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CorMedix: Let The Auction Begin!

It has been a busy week for CRMD as the stock surged on news that Evercore has been retained to sell the company. Neutrolin is likely a valuable asset given that it is already approved in the EU and is somewhat de-risked ramping into the US trial. NOLs and QIDP status add to the enterprise value. Cash should not be an issue in that warrants are deeply in the money and Elliot Management has also provided a generous backstop. $10-12 sale on the low end but likely much higher if EU legal proceedings progress. My guess remains a sale to Becton (NYSE:BDX)or Baxter (NYSE:BAX)since these behemoths could exploit the full breadth of the Neutrolin franchise. DaVita(NYSE:DVA) and Fresenius(NYSE:FMS) have deep reach in dialysis but are less likely buyers.

The other wild card here is a proposal winding thru the Hill that would allow QIDP blessed drug developers to sell off one year of exclusivity to a third party. Perhaps we will see a cash plus CVR deal to account for this potential upside.

Disclosure: The author is long CRMD, CRMD WTS.