Cormedix Q3 2026 Earnings Call Transcript

Cormedix (NASDAQ:CRMD) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Cormedix Inc announced a definitive agreement to acquire Heron Therapeutics’ assets, expecting the transaction to double their revenue base and achieve significant cost synergies by the end of 2027.

For Q3 2026, Cormedix reported consolidated revenue of $54.5 million and adjusted EBITDA of $3.1 million, with $355 million in cash, surpassing consensus estimates.

The company reaffirmed its 2026 revenue guidance of $325 to $345 million and narrowed its adjusted EBITDA guidance to $130 to $140 million, with expectations for the Heron acquisition to be accretive to earnings and cash flow upon closing.

Cormedix highlighted ongoing strategic priorities, including the post-TDAPA commercial strategy for DefenCath, FDA’s acceptance of REZZAYO’s sNDA with priority review, and disciplined capital allocation.

The company deferred its 2027 guidance for DefenCath due to uncertainties around Medicare Advantage contracts and new CMS reimbursement methodologies, expecting to update in early 2027.

Operational challenges include slow enrollment in the Phase 3 TPN study for DefenCath, with potential alternative FDA approval pathways under consideration.

Management emphasized the strategic value of Heron’s portfolio in enhancing Cormedix’s commercial platform and the potential for growth in non-opioid post-surgical pain management with ZYNRELEF.

Full Transcript

OPERATOR

Good morning and welcome to the Cormedix 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 LifeSci Advisors. Please go ahead.

Dan Ferry (Investor Relations)

Good morning and welcome to the Cormedix third quarter 2026 earnings and corporate update conference call. Leading the call today is Joe Todisco, Chairman and Chief Executive Officer of Cormedix. He is joined by Susan Blum, EVP and Chief Financial Officer. In addition, Liz Hurlbert, 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 and 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’s website.

In addition, today’s discussion includes statements regarding Cormedix’s proposed acquisition of substantially all the assets of Heron Therapeutics, which remain subject to approval by Heron’s stockholders, regulatory clearance and other customary closing conditions. Cormedix has filed a current report on Form 8-K describing the proposed transaction in greater detail. Investors are urged to read it and any other relevant documents Cormedix files with the SEC carefully and in their entirety because they contain important information about the proposed transaction.

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 (Chief Executive Officer)

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 the assets of Heron Therapeutics, encompassing both commercial and pipeline assets that we believe are highly complementary and synergistic with Cormedix’s 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 DefenCath 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-DefenCath 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 the acute care franchise. We view ZYNRELEF 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 APONVIE, which serves the same perioperative call point, represents the fastest-growing parts of the Heron portfolio. And fourth, hematology-oncology supportive care and pipeline optionality. CINVANTI and SUSTOL both bring an established presence in infusion centers and hematology-oncology clinics, which aligns directly with our planned launch of REZZAYO for the prophylaxis indication if approved by FDA.

I also want to highlight how we structured this transaction to align payment with sales performance. Up to $55 million of the consideration is contingent on ZYNRELEF 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 CINVANTI, 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 accretive to earnings and free cash flow upon closing, which we anticipate in the first quarter of 2027, subject to Heron 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 post-TDAPA commercial strategy for DefenCath. Second, meaningfully advancing our high-value pipeline highlighted by FDA’s acceptance of the sNDA for REZZAYO 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 Heron announcement.

We believe this combination of commercial execution, pipeline progression and strategic capital allocation positions Cormedix to drive long-term value to shareholders while building an increasingly diversified and resilient business. For the third quarter we reported 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 DefenCath 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 post-TDAPA add-on payment for DefenCath.

While the ESRD final rule established a post-TDAPA 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 Cormedix can report to CMS. We have not shared that data with any customer or third party and 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 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 DefenCath to see in 2027 is higher than our current rate customers receive 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 DefenCath 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 DefenCath from top Medicare Advantage plans. As a result, we will not be in a position to opine on any 2027 revenue guidance for DefenCath until we have visibility into both customer pricing and expected utilization for Medicare Fee-for-Service patients as well as possible upside for Medicare Advantage. In that regard, we are deferring 2027 DefenCath guidance at this time and anticipate being able to update investors in early 2027.

We continue to believe that Medicare Advantage represents a meaningful long-term growth avenue for DefenCath and the best opportunity for the product to have sustainable value following the ending of the post-TDAPA add-on in 2029. DefenCath’s 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 ID Week.

Turning to our pipeline, we announced in October that the sNDA for REZZAYO in 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 Mundipharma, following positive clinical trial results from the ReSPECT study, a Phase 3 clinical study evaluating REZZAYO for the prophylaxis of invasive fungal disease in adult immunosuppressed patients undergoing allogeneic bone marrow transplant.

We’re actively preparing for promotional efforts for REZZAYO 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 3 TPN study for DefenCath, 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 DefenCath 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.

Susan Blum (Chief Financial Officer)

Thank you, Joe, and good morning, everyone. As a reminder, the Melinta acquisition closed on August 29, 2025. As a result, the third quarter of 2026 includes a full quarter of Melinta operations compared with the third quarter of 2025, which only has one month of 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 DefenCath into the post-TDAPA 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 DefenCath 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.

The year-over-year decline in DefenCath revenue primarily reflects the lower net pricing associated with its transition on July 1 to the post-TDAPA reimbursement period. Importantly, large outpatient dialysis customers largely maintained utilization during the quarter despite the reimbursement change. DefenCath 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 DefenCath 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 Melinta 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 Melinta’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 to $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 Melinta 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, Cormedix recorded a net loss of $14.7 million, or $0.19 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 the partial reversal of the valuation allowance on deferred tax assets. Third quarter 2026 GAAP results included an $11.5 million non-cash expense from the quarterly remeasurement of contingent consideration associated with the Melinta 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-GAAP basis, Adjusted EBITDA was $3.1 million for the third quarter of 2026 compared with $71.9 million in the third quarter of 2025. 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 reflects the higher year-to-date earnings achieved during the current year relative to 2025 as well as working capital movements, including the timing of certain contractual rebate payments.

As discussed earlier, we are maintaining our full-year 2026 consolidated revenue guidance of $325 to $345 million, 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 Melinta 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.

Joseph Todisco (Chief Executive Officer)

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 Pharmakon term loan facility, I’m excited about the potential for the organization. Cormedix 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 Heron transaction and capturing synergies; navigating DefenCath through the 2027 quarterly add-on framework while pursuing Medicare Advantage; and preparing for potential commercialization of REZZAYO 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 applied to Melinta and Heron.

At this time, I’m happy to open up for questions.

OPERATOR

We will now begin the question-and-answer session. To ask a question, you may press star then one 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 then two. Our first question comes from Les Saluski with Oppenheimer. Please go ahead.

Dan Ferry (Investor Relations)

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

OPERATOR

Yes, the next—I’m sorry, can you— We can now, Les. Hey.

Les Saluski (Analyst)

Okay, I’ll repeat. Sorry about that. So I have three questions. So, Joe, you noted that Cormedix 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 you get patients utilized following on?

And then lastly, what’s driving the slow TPN enrollment? Thank you.

Joseph Todisco (Chief Executive Officer)

Okay, three good questions, Les. The first one, in terms of the data that gets—when we say only we are in control of the data that gets reported to CMS, because 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 in 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. For Medicare Advantage, you know, I am still, as I said last time, cautiously optimistic that we can get something done before the end of this year. I think I likened the example of working with an MA plan to trying to turn an aircraft carrier. They’re just slow. I would say that, you know, I believe that we have a contractual framework that is largely final, but for the MA plan agreeing to how this is going to be operationalized. I think those are still the hurdles that our team is actively working, at least with the largest plan, 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, you know, I’ll let Liz comment. It’s not a shortage. It’s not a change in the market opportunity. It’s an ability for these types of patients to participate in a clinical study. Do you want to go ahead?

Elizabeth Hurlburt (Executive Vice President)

Yeah. So just to piggyback on what Joe 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 DefenCath 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 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.

Les Saluski (Analyst)

Noted. Thank you. And I apologize for the technical issues.

Joseph Todisco (Chief Executive Officer)

That’s okay. Thanks, Les.

OPERATOR

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

Xander (Analyst at RBC Capital Markets)

Hi, thanks for taking our question. This is Xander on 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 you see as the most supportive and constructive factors for DefenCath going into this, and, you know, what areas are going to require a little bit more careful navigation. Thank you.

Joseph Todisco (Chief Executive Officer)

Thanks, Andrew. I mean, as we said in the script, we’re really not in a position to provide guidance right now for DefenCath for 2027. There are pushes and pulls, you know, as we said in the script as well, we think the add on average is going to be lower than the 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 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 DefenCath can land in 2027. We’ll also, at that time, provide overall guidance for the company for 2027. Right now, what we’re comfortable with is what we’ve put out for the Heron acquisition and what we’ll update likely in the first quarter.

Andrew

Thank you. Really appreciate the context.

OPERATOR

And the next question comes from Brandon Folkes with H.C. Wainwright. Please go ahead.

Brandon Folkes (Analyst)

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 Cormedix 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. Yeah, thank you.

Joseph Todisco (Chief Executive Officer)

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 them 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. This takes cost out of the system. It’s a strong form of economic benefit to the MA plan to actually have payment follow the product instead of bundleizing. 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, US Renal Care, and IRC. Those protocols are already in place and to our knowledge, nothing has been altered in the last couple of months.

Brandon Folkes (Analyst)

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

Joseph Todisco (Chief Executive Officer)

Kind of the. Look, 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.

Brandon Folkes (Analyst)

Great, thanks. And then maybe just one follow up, you know, obviously 1Q27, you know, there’s going to be a lot going on with Ryseo and the Heron close. Can you just talk about your expectations for Heron in terms of damping 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 time frame in terms of when we see the Cormedix impact on the Heron products post close.

Joseph Todisco (Chief Executive Officer)

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 Symbante, the situation with Azerti and how that litigation progresses, and any potential launch at risk by Azerti of a competing branded product. You know, all that kind of factors into that range.

Look, we’re hoping to close in the first quarter. We have specifically around Zynrelef 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.

Brandon Folkes (Analyst)

Great, thank you very much.

OPERATOR

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

Jason Butler (Analyst)

Hi, thanks for taking the questions. Just a couple outside of DefenCath. First, can you talk a little bit more about what you’re doing to prepare for the Resio Prophy launch? What is awareness of the product and the Prophy data now among potential prescribers? Second, can you just talk a little bit more about the growth potential for Zynrelef, 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 from Alenta and the growth potential that’s still in that portfolio? Thank you.

Joseph Todisco (Chief Executive Officer)

Okay, I’m going to actually take the second and third question first and then Liz will comment on Roseo prophylaxis launch. Look, in terms of the growth opportunity for Zynrelef, 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, right, it’s a sizable market opportunity. Where Zynrelef is currently being used is almost exclusively in ortho. The label is much broader than that.

We do think there’s an opportunity. 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 Vapor Mirror Minicin, Commercel or Evactive. Those are durable-ish assets. Certainly when you’re talking about Vapor Mirror Minicin 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 we’re back and Commercive, which are the rid of Anson products, did contract this year after generic Dalvanse 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 that’s how I would view the base business. Then you have Toprol and Baxdela that are pretty much flat. Liz, you want to comment on Rizzeo?

Elizabeth Hurlburt (Executive Vice President)

Sure. So as we prep for Ryseo Prophy 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 sustain the business and really maximize the long-term value that we think that Prophy has.

OPERATOR

Great, thank you. The next question comes from Sergey Belanger with Needham and Company. Please go ahead.

Sergey Belanger (Analyst)

Hi. Good morning. I guess three questions for us, too. First, on the LDO 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 DefenCath, you reported 17.2 million in sales this quarter. 5 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 Reseo, any outlook on what the label could look like for the product now that the review is underway and a priority review has been granted? Thank you.

Joseph Todisco (Chief Executive Officer)

Thanks. Look, the LDO pilot, we’re really excited to get that contract done and get that, you know, 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 results of that pilot, so. Good question. About DefenCath 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, we’ll call base business fee-for-service patients that we’re looking to preserve.

Like on the Roseo label, we’re not going to comment until we get feedback from FDA. The results are out there for the clinical study and Mundipharma is in control of that regulatory process and we’re providing whatever support we can to them in that regard.

Sergey Belanger (Analyst)

All right, thanks.

OPERATOR

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

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