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INITIATION OF COVERAGE

U.S. Research: Biotechnology August 24, 2010

CORMEDIX INC. (NYSE AMEX: CRMD)


We are initiating coverage on CorMedix Inc. (NYSE AMEX: CRMD) with a BUY rating and a 12-
month price target of $6.00 for CRMD shares for the following reasons:
®
 Neutrolin (CRMD003): CRMD‟s lead program opens the door to a $675 million sales
opportunity via the prevention of catheter-related bloodstream infections, a major healthcare
challenge;
 CRMD001 (a novel formulation of deferiprone): strengthens CRMD‟s pipeline prospects with a
potential market opportunity of $365 million; and
®
 Several catalysts, including Neutrolin ‟s IDE submission and subsequent pivotal trial and
preliminary data for CRMD001 Phase II in 4Q „10 expected to drive value for CRMD shares.

CorMedix Inc. (NYSE AMEX: CRMD) is a specialty Share Price (8/23/10) $1.45
pharmaceutical company engaged in the development of
52-Week Price Low / High $1.22 – $4.00
therapeutics, devices, and diagnostics for the prevention,
Mkt. Capitalization (issued) $16.5 M
treatment, and detection of cardio-renal disease. Its two platform
® Shares Outstanding (issued) 11.4 M
technologies, Neutrolin , (CRMD003) and CRMD001 (newly
formulated deferiprone), target kidney disease and concomitant 12-month Target Price $6.00
®
cardiovascular complications. Neutrolin is a combination agent Cash & Equiv. (6/30/10) $10.6 M
used as a catheter lock solution in central venous catheters Estimated Mos. of Cash 18 months
®
between hemodialysis sessions. Neutrolin combines anti- Fiscal Year Ends Dec. 31st
coagulants (citrate and heparin) and a broad-spectrum Website cormedix.com
antimicrobial (taurolidine) into one solution that is used to fill or
―lock‖ a central venous catheter to eradicate bacteria and to
prevent catheter related bloodstream infection and clotting, as 3-Month Price Chart
well as to maintain catheter function. CRMD001, an iron-
binding/chelating drug, is designed to remove excess labile iron
associated with X-ray dyes/imaging procedures that cause kidney
damage (contrast induced nephropathy) in patients with chronic
kidney disease. Additional pipeline candidates include CRMD002,
a toxic iron biomarker test that supports the development and
commercialization of CRMD001, and CRMD004, a novel gel
®
formulation of Neutrolin (with unique liquefying properties) with
® Source: Yahoo.com
the potential to extend the benefits of Neutrolin to many settings,
including hemodialysis, cancer chemotherapy, and intravenous
nutrition.

®
Neutrolin (CRMD003) Clinical Development
Pivotal Clinical Trial (Prevention of Catheter-Related Bloodstream Infection) – Expected to Begin 1H ‗11
CRMD001 (Newly Formulated Deferiprone) Clinical Development
Phase II Proof-of-Concept Clinical Trial (Prevention of Contrast-Induced Nephropathy in Patients with Chronic
Kidney Disease) – Preliminary Data Expected End of CY ‘10
Pivotal Phase III Clinical Trial (Prevention of Contrast-Induced Nephropathy in Patients with Chronic Kidney
Disease) – Expected to Begin 2H ‘11

CHRYSTYNA BEDRIJ* MARK MERRILL


212-509-9500 646-442-1441
CBEDRIJ@GRIFFINSECURITIES.COM MMERRILL@GRIFFINSECURITIES.COM

Griffin Securities, Inc., 17 State Street, NY, NY, 10004 www.GriffinSecurities.com 1


Please Review Disclosures on Page 28 of this Research Report
CorMedix Inc. August 24, 2010

INVESTMENT SUMMARY
The heart and kidney are inextricably linked and oxidative stress and endothelial dysfunction are common
to both. Much of the morbidity and mortality associated with kidney disease is cardiovascular. Patients
with chronic kidney disease have increased risk of accelerated atherosclerosis, nonfatal myocardial
1
infarction, congestive heart failure, atrial and ventricular arrhythmias, and cardiac death. CRMD is
developing therapies and enabling diagnostics to address this cardio-renal epidemic. Its two platform
®
technologies, Neutrolin and CRMD001 (deferiprone), target kidney disease and concomitant
cardiovascular complications.
®
 Neutrolin (CRMD003): CRMD‟s lead program opens the door to a $675 million sales
opportunity via the prevention of catheter-related bloodstream infections, a major healthcare
challenge. The Center for Disease Control (CDC) has identified catheter-related bloodstream
infection as one of its seven major healthcare challenges. They estimate the annual incidence of
cases at 250,000 with the cost to the healthcare systems of approximately $4.6 billion per year.
®
Neutrolin ‘s potential to become the first FDA-approved catheter lock solution (to be administered into
a patient‘s catheter at the conclusion of each hemodialysis session) to prevent catheter-related
bloodstream infection would be significant. A pivotal registration trial is expected to begin as early as
1H ‗11.
 CRMD001 – a novel formulation of deferiprone – strengthens CRMD‟s pipeline prospects with
a potential market opportunity of $365 million. CRMD is advancing CRMD001 to prevent contrast-
induced nephropathy in high risk patients. The iron chelator acts by removing excess labile, or "toxic",
iron associated with X-ray dyes/imaging procedures in high-risk patients with chronic kidney disease.
A Phase II study started in 2Q ‘10. Favorable results are expected to lead to the launch of a pivotal
Phase III trial in 2H ‗11. We forecast a potential market opportunity of $365M in the US for
CRMD001‘s first indication, contrast-induced nephropathy.
 Several catalysts, including Neutrolin®‟s IDE submission and subsequent pivotal trial and
preliminary data for CRMD001 Phase II in Q42010 expected to drive value for CRMD shares.
®
The development and advancement of the Neutrolin program is likely to be the biggest driver of
value for CRMD shares in the near term. In addition, positive results from the CRMD001 Phase II trial
(preliminary data and final data expected in 4Q ‘10 and 1H ‘11, respectively) would likely substantially
increase the value of the program based on decreased clinical risk and increased potential of an early
corporate deal (e.g., either a big pharmaceutical partnership, sale of the program, etc.). Increased
visibility as a relatively new public company should also provide increased sponsorship.
Our discounted cash flow (DCF) model supports a valuation of $6.60/share. Therefore, we are
initiating coverage on CorMedix Inc. (NYSE AMEX: CRMD) with a BUY and establishing a 12-
month price target of $6.00 per CRMD share.

1
Peter A . McCullough, MD, MPH, ―Scope of Cardiovascular Complications in Patients with Kidney Diseaese‖, Journal of Ethnicity &
Disease, Volume 12 2002.

GRIFFIN SECURITIES EQUITY RESEARCH 2


CorMedix Inc. August 24, 2010

PROGRAM HIGHLIGHTS
NEUTROLIN® (CRMD003) – A BREAKTHROUGH PRODUCT IN INFECTION CONTROL
 Favorable Neutrolin® clinical data support advancement into pivotal trial for the prevention of
catheter-related bloodstream infection and maintenance of catheter function in patients
receiving hemodialysis for the treatment of end-stage renal disease, a large unmet medical
need. Four published clinical studies demonstrate the potential to significantly improve the ability to
2,3,4,5
prevent catheter-related bloodstream infection. The commercial opportunity for an antimicrobial
that has broad-spectrum activity, prevents bacteremia and fungal infection resulting from biofilm
structures in catheters, and does not lead to antibiotic resistance or systemic side effects is
significant. The market potential for the initial indication is close to $300 million, and expansion into
other areas that rely on central venous catheters and peripherally inserted central catheter use for
chemotherapy, systemic antibiotic therapy, or total parenteral nutrition, could expand the potential
target market to $675 million.
 The Center for Disease Control (CDC) has identified catheter-related bloodstream infection as
one of its seven major healthcare challenges. Neutrolin® has tremendous potential to address
this unmet medical need. Neutrolin® is a broad-spectrum antimicrobial compound that prevents
bacterial biofilm from developing in the catheter and eradicates existing biofilm growth. Bacteremia,
which has been linked to biofilm, is a serious complication of dialysis catheter use that often leads to
major systemic complications, including endocarditis, osteomyelitis, epidural abscess, septic arthritis,
6,7,8,9
and even death. The Center for Disease Control (CDC) estimates that 65% of hospital-acquired
infections in the U.S. are caused by microbial biofilms formed on indwelling medical devices,
including catheters. Studies have shown that annual healthcare costs for treating catheter-related
10
bloodstream infection alone may exceed $800 million annually (in hemodialysis alone). Additionally,
recent reports from the National Nosocomial Infections Surveillance (NNIS) System and CDC show
rapidly increasing rates of resistance by some common pathogens associated with catheter-related
bloodstream infection to antibiotics (including methicillin, gentamycin, and vancomycin). Neutrolin®
has tremendous potential to positively impact vascular access outcomes for many patients who rely
on central venous catheters and are at significant risk of catheter-related bloodstream infection.
 Neutrolin® aims to establish the first FDA-approved catheter-related bloodstream infection
prevention treatment. Dr. Michael Allon, principal investigator (PI) of Neutrolin® and a pioneering
physician whose work in hemodialysis and vascular access has brought him recognition as one of the
world‘s foremost experts, stated that ―We observed a dramatically lower frequency of hemodialysis
catheter-related bacteremia among patients whose tunneled catheters were instilled with Neutrolin®. 11
I look forward to CorMedix initiating the final phase of the drug development program that could
establish the first FDA-approved catheter-related bloodstream infection prevention treatment.‖12

2
Allon, M. Prophylaxis Against Dialysis Catheter-Related Bacteremia with a Novel Antimicrobial Lock Solution. Clin Infect Dis, 2003.
36: p. 1539-44.
3
Betjes, M.G.H. and van Agteren, M., Prevention of Dialysis Catheter-Related Sepsis with a Citrate-Taurolidine-Containing Lock
Solution. Nephrol Dial Transplant, 2004. 19(6): p. 1546-51.
4
Taylor. J of Renal Care 2008. 34(3): 116-20.
5
Sodemann. Poster. American Society of Nephrology. 2001.
6
Marr, K.A. et al. Catheter-related bacteremia and outcome of attempted catheter salvage in patients undergoing hemodialysis. Ann
Intern Med 1997. 127: p. 275-80.
7
Beathard, G.A. Management of bacteremia associated with tunneled-cuffed hemodialysis catheters. J Am Soc Nephrol 1999. 10:
1045-9.
8
Tanriover, B. et al. Bacteremia associated with tunneled dialysis catheters: comparison of two treatment strategies. Kidney Int
2000. 57: p. 2151-5.
9
Krishnasami, Z. et al. Management of hemodialysis catheter related bacteremia with an adjunctive antibiotic lock solution. Kidney
Int 2002. 61: p. 1136-42.
10
Allon, M., Prophylaxis Against Dialysis Catheter-Related Bacteremia: A Glimmer of Hope. Am J Kidney Dis, 2008. 51(2): 165-68.
11
Allon, M. Prophylaxis Against Dialysis Catheter-Related Bacteremia with a Novel Antimicrobial Lock Solution. Clin Infect Dis,
2003. 36: p. 1539-44.
12
Griffin Securities conference call, June 25, 2010.

GRIFFIN SECURITIES EQUITY RESEARCH 3


CorMedix Inc. August 24, 2010

CRMD001 (NEWLY FORMULATED DEFERIPRONE) FOR THE PREVENTION OF ACUTE KIDNEY


INJURY
 Deferiprone is designed for the prevention of morbidity and mortality associated with
contrast-induced nephropathy (CIN). The Company‘s first targeted indication for CRMD001 is for
the prevention (decrease in rate of incidence) of morbidity and mortality associated with acute kidney
injury in subjects with moderate to severe chronic kidney disease and other risk factors undergoing
interventional cardiac procedures and receiving an iodinated radio-contrast agent. There are multiple
lines of evidence that form the scientific and clinical basis for the potential efficacy of CRMD001 in
preventing morbidity and mortality associated with x-ray dye. Patients with moderate to severe
chronic kidney disease are at an elevated risk of contrast-induced nephropathy because they have
increased renal iron content, in addition to chronic oxidative stress, inflammation, endothelial
dysfunction, and other damage to the renal system. It is believed that by binding and translocating
this excess iron, deferiprone minimizes the generation of reactive oxygen species, resulting in
reduced damage to cell structures via oxidative stress.
 The Company is advancing its iron-binding/chelating drug, CRMD001, in a Phase II trial for the
prevention of contrast induced nephropathy in high-risk patients with chronic kidney disease
by removing the excess labile, or "toxic", iron associated with X-ray dyes/imaging
procedures. A Phase II study commenced in 2Q ‗10 with favorable Phase II data expected to lead
to a pivotal Phase III trial in 2H ‗11. We forecast annual peak sales potential of $365 million in the US
for CRMD001‘s first indication, contrast-induced nephropathy.
 There is a great body of evidence supporting CRMD001‟s use and safety in patients. CRMD001
has previously been administered safely in over 7,500 patients in numerous studies in a variety of
indications and approved and available for sale in 50 countries worldwide (ex-U.S.) as a treatment
option for iron overload disorders. There is, however, no U.S. FDA-approved preventative agent for
contrast-induced nephropathy, which represents a new indication with a clear unmet medical need.
This is CRMD‘s initial focus with its CRMD001 program in the U.S. Excess labile iron pools appear to
be one of the key causes of contrast-induced nephropathy that may lead to cardiovascular
13,14
complications, permanent kidney damage, and possibly death. Increasing evidence, including a
July 2010 publication in the Canadian Journal of Physiology and Pharmacology, suggests that iron
redistribution may be an effective therapeutic strategy to pursue to treat diseases of iron
15
accumulation. Excess labile iron pools appear to be one of the key causes of contrast-induced
16,17
nephropathy, so an iron-targeting agent such as deferiprone may be the ideal treatment strategy.

*Zachary Ajzenman of Griffin Securities, Inc., assisted with the research for this report.

13
Dangas G. et al. Contrast-induced nephropathy after percutaneous coronary interventions in relation to chronic kidney disease
and hemodynamic variables. Am J Cardiol, 2005. 95(1): 13-9.
14
Rihal et al. Incidence and prognostic importance of acute renal failure after percutaneous coronary intervention. Circulation, 2002.
105(19): 2259-64.
15
Kakhlon, O. et al. Iron redistribution as a therapeutic strategy for treating diseases of localized iron accumulation. Can J Physiol
Pharmacol, 2010. 88: 187-96.
16
Bakris, G. et al. Radiocontrast medium-induced declines in renal function: a role for oxygen free radicals. Am J Physiol, 1990.
285: F115-20.
17
Yoshioka, T. et al. Reduced activity of antioxidant enzymes underlies contrast media-induced renal injury in volume depletion.
Kidney Int, 1992. 41(4): 1008-15.

GRIFFIN SECURITIES EQUITY RESEARCH 4


CorMedix Inc. August 24, 2010

TABLE OF CONTENTS
COMPANY OVERVIEW ............................................................................................................................... 6
PRODUCT DEVELOPMENT PIPELINE ............................................................................................................. 6
ANTICIPATED EVENTS & MILESTONES .................................................................................................. 7
®
NEUTROLIN (CRMD003) ........................................................................................................................... 7
CRMD001 (NEWLY FORMULATED DEFERIPRONE) ....................................................................................... 7
MANAGEMENT ............................................................................................................................................ 8
BOARD OF DIRECTORS ................................................................................................................................ 8
CARDIORENAL SCIENTIFIC ADVISORY BOARD .............................................................................................. 9
®
NEUTROLIN EXECUTIVE COMMITTEE .......................................................................................................... 9
®
ABOUT NEUTROLIN (CRMD003) ........................................................................................................... 11
®
NEUTROLIN ‟S FORMULATION ................................................................................................................... 12
CLINICAL TRIAL RESULTS (TAUROLIDINE 1.35% AND CITRATE 4% FORMULATION) ..................................... 13
UPCOMING PIVOTAL TRIAL ........................................................................................................................ 14
INTELLECTUAL PROPERTY ......................................................................................................................... 14
®
COMPETITIVE LANDSCAPE FOR NEUTROLIN .............................................................................................. 15
ABOUT CRMD001 (NEWLY FORMULATED DEFERIPRONE)................................................................ 16
PROOF-OF-CONCEPT PHASE II STUDY AND UPCOMING PIVOTAL PHASE III STUDY WITH SPA ...................... 18
INTELLECTUAL PROPERTY ......................................................................................................................... 18
COMPETITIVE LANDSCAPE FOR CRMD001 ................................................................................................ 19
ABOUT CRMD004 ...................................................................................................................................... 20
ABOUT CRMD002 ...................................................................................................................................... 20
INVESTMENT CONCERNS AND RISKS .................................................................................................. 21
FINANCIAL FORECASTS & VALUATION ................................................................................................ 22
HISTORICAL BALANCE SHEET ................................................................................................................... 22
REVENUE ASSUMPTIONS ........................................................................................................................... 23
INCOME STATEMENT ................................................................................................................................. 24
DISCOUNTED CASH FLOW (DCF) MODEL................................................................................................... 25
APPENDIX A: HEMODIALYSIS OVERVIEW ............................................................................................ 26
DISCLOSURES .......................................................................................................................................... 28

GRIFFIN SECURITIES EQUITY RESEARCH 5


CorMedix Inc. August 24, 2010

COMPANY OVERVIEW
CorMedix Inc. (NYSE AMEX: CRMD) is a clinical-stage pharmaceutical company. CRMD‘s most
®
advanced product is Neutrolin , an antimicrobial/anticoagulant solution containing taurolidine (1.35%),
citrate (4%), and heparin (1000 u/ml). Intended for local use, it is expected to enter a pivotal clinical trial to
prevent catheter-related bloodstream infection and maintain catheter function as a catheter lock solution.
CRMD‘s second product is CRMD001, an oral, small molecule iron chelator in studies for the prevention
of contrast-induced nephropathy, a form of acute kidney injury, in high-risk patients with chronic kidney
disease. Additional pipeline candidates include CRMD004, a gel formulation of Neutrolin®, and
CRMD002, a urine test to diagnose chronic kidney disease.

CorMedix was founded as a Delaware corporation in 2006 under the name Picton Holding Company, Inc.
The Company changed its name to CorMedix Inc. in 2007 and became a publicly-traded company in
March 2010 following its initial public offering (IPO).

PRODUCT DEVELOPMENT PIPELINE

Neutrolin® Clinical Development


Pivotal Clinical Trial (Prevention of Catheter-Related Bloodstream Infection) – Expected to Initiate 1H
‘11

CRMD001 (Newly Formulated Deferiprone) Clinical Development


Phase II Proof-of-Concept Clinical Trial (Prevention of Contrast-Induced Nephropathy in Patients with
Chronic Kidney Disease) – Preliminary Data Expected End of CY ‘10
Pivotal Phase III Clinical Trial (Prevention of Contrast-Induced Nephropathy in Patients with Chronic
Kidney Disease) – Expected to Begin 2H ‘11

Other Pipeline Candidates


CRMD004 – Gel Formulation of Neutrolin® for catheter-related bloodstream
CRMD002 – Urine Test to Diagnose Chronic Kidney Disease

(Intentionally left blank)

GRIFFIN SECURITIES EQUITY RESEARCH 6


CorMedix Inc. August 24, 2010

ANTICIPATED EVENTS & MILESTONES

Development
Timeline
4Q ‘10– IDE 1H ‘11 – Initiate 1H ‘12 – Release 1H ‘13 – FDA approval
submission for pivotal trial of preliminary data from for Neutrolin® via
Neutrolin® Neutrolin® pivotal trial PMA
2011 2012 2013
Neutrolin®

1H ‘12 – File Premarket


Approval (PMA) 2H ‘12 – Release
2H ‘10 – Preliminary 1H ‘11 – Release 2H ‘11 – Initiate application 2H ‘13 – FDA
final data from
data from CRMD001 final data from pivotal Phase III Phase III DEFEND- approval of
Phase II CRMD001 Phase II DEFEND-AKI trial AKI trial CRMD001
2011 2012 2013
CRMD001

4Q ‘12 – File NDA


for CRMD001
approval

NEUTROLIN® (CRMD003)
4Q „10 – Investigational Device Exemption (IDE) submission.

1H „11 – Initiate pivotal clinical trial of Neutrolin® in catheter-related bloodstream infection prevention.

1H „12 – Release of preliminary data from the pivotal clinical trial.

1H „12 – File Premarket Approval (PMA) application.

1H „13 – FDA approval of Neutrolin® via PMA.

CRMD001 (NEWLY FORMULATED DEFERIPRONE)


2H „10 – Preliminary data from deferiprone Phase II proof-of-concept study.

1H „11 – Release of final data from deferiprone Phase II proof-of-concept study.

2H „11 – Initiate pivotal Phase III DEFEND-AKI trial.

2H „12 – Release final data from pivotal Phase III DEFEND-AKI trial.

4Q „12 – File New Drug Application (NDA) for CRMD001 approval.

2H „13 – FDA approval of CRMD001.

GRIFFIN SECURITIES EQUITY RESEARCH 7


CorMedix Inc. August 24, 2010

MANAGEMENT
John C. Houghton – President, Chief Executive Officer
Joined CorMedix in 2007
20 years of experience spans from global strategic to affiliate tactical roles covering the full
product life-cycle from research through generics, biologicals and devices
Established the global sales and marketing infrastructure for the Biotech division of Stryker
Prior to Stryker Biotech, worked at Aventis for over 14 years where he led the global launch of
Nasacort®
Mark T. Houser, MD, MBA – Chief Medical Officer
Joined CorMedix in 2007
At Johnson & Johnson (OrthoBiotech) responsible for clinical development projects in oncology
and critical care, business development projects focused on the cardiorenal area, had Medical
Affairs responsibilities, and was an internal nephrology consultant to J&J family of companies
Clinical Medical Director of a dialysis network and performed research in areas of oxidative stress
and acute kidney injury as a clinical and academic Nephrologist
Brian Lenz, CPA, MBA – Chief Financial Officer
Joined CorMedix in February 2010
15 years of financial and operational experience
Served as Chief Financial Officer and Treasurer at Arno Therapeutics, VioQuest
Pharmaceuticals, and Chiral Quest
Served as Senior Auditor at KPMG, LLP

BOARD OF DIRECTORS
Russell H. Ellison, MD, MSc – Director (Chairman of the Board)
Director of the Company and Chairman of the Board since 2007
Executive Vice President, Paramount BioSciences
Served as Vice President, Clinical Development of Fibrogen, Inc.
Served as Vice President, Medical Affairs and Chief Medical Officer of Sanofi-Synthelabo, USA
Served as Vice President, Medical Affairs and Chief Medical Officer of Hoffman-La Roche, Inc
Bamdad (Bami) Bastani, PhD – Director
Director of CorMedix since February 2010
Chairman, VSSB Medical Nanotechnology Inc.
Chairman, B2Global Consulting
Served as President and CEO of Anadigics, Inc. a provider of semiconductor solutions
Richard M. Cohen – Director
Director of CorMedix since 2009
Since 2002 served as a Managing Director of Encore/Novation
Served as Chief Financial Officer of Dune Energy
Gary A. Gelbfish, MD – Director
Director of CorMedix since 2009
Been in private practice as a Vascular Surgeon since 1990, also has practiced vascular surgery
at Beth Israel Hospital and NYU Downtown Hospital

GRIFFIN SECURITIES EQUITY RESEARCH 8


CorMedix Inc. August 24, 2010

Tim M. Hofer – Director


Director of CorMedix since 2007, appointed secretary in 2006
Senior Vice President, Legal Affairs for Paramount BioCapital, Inc. and Paramount Biosciences,
LLC
Antony E. Pfaffle, MD – Director
Director of CorMedix since 2007
Since 2007 has been a Partner at Bearing Circle Capital, L.P.
Principal and Founder of Black Diamond Research from 2001 to 2005
Served as Managing Director at Paramount BioCapital, Inc. and Senior Vice-President of
Business Development at Paramount Biosciences, LLC
John C. Houghton BSc – President/CEO – see management team

CARDIORENAL SCIENTIFIC ADVISORY BOARD


Vivian Fonseca, MD
Professor of Medicine, Tulane University Medical Center, Director of the Diabetes Program
Authored or co-authored over 200 professional publications and is Editor-in-Chief of Diabetes
Care and of Journal of the Metabolic Syndrome
Charles Herzog, MD
Director, Cardiovascular Special Studies Center, United States Renal Data System
Professor of Medicine, University of Minnesota
Cardiologist at Hennepin County Medical Center (HCMC)
Joseph Bonventre, MD
Robert H. Ebert Professor of Medicine, Harvard Medical School
Director of the Renal Division, Brigham and Woman‘s Hospital
Giuseppe Remuzzi, MD
Director, Negri Bergamo Laboratories of the Mario Negri Institute for Pharmacological Research
Director, Department of Immunology and Clinical Transplantation of the Ospedali Riuniti di
Bergamo, Italy
Served on editorial board of the New England Journal of Medicine
Sudhir V Shah, MD
Professor of Internal Medicine and Director, Division of Nephrology at the University of Arkansas
College
Chief of the Nephrology Section at the John L. McClellan Memorial Veterans Hospital
Served on the editorial boards of Kidney International, Journal of the American Society of
Nephrology, American Journal of Kidney Disease, and American Journal of Physiology
Z. Ioav Cabantchik, MD, PhD
Professor of Biological Chemistry, Hebrew University of Jerusalem, Israel
Authored more than 150 peer-reviewed articles
Recognized expert on catalytic iron and iron metabolism

NEUTROLIN® EXECUTIVE COMMITTEE


Michael Allon, MD - PI
Professor of Medicine, University of Alabama
Principal Investigator of the pilot Neutrolin study in U.S.

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CorMedix Inc. August 24, 2010

Alfred K. Cheung, MD
Professor of Medicine, Chief of Division of Nephrology & Hypertension, Executive Director of
Dialysis Program, University of Utah
Charmaine Lok, MD
Medical Director of the Renal Management and Hemodialysis Vascular Access Programs,
University of Toronto Health Network
Michele Mokrzycki, MD
Professor of Clinical Medicine, Albert Einstein College of Medicine

(Intentionally left blank)

GRIFFIN SECURITIES EQUITY RESEARCH 10


CorMedix Inc. August 24, 2010

ABOUT NEUTROLIN® (CRMD003)


Neutrolin (CRMD003) is an antimicrobial/anticoagulant solution containing Taurolidine
®

taurolidine (1.35%), citrate (4%), and heparin (1000 u/ml) that is expected to
enter a pivotal clinical trial in the 1H ‗11 for local use as a catheter lock
®
solution (CLS). Neutrolin is designed to prevent catheter-related
bloodstream infections and clotting in patients receiving hemodialysis with
central venous catheters. (Please see Appendix: Hemodialysis Overview for Citrate
more information on hemodialysis.) Catheter-related bloodstream infection is
a serious complication resulting from catheter use. It occurs frequently; the
average hemodialysis patient has approximately one to two episodes of
catheter-related bloodstream infection per year, and nearly 50% of
hemodialysis patients suffer from catheter-related bloodstream infection
18
within six months of starting hemodialysis with a central venous catheter.
Current treatment options for catheter-related bloodstream infection range
from systemic antibiotics administered in an outpatient setting to hospitalization and advanced therapeutic
procedures, depending on the severity of the infection. Up to 10% to 20% of catheter-related bloodstream
infection cases result in metastatic infections, such as endocarditis, osteomyelitis, or sepsis, which require
19
long-term treatment, often in the hospital setting. Catheter-related bloodstream infection is also costly to
the healthcare system, with treatment for a single episode estimated to cost up to $45,000 and total
estimated yearly costs of $800 million for all catheter-related bloodstream infections in the central venous
20,21
catheter hemodialysis population. There is currently no FDA-approved product for catheter-related
bloodstream infection prevention, creating a significant unmet medical need and a potential opportunity
®
for Neutrolin to be first-to-market if approved.
®
Neutrolin is designed to prevent catheter-related bloodstream infection by preventing the formation of
biofilm in central venous catheters. Bacterial biofilm, made up of a complex community of bacteria,
usually forms within 24 hours in all central venous catheters and is thought to be the primary source of
22,23 ®
catheter-related bacteremia. Used prophylactically, Neutrolin is instilled into the catheter lumen at the
end of each dialysis session to prevent biofilm formation. According to the biofilm hypothesis, preventing
biofilm and microbial colonization between dialysis sessions should reduce the occurrence of catheter-
related bloodstream infection, a result supported by clinical data from several studies using varying
catheter lock solution formulations of antimicrobials and antibiotics. Seven catheter lock solution studies
completed between 2003 and 2008, illustrated in Figure 1 below, demonstrated an astounding 50% to
100% reduction in catheter-related bloodstream infection for patients receiving antimicrobial locks versus
patients receiving conventional heparin locks.

18
Allon, M., Prophylaxis Against Dialysis Catheter-Related Bacteremia: A Glimmer of Hope. Am J Kidney Dis, 2008. 51(2): 165-68.
19
Allon, M., Prophylaxis Against Dialysis Catheter-Related Bacteremia: A Glimmer of Hope. Am J Kidney Dis, 2008. 51(2): 165-68.
20
Lok, C.E., Fistula First Initiative: Advantages and Pitfalls. Clin J Am Soc Nephrol, 2007. 2(5): p. 1043-53.
21
Allon, M., Prophylaxis Against Dialysis Catheter-Related Bacteremia: A Glimmer of Hope. Am J Kidney Dis, 2008. 51(2): 165-68.
22
Donlon, R.M., Biofilm Formation: A Clinically Relevant Microbiological Process. Clin Infect Dis, 2001. 33(8): p. 1387-92.
23
LaPlante, K.L. and L.A. Mermel, In Vitro Activity of Daptomycin and Vancomycin Lock Solutions on Staphylococcal Biofilms in a
Central Venous Catheter Model. Nephrol Dial Transplant, 2007. 22(8): p. 2239-46.

GRIFFIN SECURITIES EQUITY RESEARCH 11


CorMedix Inc. August 24, 2010

Figure 1: Summary of Clinical Trials with Various Catheter Lock Solutions


Summary of frequency of
catheter-related bacteremia with
antimicrobial locks versus
heparin locks in published
randomized clinical trials. Five
trials used an antibiotic lock, one
used taurolidine, and one used
30% citrate. In each study, the
catheter-related bacteremia
frequency was 50% to 100%
lower in the group with
antimicrobial lock, as compared
with heparin controls. [Allon, M.
AJKD 2008]

Despite these dramatic results, there are several important drawbacks to the catheter lock solution
formulations introduced thus far, including (i) the resulting development of highly antibiotic-resistant
infections from long-term use, (ii) the systemic toxicity of some of the agents used when they leak from
the catheter lumen into circulation, and (iii) the occurrence of catheter thrombosis (clotting). Neutrolin®
represents a potential breakthrough in catheter lock solution development by addressing all of the major
concerns noted to date with other formulations.
NEUTROLIN®‟S FORMULATION
®
Neutrolin ‘s unique formulation of an antimicrobial and two anticoagulants
NEUTROLIN® FORMULATION
should allow it to achieve anti-biofilm and anti- infection results while
addressing the main drawbacks of other catheter lock solutions, including (i) Antimicrobial
the long-term risk of creating antibiotic-resistant infection, (ii) the danger of Taurolidine 1.35%
toxicity if any of the solution leaks into circulation, and (iii) excessive Anticoagulants
®
occurrence of catheter thrombosis. The original formulation of Neutrolin that Citrate 4.0%
CRMD acquired worldwide rights to from BioLink Corporation contained just Heparin 1000 u/ml
taurolidine and citrate. While this initial formulation proved effective at
significantly reducing the occurrence of catheter-related bloodstream infection in several studies, it also
displayed inferior results in catheter patency, resulting in higher catheter thrombosis rates for patients
® ®
using Neutrolin . CRMD believes that the addition of heparin to the new Neutrolin formulation will
improve catheter patency and may test this as one of their potential endpoints in the planned pivotal trial.
®
Neutrolin ‘s main ingredient, taurolidine, is well-known as an antimicrobial agent and is commercially
available as a 2% solution in Germany, Austria, Switzerland, Poland, and the Netherlands. Taurolidine
has demonstrated effectiveness against numerous strains of antibiotic-resistant bacteria strains, as well
as several fungi, in an effective contact time of four hours in a topical or local setting. Additionally, there is
no evidence of the development of antibiotic resistance to taurolidine in humans, a critical factor for its
long-term success as a catheter lock solution. Taurolidine has also demonstrated safety as a systemic
therapy, but it does not maintain adequate concentration levels in human plasma for systemic
antimicrobial efficacy. It only needs to act locally to be successful as a catheter lock solution, and its
demonstrated systemic safety and lack of interaction with other systemic drugs means it would not be
toxic if it leaked into circulation during a hemodialysis procedure. Citrate 4% and heparin 1000 u/ml are
added to the solution to prevent blood from clotting in the catheter during the period between
hemodialysis sessions. Both ingredients are systemically safe at the indicated levels.
By offering effective antibiofilm and antimicrobial activity potentially without a high risk of long-term
antimicrobial resistance and with minimal toxicities and catheter clotting events, we believe Neutrolin®
addresses the significant unmet medical need of catheter-related bloodstream infection without any of the
drawbacks associated with other catheter lock solution and is positioned to become the first catheter lock
solution approved by the FDA for catheter-related bloodstream infection prevention in hemodialysis
patients.

GRIFFIN SECURITIES EQUITY RESEARCH 12


CorMedix Inc. August 24, 2010

CLINICAL TRIAL RESULTS (TAUROLIDINE 1.35% AND CITRATE 4% FORMULATION)


®
Neutrolin ‘s effectiveness in reducing catheter-related bloodstream infection as a catheter lock solution
has been demonstrated in several clinical trials to date using the original formulation of taurolidine 1.35%
and citrate 4%. Importantly, a trial published in Nephrology Dialysis Transplantation in 2004 demonstrated
®
a significant reduction in catheter-related bloodstream infection events in the Neutrolin group compared
24
to the control group. The study used a total of 76 catheters inserted into 58 different patients. 39 of the
catheters were randomized to heparin as the control, and the remaining 37 catheters contained
®
Neutrolin . Median catheter use was 158 days. The primary endpoint of the study was catheter-related
sepsis. The result of the primary endpoint, displayed in Figure 2 below, was four catheter-related
®
episodes in the heparin-alone group versus none in the Neutrolin group.

Figure 2: Clinical Trial Results: Neutrolin® Versus Control in Catheter-Related Sepsis

Sepsis-free survival curves for


patients with dialysis catheters
locked with heparin (broken line)
or citrate-taurolidine-containing
lock solution (solid line). [Betjes,
G.H. and van Agteren M.
Nephrol Dial Transplant 2004]

®
Additionally, Neutrolin was well-tolerated by patients with no adverse effects reported. An earlier pilot
25
study published in Clinical Infectious Diseases in 2003 found similar results. A total of 50 patients
®
participated. 20 patients received Neutrolin and 30 patients received a heparin-only control lock. The
results are displayed below in Figure 3.
Figure 3: Clinical Trial Results:
Neutrolin® Demonstrated Significant Reduction in Catheter-Related Sepsis Versus Control

Effect of catheter lock solution on


bacteremia-free survival among
patients undergoing
hemodialysis. Survival is shown
for patients receiving catheter
lock solution (solid line) and
concurrent control patients
receiving heparin (dashed line).
[Allon M. CID 2003]

®
Of the 20 patients receiving a Neutrolin lock, only one developed a catheter-related bloodstream
infection. This compares to 16 patients that developed catheter-related bloodstream infections out of 30
total patients in the control group. This study was also done in a majority of patients with catheters in

24
Betjes, M.G.H. and van Agteren, M., Prevention of Dialysis Catheter-Related Sepsis with a Citrate-Taurolidine-Containing Lock
Solution. Nephrol Dial Transplant, 2004. 19(6): p. 1546-51.
25
Allon, M. Prophylaxis Against Dialysis Catheter-Related Bacteremia with a Novel Antimicrobial Lock Solution. Clin Infect Dis,
2003. 36: p. 1539-44.

GRIFFIN SECURITIES EQUITY RESEARCH 13


CorMedix Inc. August 24, 2010

place at the time of enrollment. Since catheter biofilm develops in 24 hours, it is highly likely that the
®
presence of biofilm was already established prior to trial commencement. Given that Neutrolin patients
still benefited from a significant reduction in catheter-related bloodstream infection events, it suggests that
®
Neutrolin destroys existing biofilm colonies in addition to preventing new formations. These previous trial
®
results validate Neutrolin ‘s promising effectiveness as an infection-preventing catheter lock solution and
set the stage for the upcoming pivotal trial expected to begin in the 1H ‗11.
UPCOMING PIVOTAL TRIAL
®
CRMD anticipates beginning enrollment in a pivotal clinical trial of Neutrolin in the 1H ‗11. The
randomized trial is expected to enroll a total of 400 subjects across 30 study centers and evaluate
®
Neutrolin ‘s effectiveness in preventing catheter-related bloodstream infection as a catheter lock solution
versus a heparin control while maintaining catheter patency.
Table 1: Potential Pivotal Study Details
Estimated Enrollment: 400 randomized subjects across 30 study centers.
Active Ingredients: taurolidine 1.35%, citrate 4%, and heparin 1000 u/ml
Duration of Treatment: 180 days
Powering: 90% for each primary endpoint
Endpoints:
Primary: • Freedom from catheter-related bloodstream infections.
• Adequate catheter function is maintained.
Secondary:
• Infection rate per 1,000 catheter days.
• Various catheter function measures.
• Dialysis adequacy.
• Mortality.
Source: CorMedix, Inc.

We anticipate preliminary data from the pivotal trial by 1H ‗12 and potential FDA approval by 1H ‗13 via
the Premarket Approval (PMA) application process.
INTELLECTUAL PROPERTY
®
Table 2: Neutrolin Intellectual Property
Jurisdiction Patent Number Expiration Date
United States 7,696,182 May 4, 2025
United States 6,166,007 May 10, 2019
United States 6,350,251 January 18, 2020
United States 6,423,706 May 10, 2019
United States 6,451,003 August 16, 2020
United States 6,498,157 May 10, 2019
United States 6,569,852 May 10, 2019
United States 6,575,945 August 16, 2020
United States 6,803,363 March 31, 2022
China ZL 02108774.1 May 10, 2019
China ZL 02108777.6 August 16, 2020
Europe 1089738 May 28, 2019
Hong Kong HK 1059535 May 10, 2019
Hong Kong HK 1059746 August 16, 2020
Source: CorMedix, Inc.

GRIFFIN SECURITIES EQUITY RESEARCH 14


CorMedix Inc. August 24, 2010

The patent family relates to antimicrobial locking solutions comprising taurinamide derivatives and
biologically acceptable salts and acids with the addition of small concentrations of heparin. The present
invention relates to inhibiting or preventing infection and protecting against patency complications after a
blood catheter has been inserted in a patient comprising administering to the device a pharmaceutically
effective amount of a composition comprising: (A) at least one taurinamide derivative, (B) at least one
compound selected from the group consisting of biologically acceptable acids and biologically acceptable
salts thereof; and (C) heparin at a low concentration. The patents also relate to a method of inhibiting or
preventing infection and blood coagulation in or near a medical prosthetic device after said device has
been inserted in a patient.
COMPETITIVE LANDSCAPE FOR NEUTROLIN®
As discussed above, listed below is the current competitive landscape for Neutrolin®. Neutrolin® offers
effective antibiofilm and antimicrobial activity without a high risk of long-term antimicrobial resistance and
with minimal toxicities and catheter clotting events without many of the drawbacks associated with other
catheter lock solutions. Below are the other companies developing other catheter lock solutions. Other
antibiotic or antimicrobial coated catheters have been launched by some device companies as short term
prevention of catheter infection. These are not effective for hemodialysis catheters due to long term use
and high blood flow.
®
Table 3: Neutrolin Competitive Landscape
Company Product Formulation Development Status
Ash Access Zuragen® Methylene blue + Completed a 407 patient trial in
Technology, Inc. parabens + citrate 7% August 2008 and filed PMA. Timeline
of approval unclear. There may be
issues surrounding use of methylene
blue and un-blinding due to staining
caused by methylene blue. Need for
more clinical data unclear.
Great Lakes B-Lock Minocycline + EDTA + Planning to file IDE in 3Q ‗10 to begin
Pharmaceuticals, Inc. ethanol combinations clinical trials in human subjects.
Contains an antibiotic – minocycline –
that once implemented, long-term use
could lead to bacterial resistance.
Source: Griffin Securities, Inc. and CorMedix, Inc.

Zuragen®, developed by Ash Access Technology, Inc., is developing catheter lock solutions comprising
citrate, a paraben, and a photo-oxidant such as methylene blue. Similar to CorMedix‘s Neutrolin®, the
product is administered into a patient‘s catheter at the conclusion of each hemodialysis session.
Zuragen‘s formulation is methylene blue, citrate, and parabens, whereas Neutrolin®, a clear liquid,
combines the anti-coagulants citrate and heparin and broad-spectrum antimicrobial, taurolidine. Ash
Access completed a 407 patient clinical trial using Zuragen® in August 2008 and filed a PMA with the
FDA. We believe that the timeline for approval of Zuragen® may be uncertain because the clinical trial
was un-blinded due to the blue staining caused by methylene blue.
B-Lock™, in development by Great Lakes Pharmaceuticals, Inc., combines minocycline, EDTA, and
ethanol. In July 2010 Greak Lakes announced that they were planning to file an Investigational Device
Exemption (IDE) in 3Q ‗10 to begin clinical trials in human subjects. The issues with this formulation
revolve around minocycline, an antibiotic that once implemented, may eventually be overcome by
resistance against the antimicrobial agent that could develop with long term use necessary for permanent
use catheters used for dialysis patients.

GRIFFIN SECURITIES EQUITY RESEARCH 15


CorMedix Inc. August 24, 2010

ABOUT CRMD001 (NEWLY FORMULATED DEFERIPRONE)


CRMD001 is an oral, small molecule iron chelator being used in a proof-of-concept Deferiprone
Phase II clinical study for the prevention of contrast-induced nephropathy, a form of
acute kidney injury, in high-risk patients with chronic kidney disease. Contrast-induced
nephropathy is defined as new onset or exacerbation of renal (kidney) dysfunction
after contrast administration without other identifiable causes and may lead to
cardiovascular complications, permanent kidney damage, and increased
26,27,28
mortality. Contrast agents are commonly used in everyday radiographic
diagnostic procedures, such as X-rays and CT scans, and are typically well-tolerated
by the general population, but they may cause serious adverse events, such as
contrast-induced nephropathy, in up to 50% of high-risk patients with chronic kidney disease and
29
diabetes. There are currently no FDA-approved preventative treatments for contrast-induced
nephropathy; thus, contrast-induced nephropathy prevention represents an unmet medical need. The
Phase II proof-of-concept study commenced June 25, 2010, with preliminary data expected to be
available by the end of CY ‗10 and complete results expected in the 1H ‗11. CRMD plans to initiate a
pivotal Phase III trial of deferiprone for the prevention of contrast-induced nephropathy assuming
favorable data from the proof-of-concept Phase II study. Collaborators working with CRMD have also
published proof-of-concept studies of CRMD001 as a potential treatment for chronic kidney disease.
CRMD001 is currently approved and available for sale in 50 countries worldwide (ex-U.S.) under the
brand name Ferriprox® as a treatment option for iron overload in patients with thalassemia, a rare
inherited blood disease. Notably, CRMD001 is the most studied iron chelator with data from over 7,500
patients who have been administered deferiprone for a variety of diseases and disorders at a range of
dose levels and durations of therapy. Importantly, CRMD001 has a proven safety record at drug exposure
levels well in excess of the levels likely required for the renal indications CRMD is targeting. CRMD001 is
believed to work by mobilizing iron in reticuloendothelial, hepatocellular, and myocardial stores, from
intracellular ferritin and hemosiderin, and from transferrin and non-transferrin bound iron in the serum.
Increasing evidence suggests that iron redistribution is a valid therapeutic strategy and iron plays an
important and direct role in contrast-induced nephropathy, most likely though renal tissue injury resulting
30,31
from the generation of reactive oxygen species. The pathophysiology of contrast-induced nephropathy
32
includes increased availability of labile iron, among other effects. It is believed that by binding and
translocating excess iron, deferiprone minimizes the generation of reactive oxygen species, resulting in
reduced damage to cell structures via oxidative stress.
Patients with moderate to severe chronic kidney disease, defined as estimated glomerular filtration rate
(eGFR) less than 60 mL/min, are at an elevated risk of contrast-induced nephropathy because they have
increased renal iron content, in addition to chronic oxidative stress, inflammation, endothelial dysfunction,
and other damage to the renal system. Figure 4 shows the increased risk of contrast-induced
nephropathy as kidney function decreases as measured by eGFR:

26
Solomon, R. et al. Contrast-Induced Nephropathy and Long-Term Adverse Events: Cause and Effect? Clin J Am Soc Nephrol,
2009. 4: 1162-69.
27
Dangas G. et al. Contrast-induced nephropathy after percutaneous coronary interventions in relation to chronic kidney disease
and hemodynamic variables. Am J Cardiol, 2005. 95(1): 13-9.
28
Rihal et al. Incidence and prognostic importance of acute renal failure after percutaneous coronary intervention. Circulation, 2002.
105(19): 2259-64.
29
Parfrey P. et al. Contrast material-induced renal failure in patients with diabetes mellitus, renal insufficiency, or both. A
prospective controlled study. N Engl J Med, 1989. 320: 143-9.
30
Kakhlon, O. et al. Iron redistribution as a therapeutic strategy for treating diseases of localized iron accumulation. Can J Physiol
Pharmacol, 2010. 88: 187-96.
31
Tumlin J. et al. Pathophysiology of contrast-induced nephropathy. Am J Cardiol, 2006. 98(6A): 14K-20K.
32
Tumlin J. et al. Pathophysiology of contrast-induced nephropathy. Am J Cardiol, 2006. 98(6A): 14K-20K.

GRIFFIN SECURITIES EQUITY RESEARCH 16


CorMedix Inc. August 24, 2010

Figure 4: The Risk of Developing Contrast-Induced Nephropathy Increases in Patients with


CKD (eGFR <60 mL/min)

Source: McCullough, P. et al. Am J Cardiol. 2006.

As eGFR falls below 60 mL/min, the rate of contrast-induced nephropathy increases from approximately
10% to nearly 50%. For patients with chronic kidney disease, the increases in the labile iron pool in renal
tissue and oxygen free radicals are thought to be the critical factors leading to susceptibility to contrast-
33,34
induced nephropathy. Exposure to contrast has been associated with a further increase in catalytic
iron. This association is shown in Figure 5:
Figure 5: Increase in Catalytic Iron Associated with Contrast Agents
7.0
Baseline
6.0 48 hours after IVP
5.0 P<0.001
nmol / mg Cr

4.0
+115%
3.0

2.0

1.0

0.0
Urinary catalytic iron
Source: Rajapurkar, M. et al. ASN 2006.

48 hours following contrast administration, urinary catalytic iron levels show an increase of 115% from
baseline. Administration of an iron chelator, such as CRMD001, has been shown to protect the kidneys
from serious damage caused by contrast agents in an animal model by helping to remove this excess
catalytic iron. With oral administration, a large database of patient safety records, an ongoing Phase II
trial, and SPA designation for a potential pivotal Phase III trial, we believe CRMD001 has the potential to
become the first FDA-approved therapy for the prevention of contrast-induced nephropathy, a significant
unmet medical need.

33
Bakris, G. et al. Radiocontrast medium-induced declines in renal function: a role for oxygen free radicals. Am J Physiol, 1990.
285: F115-20.
34
Yoshioka, T. et al. Reduced activity of antioxidant enzymes underlies contrast media-induced renal injury in volume depletion.
Kidney Int, 1992. 41(4): 1008-15.

GRIFFIN SECURITIES EQUITY RESEARCH 17


CorMedix Inc. August 24, 2010

PROOF-OF-CONCEPT PHASE II STUDY AND UPCOMING PIVOTAL PHASE III STUDY WITH SPA
On June 25, 2010, CRMD initiated a randomized, double-blind, placebo-controlled Phase II proof-of-
concept study of CRMD001 for the prevention of contrast-induced nephropathy in patients with chronic
35
kidney disease. The study is expected to enroll approximately 60 patients at several centers in the U.S.
The primary endpoint is to assess the impact of CRMD001 compared to placebo on measures of kidney
injury following contrast usage. Secondary endpoints include measures of the safety and tolerability of
CRMD001 for short-term use. Preliminary interim data is anticipated to be available by the end of CY ‗10
and complete results are expected in the 1H ‗11. We expect CRMD to use the results from the Phase II
study to initiate a pivotal Phase III study.
CRMD‘s potential pivotal Phase III with SPA is called DEFEND-AKI and will evaluate CRMD001‘s ability
to reduce kidney damage in high-risk patients with chronic kidney disease receiving dye injections for
cardiac angiography imaging.
Table 4: Potential Pivotal Phase III Study Details
Estimated Enrollment: 800 randomized subjects
Dosing: Oral, one immediate release & two extended release tablets before imaging, two tablets daily for eight days post-imaging
Powering: 80% for the primary endpoint
Composite Endpoint: MACE (death, myocardial infarction, dialysis, stroke, heart failure, or re-hospitalization)
Source: CorMedix, Inc.

INTELLECTUAL PROPERTY
Since deferiprone is already marketed in approximately 50 countries outside of the United States as a
treatment for iron overload in a rare condition called thalassemia, CorMedix‘s marketing exclusivity
strategy for CRMD001 (novel formulation of deferiprone) is primarily focused on being the first marketed
preventive agent for contrast-induced nephropathy (with morbidity and mortality claims) which would
provide five years of marketing exclusivity provisions under the Hatch-Waxman Act. In parallel, given that
there are fewer than 200,000 contrast-induced nephropathy patients (incidence) in the U.S., orphan
designation would also be pursued with the FDA, which would likely provide seven years of exclusivity
(two years added on to base exclusivity). Furthermore, deferiprone with a morbidity-mortality claim could
rapidly become the standard of care due to medical safety issue/litigation risk, which would provide a
significant hurdle to potential followers. There are other potential indications for deferiprone, including
pediatric uses. If clinical studies of CRMD001 are conducted in children, an additional six months of
exclusivity could be added to the exclusivity periods. In addition, if CRMD001 is first to market, it will also
be considered a Reference Listed Drug, at least for so long as no other deferiprone product is approved
by the FDA. CorMedix will be able to list any of its patents claiming its approved deferiprone formulation
and associated approved uses in the Orange Book (an FDA reference of approved drugs and therapeutic
equivalence evaluations). This could further delay generic competition.
In addition, CorMedix has also amassed an IP portfolio of claims that are related to both the diagnosis
and treatment of human kidney diseases as it relates to iron chelation. This is important for potential
expansion of deferiprone‘s product utility. In particular, the patents focus on the progression of kidney
disease that essentially can be halted and the severity of kidney disease can be reduced by the
administration of iron chelators to humans afflicted with a progressive kidney disease. The patent
methods include measuring catalytic iron content in urine in a human afflicted with a progressive kidney
disease and administering an iron chelator to the human. The method can include measuring total urinary
protein content, blood urea nitrogen or creatinine in a blood sample before, during or after the
administration of an iron chelator.

35
CorMedix, Inc. press release. CorMedix Doses First Patient in Phase II Clinical Trial of CRMD-001. June 25, 2010.

GRIFFIN SECURITIES EQUITY RESEARCH 18


CorMedix Inc. August 24, 2010

Table 5: CRMD001 Intellectual Property


Jurisdiction Patent Number Expiration Date
United States 6,906,052 April 20, 2020
United States 6,908,733 April 20, 2020
United States 6,933,104 April 20, 2020
United States 6,995,152 April 20, 2020
United States 6,998,396 April 20, 2020
United States 7,037,643 April 20, 2020
United States 7,045,282 April 20, 2020
United States 7,235,542 April 20, 2020
Australia 2004201714 April 20, 2020
Europe 1173757 April 21, 2020
Source: CorMedix, Inc..

COMPETITIVE LANDSCAPE FOR CRMD001


Currently, there are no FDA-approved preventative treatments for contrast-induced nephropathy. Current
practice for high-risk patients is hydration with 0.9% saline or bicarbonate before and after imaging. Other
treatment options include theophylline/aminophylline, statins, vitamin C, prostaglandin E1, and N-acetyl
cysteine, but study results for these other options are either limited by insufficient data, inconclusive, or
conflicting.
Iron chelators, including Desferal®, EXJADE®, Ferriprox®, and FBS0701, that are currently marketed in
various countries around the world or in development may compete against CRMD001, though
CRMD001 holds significant advantages over the three commercially-available products. We believe that
none are suited for use in cardiorenal disease and that CorMedix‘s patents would preclude the marketing
of any iron chelator for cardiorenal indications without a cross-license. We do not believe that currently
available iron traps are suited for development for the prevention (decrease in the rate of incidence) of
morbidity and mortality associated with contrast-induced nephropathy either because of an intravenous
form of delivery in the case of deferoxamine or because of documented renal toxicity in the case of
desferasirox (Exjade®).
A comparison of CRMD001 with the other three currently marketed iron chelators is found in Table 6
below:

Table 6: CRMD001
T Compared to Marketed Iron Chelators
Deferiprone Deferiprone Desferasirox Deferoxamine
CRMD-001 Ferriprox® Exjade® Desferal®
(CorMedix)
Route: Oral IR/ER Oral IR Oral daily I.V./S.C.
(b.i.d) (t.i.d)
Renal Toxicity: No No Yes No
Active drug in urine: Yes Yes No Yes
Method of use patents in Yes No No No
cardiorenal disease:
Effective at redistributing iron/ Yes Yes Yes No
membrane permeable:
Launch date: N/A 2000 EU 2006 1970s
Source: CorMedix and Griffin Securities, Inc.

Deferoxamine (Desferal®) has been available for the longest period of time. Derefoxamine has proven to
induce net iron excretion, deplete iron from the heart, and extend life by reducing total body iron. Because
of poor oral bioavailability (large molecule), it is given intravenously or subcutaneously over an 8-12 hour
period 5-6 days per week, making compliance an issue. The large size of the molecule does not
adequately penetrate cells and does not access iron stores as effectively as CRMD001. Further, we
believe the parenteral delivery system will preclude its use in CorMedix‘s targeted indications.

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CorMedix Inc. August 24, 2010

The Ferriprox® brand of deferiprone is sold in Europe and Asia as a 500mg immediate release
formulation with a high Cmax (associated with nausea) that must be given three times daily, exhibiting a
completely different pharmacokinetic profile from the CorMedix formulations.
Desferasirox (ExJade®) is an oral iron trap that has frequent and significant renal adverse events
(increasing proteinuria and creatinine) including cases of fatal renal failure, making it unlikely, in our
opinion, that this product could be used for cardiorenal indications.
Another company, FerroKin BioSciences, is developing a novel ion-binding compound FBS0701 for
patients who have iron overload from chronic transfusions. A fourth clinical trial is scheduled to begin later
this year. Preliminary evidence suggests that it may also be more nephrotoxic than CRMD001.
Transfusional iron-overload is a common complication in the treatment of anemias that required chronic
transfusions of red blood cells. These conditions include hereditable blood diseases such as b-
thalassemia and sickle cell anemia as well as anemias that develop during adulthood. Whilst FBS0701 is
a promising product, FerroKin is treating iron overload caused by chronic transfusions versus CorMedix‘s
CRMD001 designed for contrast-induced nephropathy.
Prophylactic strategies currently under investigation include nesiritide, Reprieve® Endovascular
Temperature Therapy, Benephit® CV Infusion System, and RenalGuard® therapy.
• Reprieve® Endovascular Temperature Therapy — cooling system for core body temperature
• Benephit® CV Infusion System — renal artery infusion catheter for targeted drug delivery or
fluids
• RenalGuard® Therapy — matched fluid replacement device
These potential treatment options are all more complex to administer compared to the oral CRMD001
tablet. Nesiritide is only available through intravenous administration, and the other three options are
complex medical devices that use catheter systems to access the renal system.
We believe that none of these approaches will match the efficacy and simplicity of a short course of
CRMD001 tablets given before and after contrast administration.

ABOUT CRMD004
CRMD004 is a next-generation gel formulation of Neutrolin® in early stages of development. It is currently
being considered for the prevention of catheter-related bloodstream infection and for the maintenance of
catheter patency in a variety of settings, including hemodialysis, chemotherapy, and intravenous nutrition
administration. The gel is thixotropic, meaning it is designed to be semi-solid when it is in the catheter but
change to liquid under pressure during insertion into and withdrawal from the catheter. This property
could help prevent spillage from the catheter in the event that the catheter becomes disengaged and
could also eliminate the need for an anticoagulant within the formulation.

ABOUT CRMD002
CRMD002 is a diagnostic test in early stages of development that could potentially be used to identify
patients with chronic kidney disease, patients at risk of developing chronic kidney disease, and as a
monitoring tool to be used with deferiprone. CRMD002 is being developed as a urine test for the detection
of labile iron, or highly reactive iron that can damage cells through oxidative stress that is found in
increased levels in patients with chronic kidney disease.

GRIFFIN SECURITIES EQUITY RESEARCH 20


CorMedix Inc. August 24, 2010

INVESTMENT CONCERNS AND RISKS


For a complete description of risks and uncertainties related to CorMedix Inc.‟s business, see the
“Risk Factors” section in CorMedix‟s SEC filings, which can be accessed directly from the SEC
Edgar filings at www.sec.gov. Potential risks include:

 Stock risk and market risk: There is a limited trading market for the Company‘s common stock.
There can be no assurance that an active and liquid trading market will develop or, if developed, that
it will be sustained, which could limit one‘s ability to buy or sell the Company‘s common stock at a
desired price. Investors should also consider technical risks common to many small-cap or micro-cap
stock investments, such as small float, risk of dilution, dependence upon key personnel, and the
strength of competitors that may be larger and better capitalized.
 Initial Public Offering share lockup expiration risk: The lockup expiration date for certain
restricted equity issued in the Company‘s Initial Public Offering and the issuance of equity associated
with convertible debt is September 22, 2010. Potential new equity issuance includes 1,022,154
common shares to licensors at par value ($0.001/share), 621,689 common shares to founders at par
value ($0.001/share), and 5,914,445 common shares to convertible debt holders at $3.125/share and
$2.1875/share. Selling of these common shares following the lockup date may result in downside risk
to CorMedix‘s share price.
 New and rapidly changing field: The pharmaceutical and biotechnological markets are rapidly
evolving, and research and development are expected to continue at an accelerated pace with
increased frequency. Other companies are also actively engaged in the development of therapies to
directly or indirectly treat those disorders being pursued by CorMedix. These companies may have
substantially greater research and development capabilities, as well as significantly greater
marketing, financial, and human resources abilities than CorMedix.
 Products still in development phases: Although the Company intends to continue with clinical
®
development of Neutrolin for the prevention of catheter-related bloodstream infection, CRMD001 for
the prevention of contrast-induce nephropathy, and other future pipeline candidates in various
indications, the successful development of the Company‘s product candidates is uncertain. Product
development costs and timelines can vary significantly for each product candidate and are difficult to
accurately predict. In addition, products in development that appear to be promising may not reach
commercialization for various reasons, including failure to achieve regulatory approvals, safety
concerns, and/or the inability to be manufactured at a reasonable cost.
 Funding requirements: It is difficult to predict the Company‘s future capital requirements. The
Company may need additional financing to continue funding the research and development of its
products and to expand its business. There is no guarantee that it can secure the desired future
capital or, if sufficient capital is secured, that current shareholders will not suffer significant dilution.
 Regulatory risk: Various statutes and regulations also govern or influence the manufacturing, safety,
labeling, storage, record keeping and marketing of each product. The lengthy process of seeking
approval and the subsequent compliance with applicable statutes and regulations require the
expenditure of substantial resources. Any failure by us to obtain, or any delay in obtaining, regulatory
approvals could materially adversely affect CorMedix‘s business. There is no guarantee that
CorMedix‘s products will be approved by the U.S. Food and Drug Administration (FDA) or
international regulatory bodies for marketing in the U.S. or abroad.
 The Company may need to raise additional capital, which may not be available on terms
acceptable to them, if at all: As the Company continues to expand their research and development
and sales and marketing activities, they may need to raise additional capital, which may not be
available on terms acceptable to them, if at all. If the Company cannot raise necessary additional
capital on acceptable terms, they may not be able to increase sales, develop or enhance their
products and services, take advantage of future opportunities, or respond to competitive pressures or
unanticipated requirements, any of which could cause their business to suffer.

GRIFFIN SECURITIES EQUITY RESEARCH 21


CorMedix Inc. August 24, 2010

FINANCIAL FORECASTS & VALUATION


The following assumptions refer to CRMD’s revenue model and annual earnings model. The revenue estimates are
®
for Neutrolin and CRMD001 sales in the U.S. We have not included potential upfront fees or milestone revenue
from, nor expenses associated with, CRMD’s other product candidates.

HISTORICAL BALANCE SHEET

$ in thousands
ASSETS 6/30/2010 3/31/2010
Current Assets
Cash & equivalents 10,586 11,725
Grants receivable - -
Inventory, net - -
Prepaid expenses 367 292
Total Current Assets $ 10,953 $ 12,017

Property & equipment 25 $ 28


Intangible assets - -
Other 13 25
Total Assets $ 10,991 $ 12,070

LIABILITIES
Current Liabilities
Accounts payable $ 804 $ 1,046
Accrued expenses 348 375
Senior convertible notes, net of discount - -
Interest payable - senior convertible notes - -
Notes payable - related parties - -
Interest payable - related parties - -
Notes payable - Galencia, Ltd. - -
Interest payable - Galencia, Ltd. - -
Total Current Liabilities $ 1,152 $ 1,421

Long-term debt $ - -
Other 19 -
Total Long-Term Liabilities $ 19 -

Shareholders Equity
Common Stock, par value $ 11 $ 11
Additional Paid-In Capital 43,150 42,806
Accumulated Deficit (33,341) (32,168)
Treasury Stock - -
Total Shareholders Equity $ 9,820 $ 10,649

Total liabilities & equity $ 10,991 $ 12,070

GRIFFIN SECURITIES EQUITY RESEARCH 22


CorMedix Inc. August 24, 2010

REVENUE ASSUMPTIONS
Neutrolin (CRMD003) Revenue (Hemodialysis)
Year penetration starts 2013 Incidence (dialysis sessions/yr) 53,237,184
Starting penetration rate 5% Percent addressable 24%
Years between penetration start and peak 4 Market growth rate 3%
Peak penetration 40% Price per patient per cycle $20
Duration of peak penetration in years 9 Treatment price growth 3%
Retention rate in decline years 81% Royalty rate 0%
Stage of development Pivotal Probability of commercialization 65%
 As of December 31, 2006 there were about 506,000 End-Stage Renal Disease (ESRD) patients in
36
the United States, of whom 355,000 patients were receiving hemodialysis (HD) therapy ;
37
 On average a patient receives 156 dialysis treatments per year ;
 Approximately 24% of prevalent patients use a central venous catheter (CVC) as their primary
38
vascular access ;
®
 Neutrolin penetrates the market beginning in 2013 at a price of $20 per treatment cycle;
 The price per treatment grows at an annual rate of 3%;
®
 Neutrolin penetrates the addressable market at 5% in 2013 and reaches a peak penetration of 40%
of the addressable market in 2017; and
39
 The market is projected to grow approximately 3% annually.

Deferiprone (CRMD001) Revenue (Contrast-Induced Nephropathy)


Year penetration starts 2013 Incidence 165,000
Starting penetration rate 5% Percent addressable 75%
Years between penetration start and peak 3 Market growth rate 3%
Peak penetration 40% Price per patient per cycle $2,000
Duration of peak penetration in years 3 Treatment price growth 3%
Retention rate in decline years 45% Royalty rate 0%
Stage of development Phase II Probability of commercialization 25%
 There are approximately 165,000 patients per year that inherit kidney damage caused by contrast-
40,41
induced nephropathy (CIN) ;
 Approximately 75% percent of patients with kidney damage can use deferiprone to help treat CIN;
 CRMD001 penetrates the market beginning in 2013 at a price of $2,000 per cycle;
 The price per treatment grows at an annual rate of 3%;
 CRMD001 penetrates the market the addressable market at 5% in 2013 and reaches a peak
penetration of 40% of the addressable market in 2016;
 The market is projected to grow approximately 3% annually.

36
USRDS, U.S. Renal Data System, USRDS 2009 Annual Data Report: Atlas of End-Stage Renal Disease in the United States, NIH.
37
Allon, M., Prophylaxis Against Dialysis Catheter-Related Bacteremia: A Glimmer of Hope. Am J Kidney Dis, 2008. 51(2): p. 165-
68.
38
Allon, M., Current Management of vascular access, J Am So Nephrol, 2007. 2(4): p. 786-800
39
Allon, M., Prophylaxis Against Dialysis Catheter-Related Bacteremia: A Glimmer of Hope. Am J Kidney Dis, 2008. 51(2): p. 165-
68.
40
American Society for Pharmacology and Experimental Therapeutics: Drug Metab Dispos, February 2009. 37:322-329
41
Chertow GM, Lazarus JM, Christiansen CL, Cook EF, Hammermeister KE, Grover F, Daley J: Preoperative renal risk
stratification. Circulation, 1997. 95:878-84

GRIFFIN SECURITIES EQUITY RESEARCH 23


CorMedix Inc. August 24, 2010

INCOME STATEMENT
$ in thousands, except per share data 2010 2011 2012 2013 2014

2010 2011 2012 2013 2014


Total revenue $ - $ - $ - $ 28,189 $ 90,621
COGS $ - $ - $ - 2,991 8,811
Gross profit $ - $ - $ - $ 25,197 $ 81,810

Operating expenses
R&D $ 6,000 $ 9,000 $ 17,000 $ 14,000 $ 12,000
Selling & marketing - 2,700 12,000 27,000 25,000
General & administrative 2,000 3,000 4,000 4,000 4,000
Milestones & Royalties - 1,500 1,000 3,699 3,703
Total expense 8,000 14,700 33,000 45,000 41,000

Operating profit (loss) $ (8,000) $ (14,700) $ (33,000) $ (19,803) $ 40,810

Non-operating income/expense
Interest expense (3,100) - - - -
Interest income - - - - -
Other - - - - -
Total non-operating (3,100) - - - -

Pretax profit (loss) $ (11,100) $ (14,700) $ (33,000) $ (19,803) $ 40,810


Income tax - - - - 15,508
Net income (loss) $ (11,100) $ (14,700) $ (33,000) $ (19,803) $ 25,302

Earnings (loss) per share $ (0.97) $ (0.68) $ (1.11) $ (0.66) $ 0.84

Diluted shares outstanding 11,408 21,500 29,750 30,000 30,250

Income Statement Assumptions:


 COGS of 20% of total sales for Neutrolin® and 1% of total sales for CRMD001;
 Research and Development (R&D) expenses of $6.0 million in FY2010, $9 million in FY2011, $17 million in
FY2012, $14 million FY2013, and $12 million in FY2014;
 Sales and Marketing (S&M) expense of $2.7 million in FY2011 increasing to $25 million in FY2014 to
support the commercial launches of both products;
 General and Administrative (G&A) expenses of $2.0 million in FY2010, $3.0 million in FY2011, and
$4.0 million in FY2012 to FY2014;
 Income tax rate of 38%;
 The number of shares outstanding increases due to equity financings and the exercise of stock
options and warrants.
 The lockup expiration date for certain restricted equity issued in the Company‘s Initial Public Offering
and the issuance of equity associated with convertible debt is September 22, 2010. Potential new
equity issuance includes 1,022,154 common shares to licensors at par value ($0.001/share), 621,689
common shares to founders at par value ($0.001/share), and 5,914,445 common shares to
convertible debt holders at $3.125/share and $2.1875/share.

GRIFFIN SECURITIES EQUITY RESEARCH 24


CorMedix Inc. August 24, 2010

DISCOUNTED CASH FLOW (DCF) MODEL


Our DCF model, using a discount rate of 12.5%, suggests a value of $6.60 for CRMD shares.

$ in thousands, except per share data 2010 2011 2012 2013 2014

2010 2011 2012 2013 2014


Revenue $ - $ - $ - $ 28,189 $ 90,621
Operating income (loss) (8,000) (14,700) (33,000) (19,803) 40,810
Net income (loss) (11,100) (14,700) (33,000) (19,803) 25,302

Depreciation/amortization 740 338 355 373 373


Stock-based compensation 343 349 384 423 423
Tax loss carryforwards - - - - -
Capital expenditures (16) (15) (16) (18) (18)
Asset acquisitions
Other
Total cash flow adjustments 1,067 672 723 778 778
Free cash flow $ (10,033) $ (14,028) $ (32,277) $ (19,025) $ 26,080
Gross profit weighted probability 100.0% 100.0% 100.0% 100.0% 41.3%
Risk-adjusted free cash flow $ (10,033) $ (14,028) $ (32,277) $ (19,025) $ 10,764

PV of Terminal Value at a
Discounted
Cash Flows Perpetual growth rate of rFCF Enterprise Value
Discount Rate (2008 - 2023) 2.0% 3.0% 4.0% 2.0% 3.0% 4.0%
7.5% $178,501.04 $ 350,065 $ 432,052 $ 560,889 $528,566 $610,553 $739,390
10.0% $131,346.59 $ 170,474 $ 196,738 $ 231,756 $301,821 $328,084 $363,102
12.5% $96,195.74 $ 92,717 $ 103,482 $ 116,779 $188,913 $199,678 $212,975
15.0% $69,772.26 $ 53,855 $ 58,915 $ 64,895 $123,627 $128,687 $134,667
17.5% $49,760.34 $ 32,714 $ 35,313 $ 38,297 $82,475 $85,074 $88,058

Total Equity Value Value per Diluted Share


Discount Rate Net Debt 2.0% 3.0% 4.0% 2.0% 3.0% 4.0%
7.5% $ - $528,566 $610,553 $739,390 $ 17.47 $ 20.18 $ 24.44
10.0% - $301,821 $328,084 $363,102 $ 9.98 $ 10.85 $ 12.00
12.5% - $188,913 $199,678 $212,975 $ 6.25 $ 6.60 $ 7.04
15.0% - $123,627 $128,687 $134,667 $ 4.09 $ 4.25 $ 4.45
17.5% - $82,475 $85,074 $88,058 $ 2.73 $ 2.81 $ 2.91

Terminal Value as % Enterprise Value Implied EBITDA Multiple


Discount Rate 2.0% 3.0% 4.0% 2.0% 3.0% 4.0%
7.5% 66.2% 70.8% 75.9% 11.57 14.28 18.54
10.0% 56.5% 60.0% 63.8% 7.96 9.18 10.82
12.5% 49.1% 51.8% 54.8% 6.06 6.77 7.63
15.0% 43.6% 45.8% 48.2% 4.90 5.36 5.90
17.5% 39.7% 41.5% 43.5% 4.11 4.43 4.81

GRIFFIN SECURITIES EQUITY RESEARCH 25


CorMedix Inc. August 24, 2010

APPENDIX A: HEMODIALYSIS OVERVIEW


The kidneys are organs that are responsible for removing wastes and fluids from the body, as well as
regulating bodily water and chemicals in the blood, removing toxins introduced to the body, and releasing
hormones that regulate blood pressure, the production of red blood cells, and bone development. W hen
kidneys become damaged and lose their ability to function, the result is chronic kidney disease (CKD), a
condition currently affecting approximately 26 million Americans. Up to two-thirds of CKD cases are
42
caused by diabetes and high blood pressure.
The most advanced form of CKD, end-stage renal disease (ESRD), occurs when the kidneys lose the
ability to function at a level required to sustain day-to-day life. The two main treatment options for patients
with ESRD are kidney transplant or hemodialysis. As of December 31, 2006, there were approximately
500,000 ESRD patients in the U.S., of whom approximately 355,000 (70%) were receiving
43
hemodialysis. Hemodialysis works by allowing the blood to flow through a filter that acts as an ―artificial
kidney‖ by removing wastes and extra fluids. The following diagram illustrates the typical hemodialysis
procedure.
Hemodialysis Procedure

Source: National Institute of Diabetes and Digestive and Kidney Diseases

There are three main kinds of vascular access for hemodialysis, an arteriovenous (AV) fistula, an AV
graft, and a central venous catheter (CVC). Each of the three vascular access methods is displayed
below:

AV Fistula Central Venous Catheter


AV Graft

Source: National Institute of Diabetes and Digestive and Kidney Diseases

42
National Kidney Foundation, Chronic Kidney Disease, 2010, www.kidney.org/kidneydisease/ckd/index.cfm.
43
USRDS, U.S. Renal Data System, USRDS 2009 Annual Data Report: Atlas of End-Stage Renal Disease in the United States,
NIH.

GRIFFIN SECURITIES EQUITY RESEARCH 26


CorMedix Inc. August 24, 2010

The AV fistula is the preferred vascular access method due to its high rates of blood flow, low rate of
complications, and longevity, but the AV fistula takes up to 6 months to develop and may not be
successful in all patients. If HD is necessary while the AV fistula is developing, or if the AV fistula
procedure fails, a CVC is typically the vascular access method used. Approximately 82% of patients that
start chronic HD begin treatment with a CVC, and more than 25% HD patients use a CVC as the primary
44
vascular access.

(Intentionally left blank)

44
Allon, M. Current Management of Vascular Access. Clin J Am Soc Nephrol, 2007. 2(4): p. 786-800.

GRIFFIN SECURITIES EQUITY RESEARCH 27


CorMedix Inc. August 24, 2010

DISCLOSURES
ANALYST(s) CERTIFICATION: The analyst(s) responsible for covering the securities in this report certify that the
views expressed in this research report accurately reflect their personal views about CorMedix Inc. (the ―Company‖)
and its securities. The analyst(s) responsible for covering the securities in this report certify that no part of their
compensation was, is, or will be directly or indirectly related to the specific recommendation or view contained in this
research report.

MEANINGS OF RATINGS: Our rating system is based upon 12 to 36 month price targets. BUY describes stocks
that we expect to appreciate by more than 20%. HOLD describes stocks that we expect to change plus or minus
20%. SELL describes stocks that we expect to decline by more than 20%. SC describes stocks that Griffin Securities
has Suspended Coverage of this Company and price target, if any, for this stock, because it does not currently have
a sufficient basis for determining a rating or target and/or Griffin Securities is redirecting its research resources. The
previous investment rating and price target, if any, are no longer in effect for this stock and should not be relied upon.
NR describes stocks that are Not Rated, indicating that Griffin Securities does not cover or rate this Company.

DISTRIBUTION OF RATINGS: Currently Griffin Securities has assigned BUY ratings or NO RATINGS on all of the
companies it covers. The Company has provided investment-banking services for 19% of companies in which it has
had BUY ratings in the past 12 months, 0% for companies in which it has had NR or no coverage in the past 12
months or has suspended coverage (SC) in the past 12 months.

MARKET MAKING: Griffin Securities does not maintain a market in the shares of this Company or any other
Company mentioned in the report.

COMPENSATION OR SECURITIES OWNERSHIP: The analyst(s) responsible for covering the securities in this
report receive compensation based upon, among other factors, the overall profitability of Griffin Securities, including
profits derived from investment banking revenue. The analyst(s) that prepared the research report did not receive any
compensation from the Company or any other companies mentioned in this report in connection with the preparation
of this report. The analysts responsible for covering the securities in this report currently do not own common stock in
the Company, but in the future may from time to time engage in transactions with respect to the Company or other
companies mentioned in the report. Griffin Securities from time to time in the future may request expenses to be paid
for copying, printing, mailing and distribution of the report by the Company and other companies mentioned in this
report. The Company is currently a client of Griffin Securities, Inc. Griffin Securities‘ services for the Company consist
of non-investment banking securities-related services and non-securities services. Griffin Securities has received
compensation from the Company in the past 12 months for non-investment banking services. Griffin Securities
expects to receive, or intends to seek, compensation for investment banking services from the Company in the next
three months.

PRICE CHART

BUY

Source: Yahoo.com

8/24/2010 – Initiating Coverage: share price (08/23/10): $1.45; rating: BUY; 12-month price target: $6.00.

GRIFFIN SECURITIES EQUITY RESEARCH 28


CorMedix Inc. August 24, 2010

FORWARD-LOOKING STATEMENTS: This Report contains forward-looking statements, which involve risks and
uncertainties. Actual results may differ significantly from such forward-looking statements. Factors that might cause
such a difference include, but are not limited to, those discussed in the ―Risk Factors‖ section in the SEC filings
available in electronic format through SEC Edgar filings at www.SEC.gov on the Internet.

GENERAL: Griffin Securities, Inc. (―Griffin Securities‖) a FINRA member firm with its principal office in New York,
New York, USA is an investment banking firm providing corporate finance, merger and acquisitions, brokerage, and
investment opportunities for institutional, corporate, and private clients. The analyst(s) are employed by Griffin
Securities. Our research professionals provide important input into our investment banking and other business
selection processes. Our salespeople, traders, and other professionals may provide oral or written market
commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed
herein, and our proprietary trading and investing businesses may make investment decisions that are inconsistent
with the recommendations expressed herein.

Griffin Securities may from time to time perform corporate finance or other services for some companies described
herein and may occasionally possess material, nonpublic information regarding such companies. This information is
not used in preparation of the opinions and estimates herein. While the information contained in this report and the
opinions contained herein are based on sources believed to be reliable, Griffin Securities has not independently
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correctness of the information and opinions contained in this report.

The information contained herein is not a complete analysis of every material fact in respect to any company, industry
or security. This material should not be construed as an offer to sell or the solicitation of an offer to buy any security in
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DISCLOSURES FOR OTHER COMPANIES MENTIONED IN THIS REPORT: To obtain applicable current
disclosures in electronic format for the subject companies in this report, please refer to SEC Edgar filings at
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this report, see the ―Risk Factors‖ section in the SEC filings.

GRIFFIN SECURITIES EQUITY RESEARCH 29

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