, be in a better position to kind of give directional guidance of how we think or the direction of the TAM and potential peak sales maybe by the end of the year. And on your first question, I just want to make sure I understand what you had asked.

You asked if the real-world evidence has had any customer or feedback impact. Is that what you had asked?

Unknown Analyst: Yes, just positive developments on the customer or payer front after the publications.

Joseph Todisco: Well, look, I mean, it's been positively received all around, right? And not just on the real-world evidence that U.S. Renal Care has published, but our other customers as well. IRC has put out some public information around the significant impact that DefenCath has had in their clinics. Fresenius has made public statements, right, on their recent earnings call about the value of DefenCath in their clinics. So we're happy about what we are seeing play out in real time from a clinical standpoint in terms of the utility of the product. We're using all of that information in discussions. When you talk about payers, it's really Medicare Advantage, right?

We're using all of that information in our ongoing discussions with the EMA plans.

Operator: The next question comes from Brandon Folkes with H.C. Wainwright.

Brandon Folkes: Congrats on a really good quarter. Maybe just one for me. Given the success of REZZAYO and prophylactic, do you still place a high priority in bringing in additional assets over the next 12 to 18 months? It seems like Talphera will read out potentially late '26 or '27. Has the bar changed in terms of bringing in additional assets given that the internal opportunities are a lot more derisked given the positive REZZAYO data from here?

Joseph Todisco: No. I mean, I wouldn't say it changed. I'd say it's actually the other way, right? I think it's actually even more important to find things that are complementary to where we potentially see REZZAYO sales deployment, right, in those hematology/oncology clinics, bone marrow transplant centers. So looking for products that could potentially be complementary in that space is definitely a priority.

Operator: The next question comes from Serge Belanger with Needham & Company.

Serge Belanger: A couple of REZZAYO questions from us. The first one, I know we have a pre-NDA meeting planned ahead of potential sNDA filing in the second half of this year. Just curious at this point, if you expect that you'll require more than the trial generated in the ReSPECT trial to file the sNDA? And do you expect coming out of the pre-NDA meeting, you'll have some clarity on what the potential label of the label expansion could look like?

Joseph Todisco: Look, I'll let Liz give her feedback. I think from a label standpoint, we won't have that feedback, right, until later on in the process. And I think in terms of your first question, that's really what the pre-NDA meeting is for, Serge, is to kind of get confirmation from FDA that the data that we have from -- in terms of the ReSPECT study and then other supportive data is sufficient, right, to support the submission of the NDA. Anything to add?

Elizabeth Masson-Hurlburt: Yes. No, I would agree. Just again, Monday is the marketing authorization holder here. They are leading regulatory activities at this point in concert with us. But I would say, once we have initial meetings with FDA and get that feedback, the team will certainly strategize on next steps, but it would be premature to comment on the label, certainly before the full data set is available.

Operator: The next question comes from Jason Kolbert with D. B.

Jason Kolbert: A couple of questions. I'm struggling a little bit on the DefenCath guidance and the numbers. If I take the $97 million and I subtract the onetime payment and I kind of annualize that out for the rest of the quarters, I come very close to the full year guidance without the Melinta product. So I'm trying to understand how much of the quarter number is inventory versus how much is real use? And what's the normalized run rate for DefenCath in these patients?

Joseph Todisco: So Jason, and I think I really kind of addressed this with Jason Butler's first question from Citizens. I guess, first, you have to understand the nature of TDAPA, right? And our TDAPA is going to expire on June 30, which is going to move us into a bundled payment system for Q3 and 4. As we've said on previous calls, we're going to take some price erosion in Q3 and 4 with the goal of maintaining patient volumes. When you talk about inventory, the inventory turnover is pretty quick, right? So at most, as I said, our largest customer, we believe, holds about 4 weeks of stock on hand. Others are in the 2- to 3-week range.

The reason you can't just straight line, right, the 88 across is because, as I said, the second quarter, we're going to have that shelf stock adjustment in June, right? So we expect utilization to remain pretty strong, and we'll take some price erosion in June, right, in advance of moving into the back part of the year, right? So that's kind of how you should think about the guidance. And then in 2027, right, as we said, we expect to kind of step back up in price across the same utilization, which will produce a higher revenue amount in '27. So that's how you should be thinking about DefenCath trajectory.

Jason Kolbert: Okay. I mean I'll continue to look at the numbers, but it still seems like a pretty big drop-off is going to be required in order to stay in your guidance, not go above it. Can you talk about the tax rate, too? I was surprised. The tax rate seemed pretty high. Were there not a lot of offsets applied to it? And what's the normalized tax rate going forward?

Susan Blum: So our tax rate is essentially the statutory tax rate, the federal rate plus a blended rate for state taxes. And the GAAP rate is just that. It's about 28%. If you look at the tax expense compared to operating income. So if you exclude the noncash mark-to-market of our marketable equity securities and the mark-to-market of our contingent consideration, it's about 28%. That is a GAAP rate. We do have significant tax attributes, most prominently NOLs that will reduce the taxable income that we pay -- the taxes that we pay. But the GAAP rate is -- you can think about it as a statutory rate. We don't have a lot of transactions that result in permanent differences.

Jason Kolbert: Congrats on the numbers.

Operator: This concludes our question-and-answer session. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.