Good morning and welcome to the CoreMedix third quarter 2026 earnings and corporate update conference call. Today's conference call is being recorded. There will be a question and answer session at the end of today's presentation and instructions on how to ask a question will be given at that time. At this time, I would like to turn the conference over to Dan Ferry from Life Science Advisors. Please go ahead.

Good morning. and welcome to the Corps Medics third quarter 2026 earnings and corporate update conference call. Leading the call today is Joe Todisco, Chairman and Chief Executive Officer of Corps Medics. And he is joined by Susan Blum, EVP and Chief Financial Officer. In addition, Liz Hurlburt, EVP and Chief Operating and Chief Commercial Officer and Beth Zelnick-Kaufman, EVP and Chief Legal and Compliance Officer and Corporate Secretary 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 CoreMedix filings with the SEC, which are available free of charge at the SEC's website or upon request from CoreMedix. CoreMedix may not actually achieve the goals or plans described in these forward-looking statements, and investors should not place undue reliance on these statements. CoreMedix does not intend to update these forward-looking statements Thank you for joining us. substantially all the assets of Heron Therapeutics, which remains subject to approval by Heron's stockholders, regulatory clearance, and other customary closing conditions. CoreMedix has filed a current report on Form 8K describing the proposed transaction in greater detail. Investors are urged to read it and any other relevant documents CoreMedix files with the SEC carefully and in their entirety because they contain important information about the proposed transactions. At this time, it is now my pleasure to turn the call over to Joe Todisco, Chairman and Chief Executive Officer of CoreMedix. Joe, please go ahead.

Thanks, Dan. Good morning, everyone, and thank you for joining us on this call. On Monday, we announced the definitive agreement to acquire substantially all of the assets of Heron Therapeutics, encompassing both commercial and pipeline assets that we believe are highly complementary and synergistic with CoreMedix growth strategy in institutional settings of care. As we discussed on Monday, we see four pillars to the strategic rationale for this transaction. First, scale and diversification. The Heron portfolio meaningfully expands our revenue base and further diversifies our revenue mix across acute care and hematology oncology supportive care and reduces our reliance on defend cath revenues to drive cash flow and future growth. Heron's portfolio generated approximately $150 million of net product revenue over the trailing 12 months. and we expect the acquired products to contribute approximately $125 to $150 million of revenue for pro forma 2027, roughly doubling the revenue base for our non-DefendCats portfolio. Second, commercial and operational leverage. We expect to deploy Heron's products through our existing infrastructure, supplemented with a subset of the Heron team, which supports the $45 to $60 million in estimated operating cost synergies that we expect to achieve on an annualized run rate basis by the end of 2027. Third, growth from UQ care franchise. We've used Zinrolef in particular as an asset with significant untapped potential as hospitals and surgery centers increasingly adopt non-opioid approaches to post-surgical pain, and together with Oponvi, which serves the same perioperative call point, represents the fastest growing parts of the Hemron portfolio. And fourth, Hematology Oncology Supportive Care and Pipeline Optionality. Sinvanti and Sustol both bring an established presence in infusion centers and hematology oncology clinics, which aligns directly with our planned launch of Roseo for the prophylaxis indication, if approved by FDA. I also want to highlight how we structure this transaction to align payment with sales performance. Up to $55 million of the consideration is contingent on Zinnerleff achieving net sales milestones in calendar year 2028. And there are additional contingent payments in the form of a royalty above a sales threshold for Sinvanti, Sustol, and any products we launch under the multi-product development agreement. To that extent, a meaningful portion of what we pay is earned only if the assets perform. We expect the transaction to be immediately accreted to earnings and free cash flow upon closing, which we anticipate in the first quarter of 2027. subject to Herron stockholder approval, regulatory clearance, and other customary closing conditions. Turning to third quarter performance, we continue to execute on our three core strategic priorities. First, executing on our posted APA commercial strategy for stem caps. Second, meaningfully advancing our high-value pipeline, highlighted by FDA's acceptance of the SMDA for Roseo for the prophylaxis of invasive fungal disease with priority review. and, third, deploying our capital in a disciplined manner to fuel sustainable growth, highlighted by the Haram announcements. We believe this combination of commercial execution, pipeline progression, and strategic capital allocation positions CoreMedix to drive long-term value to shareholders while building an increasingly diversified and resilient business. For the third quarter, we report a consolidated revenue of $54.5 million above consensus and adjusted EBITDA of $3.1 million. And we ended the quarter with $355 million in cash. Importantly, our largest dialysis customers largely maintained a FinCAP utilization through the quarter at the $2.37 add-on in effect for the second half of 2026. Susan will provide more granular details of third quarter financial results. Turning to guidance. Last week, we reaffirmed our full year 2026 revenue guidance with a range of $325 to $345 million. And today we're also narrowing our full year adjusted EBITDA guidance to the top end of the previous range to $130 to $140 million. We also issued a business update last week addressing CMS's release of the ESRD PPS final rule for 2027, as well as comments made by the CFO of a large dialysis organization related to the 2027 posted APA add-on payment for DefendCast. While the ESRD final rule established a posted APA add-on of $8.32 for the first quarter of 2027, which is within our previously guided range, CMS also finalized a new methodology to calculate add-on payments, whereby they will be reset quarterly. Because the quarterly add-on incorporates recent utilization and pricing data, its trajectory quarter to quarter depends on information that only Core Medix can report to CMS. We have not shared that data with any customer or third party when we believe third party projections of the quarterly path are subject to significant uncertainty. As we disclosed in our announcement, this new quarterly mechanism will result in an overall average reimbursement to customers that is lower than the $8.32 over the course of the year. However, based on our review of our own pricing and utilization data, we currently expect the add-on in each quarter of 2027 to exceed the current $2.37. and we currently estimate the full year average to be at least double that current rate. After a decline from Q1 to Q2, we expect the add-on in Q3 and or Q4 of 2027 to be higher than the second quarter, in each case subject to how CMS applies its methodology, including certain utilization and pricing data in its calculations. Put simply, the lowest add-on we currently expect to FinCAS to see in 2027 is higher than our current rate customers received today. And our LDO and MDO customers have largely maintained utilization at today's current rate in the third quarter. We are currently engaged in conversations with customers around how to structure DefendCast pricing that tracks the quarterly add-on adjustments with the goal of keeping fee-for-service patients on therapy throughout the year. We're also actively working to secure separate payment for DefendCast from top Medicare Advantage plans. As a result, we will not be in a position to rely on any 2027 Thank you for joining us today. following the ending of the posted APA add-on in 2029. The FANCAS clinical value and its potential for meaningful downstream cost savings continue to be supported by a growing body of real-world evidence that our partners are publishing, and I'm proud of the data presentations that took place this past October at the American Society of Nephrology's Kidney Week and at ID Week. Turning to our pipeline, we announced in October that the SMDA for rosacea and prophylaxis was accepted for FDA review with priority review status and a target action date from the FDA in the first quarter of 2027. As a reminder, submission was conducted by our global partner, Mundy Pharma, following positive clinical trial results from the RESPECT study, a phase three clinical study evaluating Roseo for the prophylaxis of invasive fungal disease in adult immunosuppressed patients undergoing allogeneic bone and marrow transplant. We're actively preparing for promotional efforts for Roseo in this new indication and if approved by FDA would anticipate commencement of promotional efforts in the second half of 2027. Finally, with respect to our phase three TPN study for DEFENCAF, despite engagement of new study sites and the FDA approval of a protocol amendment that narrows certain exclusion criteria, study enrollment continues to track meaningfully behind our original estimated timelines. Given the established safety profile for DEFENCAF and demonstrated efficacy in its currently approved indication, We're evaluating potential alternative pathways to pursue approval with FDA should enrollment not accelerate in the next one to two months. We expect to make a decision on the strategy for TPN prior to our next quarterly update call. I'd like to now turn the call over to Susan to discuss the company's third quarter financial results and financial position. Susan?

Thank you, Joe, and good morning, everyone. As a reminder, the Melinda acquisition closed on August 29, 2025. As a result, the third quarter of 2026 includes a full quarter of Malinta operations compared with the third quarter of 2025, which only has one month of Malinta's operations. This difference affects the year-over-year comparison of both revenue and expenses in a meaningful way. We also filed our Form 10-Q this morning, and I encourage investors to review it for additional information regarding our third quarter and year-to-date results, financial position, and related disclosures. Overall, our third quarter results reflect the anticipated transition of DefendCast into the post-ADAPA reimbursement environment, continued contributions from the broader product portfolio and disciplined management of our operating expense base. Now turning to the drivers, consolidated revenue for the third quarter of 2026 was $54.5 million, compared with $104.3 million in the third quarter of 2025. Third quarter consolidated revenue consisted of $17.2 million in DefendCast net sales and $37.3 million from the remainder of the portfolio, consisting of $31.4 million of product sales and approximately $5.9 million of contract revenue and grant income under our BARDA agreement. The year-over-year decline in DefendCast revenue primarily reflects the lower net pricing associated with its transition on July 1st to the post-TADAPA reimbursement period. Importantly, large outpatient dialysis customers largely maintain utilization during the quarter despite the reimbursement change. DefendCast net revenue included a $5 million favorable change in estimate related to certain Medicaid rebate and product return allowances. The adjustment reflects updated information regarding Medicaid utilization as well as recent DefendCast product return experience both of which have been much lower than previously estimated. Total operating expenses were $36.6 million in the third quarter of 2026, compared with $41.7 million in the third quarter of 2025, a decrease of approximately 12%. The reduction primarily reflects merger-related and reorganization costs incurred following the Melinda acquisition in the prior year period, which was partially offset by the inclusion of a full quarter of costs associated with the expanded organization in 2026 versus just one month of Melissa's costs in the third quarter of 2025. R&D expenses were $7 million in the quarter compared with $5.1 million in the third quarter of 2025. The increase was primarily attributable to higher personnel and clinical trial costs supporting our combined company's ongoing development programs. Selling and marketing expenses were $11.7 million in the quarter compared with $11.2 million in the prior year quarter. The modest increase reflects personnel and marketing investments supporting the expanded product portfolio partially offset by the cost savings associated with the elimination of overlapping commercial teams that were present for a portion of the third quarter of 2025. G&A expenses decreased $17.9 million from $25.5 million in the third quarter of 2025. The decrease year over year was largely attributable to transaction, integration, and reorganization expenses incurred in connection with the Melinda acquisition during the prior year period, and partially offset by higher costs in 2026 of operating the combined company, including investments in personnel, IT, legal support, and facilities. On the bottom line, on a GAAP basis, CoreMedix recorded a net loss of $14.7 million, or 19 cents per basic and diluted share, compared with net income of $108.6 million or $1.42 per basic share and $1.26 per diluted share in the third quarter of 2025. A large driver of net income in the prior year period was a substantial tax benefit of $59.7 million associated with a partial reversal of the valuation allowance on deferred tax assets. Third quarter 2026 gap results included an $11.5 million non-cash expense from the quarterly remeasurement of contingent consideration associated with the Melinda acquisition. This expense reflected changes in the discount rates applied to expected milestone and royalty payments, as well as accretion of the liability from the passage of time. On a non-gap basis, adjusted EBITDA was three points. and many more. Adjusted EBITDA excludes depreciation and amortization, stock-based compensation, interest and other income and expense, changes in contingent consideration, taxes, merger-related costs and other specified adjustments. In the third quarter of 2026, the calculation also excludes the $5 million favorable change in estimate related to sales allowances reported during the quarter. We ended the quarter with $355.2 million in cash and cash equivalents. For the first nine months of 2026, net cash provided by operating activities was $218.3 million compared with $80.6 million in the first nine months of 2025. The year-over-year increase in cash flow Thank you for joining us. and we are narrowing our adjusted EBITDA guidance to $130 to $140 million, the high end of our previous range. We have also lowered and narrowed our full year operating expense guidance which excludes non-cash items such as stock-based compensation to $140 to $145 million. With the integration of Melinda behind us and the financial flexibility afforded to us, We believe we are well positioned to drive significant value for shareholders in the many ways that Joe has mentioned. And now I will turn the call back to Joe for closing remarks. Joe.

Thanks, Susan. On the heels of our recently announced agreement to acquire the Heron assets, along with a strong balance sheet and access to additional non-diluted capital from our former con-terminal facility, I'm excited about the potential for the organization. CoreMedix is building a leading diversified commercial platform across institutional settings of care. We have a portfolio of complementary assets utilized in hospitals, infusion clinics, and hematology oncology clinics with a commercial and medical footprint that spans across those therapeutic settings. Our near-term priorities are clear, closing the heroin transaction and capturing synergies, navigating to FENCAS through the 2027 quarterly add-on framework while pursuing Medicare Advantage, and preparing for potential commercialization of Roseo for an expanded indication of prophylaxis. Over time, we will continue to evaluate additional assets that are synergistic with our commercial and medical footprint with the same discipline we apply to Melinda and Hera. At this time, I'm happy to open up for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star and then two. Our first question comes from Les Saluski with Oppenheimer. Please go ahead.

It seems like Les is having a technical problem. Do you want to move to the next and then come back?

Yes. In the next question.

I'm sorry.

Can you hear me? We can now, Les. Hey.

Okay. I'll repeat. Sorry about that. So I have three questions. So, Joe, you noted that CoreMedix will be solely in control of providing utilization rates to CMS for the add-on calculations. Is there a factor of selectivity or subgroup or certain timeframes of utilization that can be submitted by you? or is it broad? And then second, on Medicare Advantage, what's the main hurdle to getting the first contract signed and how quickly could get patients utilized following on? And then lastly, what's driving the slow TPN enrollment? Thank you.

Okay. Three good questions, Les. On the first one, in terms of the data that gets, when we say we're only, we are in control of the data that gets reported to CMS because it's, It's our sales data. And the way that CMS calculates ASP for the purpose of calculating the add-on, it's based on the timing of when rebates are paid as opposed to when they're accrued. So there may not necessarily be alignment between when we report net price in our earnings versus when it hits ASP. And a lot of these contracts have longer-term volume incentive rebates. where perhaps you're paying those rebates on a very delayed timeframe and it ends up ultimately hitting ASP at a different period than what an outside third party might just look at financials and expect it to hit. So that's kind of the disconnect that we wanted to highlight with how CMS calculates that add-on. Now for Medicare Advantage, You know, I am still, as I said last time, partially optimistic that we can get something done before the end of this year. I think I likened the example of working with an airplane and trying to turn an aircraft carrier, which is slow. I would say that, you know, I believe that we have a contractual framework that is largely final, but for The EMA plan, agreeing to how it's going to be operationalized. I think those are still the hurdles that our team is actively working, at least with the largest plans through those specifics. So hopefully we'll be able to provide an update before the end of the year, and that's what our team is working on. On TPN, I'll let Liz comment. It's not a change in the market opportunity It's an ability for these types of patients to participate in a clinical study.

Yeah, so just to piggyback on what Jeff said, there are a limited number of subjects actually eligible to participate in a study, right? Not representative of the TPN market, but they're really complex patients that have a lot of underlying conditions that make it challenging to participate, right? Intestinal failure, cancers, things like that make it difficult to adhere to a study schedule. I think we've also got a challenge that frequently antibiotics or antifungals are used prophylactically, and obviously it's very challenging to be able to see a signal for DefenCap if patients need to be on that from a standard of care standpoint. And lastly, we have added quite a few sites here in the U.S. as well as in Turkey. But the number of patients that are attached to an academic medical center that has the infrastructure to run a clinical trial versus those that are seen in community practices or perhaps don't live near a site is also an issue. So there's been excessive work done, I'd say, extensive work done with patient advocacy groups and with all of our investigators to continue identifying subjects that are eligible. But the logistics of running a study in this patient population are proving to be rather challenging right now.

Noted. Thank you. And my apologies for the technical issues.

That's okay. Thanks, Les.

And the next question comes from Leo Timyshev with RBC. Please go ahead.

Hi. Thanks for taking our question. This is Xander Ahn for Leo. And I know you commented on a lot of this already, but I'm just wondering, you know, if you can expand on the outlook for 27 and what do you see as, you know, the most supportive and constructive factors for DEF and CAST going into this? And, you know, what areas are going to require a little bit more careful navigation? Thank you.

Thanks, Andrew. I mean, as we said in the script, we're really not in a position to provide guidance right now for DEF and CAST. for 2027. There are pushes and pulls. As we said in the script as well, we think the add-on on average is going to be lower than 832. That needs to be taken into account in terms of how we essentially price the product quarter to quarter, specifically for fee-for-service patients. The pull, we're looking for the Medicare Advantage patients to Medicare Advantage contracting to both pull up a number of patients as well as pricing. And once we have better visibility of that, we can provide some, we hope to provide guidance on where we think revenue for SpendCast can land in 2027. We'll also, you know, at that time, you know, provide overall guidance for the company for 2027. Right now, what we're comfortable with is what we've put out for the heroin acquisition and what we'll update likely in the first quarter.

Thank you, really appreciate the context.

And the next question comes from Brandon Foulkes with HC Wainwright. Please go ahead.

Hi, thanks for taking my questions and congrats on managing through the quarter. Maybe just two from me. You talked about kind of uncertainty for the dialysis operators. Just given how traditionally they do take time to move How much of a risk is that uncertainty just in terms of kind of protocols and things that they may want to put in? What can you do to provide volume certainty to the operators in 2027? Is that sort of how you're looking at it? And then ASP may be the variable in terms of Comedics' reporting. And then that's just the one for me. Yeah, I think that's it for now because I think that's probably quite.

Thank you. I'm sorry, Brandon. I want to clarify because I want to make sure that you understood what I had said. When I was talking about the time to move and then being slow, I was referring to the Medicare Advantage plan, which is the payer. And, you know, large organizations were trying to do something that's never been done before, which is take something that's traditionally inside the bundle and contract it out to be separately reimbursed. We have a compelling case for that. This is a preventative case. This takes cost out of the system, right? It's a strong form of economic benefit to the MA plan to actually have payment follow the product instead of bundle life, right? So that's largely the argument around MA. When it comes to the dialysis operators and protocols, specifically, you know, our three largest customers being Fresenius, U.S. Renal Care, and IRC, those protocols are already in place, and to our knowledge, nothing has been altered in the last couple of months.

And so can they just, just to follow on, you know, are they in a position to dial up utilization and dial it down on a quarterly basis? Just any color in terms of that element, just so I can understand kind of the tools in 27.

Okay, I don't know if I think of it that way, right? If you have a patient that is stable on a preventative measure, I would expect that either they stay on that or if they're going to move, it's not going to be quarter to quarter for that patient. I think they'd be irresponsible to make changes quarter to quarter like that. The opportunity with Medicare Advantage would be they do have the ability to do a benefits verification for their patients, understand the payer dynamic, and then transition certain patients longer term to that therapy.

Great, thanks. And then maybe just one follow-up. OneQ27, you know, there's going to be a lot going on with Roseo and the Heron Close. Can you just talk about your expectations for Heron in terms of stamping kind of what you want to do with those products? You know, how long does that take? Just setting, I know you can't talk too much in specifics right now, but maybe just setting the timeframe in terms of when we see the Cormedex impact on the Heron products post-close.

Yeah, look, we've put out a revenue range for next year, and a lot of that, the variability in that range isn't as much related to what I think we can do immediately with kind of our fingerprint, as opposed to the external dynamics, certainly related to Sinvanti, the situation with Izerti, and how that litigation progresses and any potential launch at risk by Izerti of a competing branded product. You know, all that kind of factors into that range. But we're hoping to close in the first quarter. We have specifically around zero F ideas that we think for things that based on our research that we can maybe pivot on or do a little bit differently. I don't know. I don't want to commit today to how long that will take to either implement or see results. But certainly we're excited about the assets and the deal that we announced.

Great. Thank you very much.

And the next question comes from Jason Butler with Citizen JMP. Please go ahead.

Hi, thanks for taking the questions. Just a couple outside of DefendCast. First, can you talk a little bit more about what you're doing to prepare for the Rosio Profi launch? What is awareness of the product and the Profi data now among potential prescribers? Second, can you just talk a little bit more about the growth potential for Zinrolav, one of the products you just got from Heron? Obviously a large TAM, but what are your thoughts here on commercial strategy and what you guys can do to drive growth? And then just lastly, can you just give us thoughts on the quarter for the base business for Molinter and the growth potential that's still in that portfolio? Thank you.

Okay, I'm going to actually take the second and third question first, and then Liz will comment on the ZO Prophylaxis launch press. Look, in terms of the growth opportunity for ZEN, it is a We do see it as a large market opportunity, even if you just look at the other non-opioid, long-acting bupivacaine market that's out there. It's a sizable market opportunity. Where Xenoleth is currently being used is almost exclusively in ortho. The label is much broader than that. We do think there's an opportunity for expansion. I'm not going to put a number today around where we think we can grow it to, but we do think there's potential upside for things that we can do there. Like on the base business revenue, and I think you're largely talking about, you know, Babermere, Minneson, Commercio, Revactive. Those are durable-ish assets, certainly when you're talking about Babermere, Minneson. You know, we do see periodically low single-digit growth on those products, but it does also kind of vary a little bit quarter-to-quarter, institution-to-institution. You know, Revactive and Commercio, which are the Red Advancing products, did contract this year after generic Dow Bands launched last year. We're looking at somewhat of an increased promotional activity toward the back part of next year once the kind of profit arbitrage for the generics diminishes a little bit in the back part of next year. But, you know, that's how I would view the base business. Then you have Topol and Bextella that are pretty much flat. Liz, you want to comment on Roseo?

Sure. So as we prep for Roseo Profi launch, I'd say we have a really cross-functional approach to preparing. We're certainly leveraging a very strong commercial infrastructure, but working closely with medical and market access as well. I think right now we're really focused on a few key priorities, refining the market segmentation and the customer targeting, really advancing the market access strategy and preparing the field for this engagement and ensuring that we've got alignment across all of our functions here. And our medical team and some of the market access team is already working on building a presence and relationship with the bone marrow transplant centers and those institutional markets. And I would say that we are really The goal is to ensure that we're not just prepared for a successful launch, but that we are able to stay in the business and really maximize the long-term value that we think that Prophy has.

Great, thank you.

And the next question comes from Sergey Bellinger with Needham & Company. Please go ahead.

Hi, good morning. I guess three questions for us, too. First, on the... LDU pilot program. Any update there on how much it contributed to the third quarter and whether there's plans to expand beyond a pilot? And then secondly, on DEF and CAT, you reported I think 17.2 million in sales this quarter. Five million of it was from a sales allowance charge. So should we think as a $12 million sales base, as the level going forward for 4Q and on which you'll grow from in 2027. And then lastly, on Roseo, any outlook on what the label could look like for the product now that the review is underway and the priority review has been granted? Thank you. Thanks.

Look, the LDO pilot, we're really excited to get that contract done and get that finally over the finish line and have them implement. But we have not had any kind of repeat ordering from there. We continue to engage and we're hopeful that we can perhaps drive something next year with engagement with Medicare Advantage. But right now, we don't have any real visibility into increased adoption or the results of that pilot. So good question about the FENCAP in the fourth quarter. I'd say tentatively, yes. I think it could be a little bit of a notch up, but that's probably the right way to look at it. From a pricing standpoint, we want the volume to stay consistent and then roll into next year with some higher pricing, at least for that kind of what we'll call base business fee for service patients that we're looking to preserve. Look, on the Roseo label, we're not going to comment until we get feedback from FDA. You know, the results are out there for the clinical study, and Money Pharma is in control of that regulatory process, and we're providing whatever support we can to them in that regard.

All right. Thanks.

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