Is CorMedix Overvalued?

CorMedix, Inc (CRMD) is a commercial-stage pharmaceutical company focused on harnessing its taurolidine technology for the prevention and treatment of infectious and inflammatory diseases. The stock has returned 56% year-to-date. It is currently trading at price to sales ratio of 574.17 and P/B ratio of 41.92.

The company released its fourth quarter 2018 and full year 2018 results on March 14, 2019. Net income was $2.1 million when compared to a net loss of $10.3 million for the same period last year. The improvement was mainly due to the reversal of the clinical trial expenses as a result of the confidential settlement. Operating expenses were $2.1 million compared to $10.4 million in the fourth quarter of 2017. The decrease was primarily due to the decrease in R&D expense of $12.8 million.

For the full year, the company recorded a net loss of $26.8 million or $0.30 per share when compared to a net loss of $32.9 million or $0.60 per share for 2017.

Cash at the end of the fourth quarter was $17.6 million when compared to $10.3 million at the end of December 2017. The management feels that the cash is sufficient until the second quarter of 2020. It also closed the $7.5 million senior secured convertible debt financing with Elliot Associates. The loan has a three-year maturity with an annual interest rate of 10% and is convertible into the company’s common stock at a price equal to $1.50 per share.

The company has announced the one-for-five reverse stock split of the Company’s common stock, par value $0.001 with effective from March 26, 2019. Khoso Baluch, CorMedix CEO commented, “We are implementing the reverse stock split as planned so that we have the flexibility to take advantage of future investment opportunities, to possibly attract more institutional interest into our stock, and given our need to have available unissued shares to reserve for past transactions. As our current cash position is expected to finance the Company into the second quarter of 2020, we believe it is a good time to move ahead.” The outstanding shares will be approximately 23.8 million from 119.0 million shares.

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Beating Buffett 2 years ago Member's comment

I think this article is rather pointless as it doesn't really share anything new. Why is $CRMD overvalued? Do you have reason to think #Neutrolin won't be approved?