What happened
Shares of CorMedix (CRMD 2.31%) were down more than 21% as of noon ET on Thursday. The shares fell after the company announced a stock sale. The healthcare stock is down more than 5% so far this year.
So what
The stock sale was actually a double whammy of dilution for investors of the pharmaceutical and medical device company. CorMedix is selling 7.5 million shares of common stock at $4 per share, a 21.4% discount at what the stock closed at on Wednesday. The company also is offering prefunded warrants of up to 2.5 million shares at $3.99 per warrant. All together, the sales should bring $40 million in funding to CorMedix.
Now what
CorMedix recently resubmitted a New Drug Application (NDA) for DefenCath to the Food and Drug Administration. The FDA accepted the resubmission on June 21 and set up a six-month review with a Prescription Drug User Fee Act (PDUFA) target action date of Nov. 15.
The therapy is an antibacterial and antifungal solution that is supposed to prevent catheter-related infections in end-stage kidney patients who are receiving dialysis through a catheter. The therapy is already approved in Europe under the brand name Neutrolin. CorMedix, as of the first quarter, said it only had $55.6 million in cash, enough, it said at the time, to fund operations only into the first half of 2024,
The company likely sees the stock sale as a way to help fund operations as it ramps up the regulatory process and possibly, the commercialization of DefenCath. In a phase 3 study, the therapy showed a 71% decrease in catheter-related bloodstream infections, compared to a control group.
