CorMedix Inc. (NASDAQ: CRMD) is a hot topic among biotechnology investors, and for good reason. Several months ago, the company submitted a New Drug Application and the PDUFA date, or the date that the FDA will either give the nod of approval, or reject the drug, is fast approaching.
Here’s what’s going on:
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- The CorMedix PDUFA Date Is Coming
- There’s a High Probability of Approval
- What Analysts Think About CRMD Stock
- Risks to Consider Before Buying CRMD Stock
- Final Thoughts
The CorMedix PDUFA Date Is Coming
As mentioned above, investors in the biotech space have been chatting about CorMedix quite a bit recently as the company’s PDUFA date is just around the corner.
The New Drug Application surrounds an experimental treatment known as Defencath, which is a synthetic broad-spectrum antimicrobial and antifungal drug. CRMD is developing Defencath as a potential option to reduce the risk of catheter-related bloodstream infections in patients with end-stage renal disease receiving hemodialysis via a central venous catheter.
Importantly, the PDUFA date for the treatment is February 28, 2020, meaning that the FDA will either approve, or reject, the drug within the next 10 days.
Should approval take place, Defencath has the potential to become a blockbuster therapeutic option. In fact, according to B. Riley analyst, Andrew D.Silva, the total addressable market for CRMD in hemodialysis patients sits around $1.7 billion.
There’s a High Probability of Approval
All signs don’t just point to a PDUFA date on the horizon, they point to an approval for CRMD and its Defencath candidate.
In fact, Defencath is already approved in Europe and other regions and is selling under the brand name Neutrolin. That alone bodes well for approval, but there’s more.
CorMedix was granted priority review for the candidate, reducing the FDA’s review time from about 10 months to about six months. Moreover, the FDA decided that an advisory committee meeting wasn’t necessary for the drug.
Moreover, the Phase 3 study results released by CRMD were impressive to say the least. There was a 71% drop in CRBSI in patients undergoing hemodialysis when compared to heparin.
Beyond efficacy, there are several other reasons the FDA might want to approve the drug. First and foremost, with reduced infections comes reduced antibiotic use, which is a major plus. Not to mention patients experience an improved quality of life and reduced mortality rates.
All of this suggests that the treatment is far more likely to be approved than rejected.
What Analysts Think About CRMD Stock
There’s no question, analysts absolutely love CRMD. In fact, there are currently four analysts rating the stock, all of which have placed a Buy rating on it with compelling price targets.
The median price target on the stock is at $22 per share, suggesting that there’s potential for extreme gains CorMedix ahead.
While it’s never a good idea to blindly follow the opinions of analysts, it is wise to use their opinions to validate your own. So, if you were already excited about CRMD stock, you have yet another reason for that excitement.
Risks to Consider Before Buying CRMD Stock
If you’re going to buy CRMD stock, or any other stock for that matter, you’ll need to be willing to accept risk. Unfortunately risk of loss is involved in any investment decision. When it comes to an investment in CorMedix, the most significant risks include:
- FDA Rejection. While all signs point to a high probability that the FDA will approve Defencath, as they say, it ain’t over ‘till the fat lady sings, and I don’t hear any singing yet. There’s still a small chance that the FDA will reject the treatment, in which case, CorMedix would likely experience significant declines.
- Commercialization Risk. Even if approval is achieved, it’s not the end all, be all. The fact of the matter is that upon approval, the company needs to sell the drug. If CRMD isn’t able to get its target audience to adopt the treatment, significant declines may be ahead.
- Capital Risk. Finally, CRMD isn’t a profitable company yet. If the company’s bank account isn’t enough to fund it through profitability, it will likely look to the public to raise funds. Should this take place, existing shareholders will experience dilution and the stock will likely fall.
Sure, there are risks to consider before diving into CorMedix stock, but there are risks in any investment you make. All in all, CRMD looks to be a great opportunity.
In just 10 days, the FDA will hand down its decision with regard to Defencath, and there’s a very strong chance that the decision will be positive. Should this be the case, the stock is likely to skyrocket.
Moreover, the treatment has proven far more effective than the current standard of care. So, the company should have no issues when it comes to commercialization. All in all, things are looking up, making CRMD stock one to watch closely.