My Stock of the Week is CorMedix (CRMD). We highlighted CRMD on September 7, and it has performed poorly since then. However, it is jumping higher on October 20 after significantly increasing its revenue guidance for the remainder of 2025.
After years of development, CRMD received FDA approval for its DefenCath product in November 2023 and launched it in April 2024. DeFenCath is a solution of tarolidine and heparin that is injected into a catheter after each use. This injection blocks infection caused by catheters used in kidney dialysis. Treating infection in kidney dialysis is very costly, at an estimated cost of around $63,000. There are roughly 19 million outpatient dialysis treatments per year, so this is a very big market.
The company is currently in Phase 3 trials seeking FDA approval for an additional use for feeding tubes that are inserted into the GI tract. This market is estimated to be about $200 million. There are several other catheter applications that are suitable for the DefenCath product.
Sales of DefenCath have exploded, going from $700k in the first quarter of 2024 and hitting $38 million in the June 2025 quarter. This growth is driven primarily by agreements with Large Dialysis Organizations (LDOs) such as Fresenius (FMS) and DaVita (DVA), which control 91% of the US dialysis market. CRMD is now estimating DefenCath sales of $200 million to $215 million in 2025.
Shortly after announcing its supply deal with an LDO, CRMD surprised the market with a spot secondary of 6.6 million shares at an average price of $12.87 on June 27. The stock dropped sharply on the news and quickly broke pricing due to concerns about dilution.
However, on August 7, it became clear that this offering was done in preparation for the acquisition of Melinta Therapeutics for $300 million. This deal was done to broaden CRMD's offerings beyond DefenCath. Melinta has six infectious disease products and an important phase III study for Rezzayo expected in the first half of 2026. There are also several overlaps in marketing and sales that will make the deal accretive to earnings.
On September 2, CRMD announced that it sees pro forma revenues of $325 million to $350 million in 2025 and pro forma EBITDA of $165 million to $185 million.
On October 20, CRMD announced it sees third-quarter earnings of $100 million and guides to at least $375 million for the year.
CRMD had revenues in the first half of 2025 of $79 million. This is a huge increase in revenues for the second half of the year and implies eps in the range of $0.38 to $0.45 or more in the next two quarters, but there is a high level of uncertainty due to the costs of merging the enterprises. Analysts have yet to fully update guidance, but the currently published eps is $1.69 for 2025 and 42% growth to $2.33 in 2026. That is a forward PE of just over five, which is exceptionally low given the high level of eps growth.
CRMD management will need to execute, but the potential here is tremendous. The company will probably need additional cash during the next year, and there are competitors working on a product similar to DefenCath, but currently, CRMD owns the market and has a first-mover advantage.
The stock has been very volatile and has pulled back sharply over the last week. I suspect this may be due to moves made by Deerfield Management Company, which controlled Melinta. Deerfield and other institutional investors are holding $150 million in convertible debt that was used to finance the deal. There is likely some hedging of those positions, putting pressure on the stock.
D. Boral Capital increased its rating on CRMD to "Buy" following the increased guidance and put a $14 target on the stock. The analyst commented "A combination of the pullback in the stock and strong Defend Cath revenues is a critical driver. We model multiple indications for Defend Cath. We select a 30% discount rate (r) given the small capitalization of the company and the associated risk. We apply these projections to our Free Cash Flow to the Firm (FCFF), discounted EPS (EPS), and sum-of-the-parts (SOP) models, which are equal-weighted, averaged, and rounded to the nearest whole number to derive our 12-month price target of $14.00."
Technically, the stock hit support at $10 on Friday and is in position to move back over its 5-day and 200-day simple moving average.
As always, we are aggressively trading the stock and are looking to take advantage of further pullbacks in front of the third quarter report.
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