aibioCorMedix faces DefenCath securities class action as derivative settlement heads to a hearing
Tickers CRMD
The class action names CorMedix and six officers, including Khoso Baluch. A settlement of derivative suits naming 12 individuals had a final approval hearing set for September 23, 2026.
Key facts
- Company
- CorMedix Inc. (NASDAQ: CRMD)
- News type
- Legal
- Primary source
- CorMedix 10-Q for the quarter ended June 30, 2026 (SEC EDGAR)
CorMedix Inc. (Nasdaq: CRMD) said in its 10-Q filed August 13, 2026 that a securities class action over its drug DefenCath is in discovery in federal court in New Jersey. A settlement of the related shareholder derivative claims won preliminary approval on July 24, 2026. The class action is In re CorMedix Inc. Securities Litigation, Case No. 2:21-cv-14020-JXN-CLW, in the U.S. District Court for the District of New Jersey. It combines two putative class actions filed on or about July 22, 2021 and September 13, 2021, consolidated on October 13, 2021.
The third amended complaint names CorMedix and six current and former officers: Khoso Baluch, Robert Cook, Matthew David, Phoebe Mounts, John L. Armstrong and Joseph Todisco. The derivative suits name 12 individuals by our count, listed below, with CorMedix as a nominal defendant. The claims described here are allegations.
The case
The lead plaintiff, a purported stockholder, seeks to represent buyers of CorMedix securities between October 16, 2019 and August 8, 2022, inclusive. The complaint alleges that CorMedix violated Section 10(b) of the Exchange Act and Rule 10b-5, and that the officers violated Section 20(a). The stated bases are allegedly false and misleading statements and omissions about the NDA submissions to the FDA for DefenCath, the complete response letters that followed, and FDA communications directed at CorMedix's contract manufacturer and heparin supplier.
The derivative complaint filed November 10, 2025 covers the same period. It alleges that the individual defendants made or caused misleading statements about manufacturing deficiencies that they knew or should have known would affect FDA approval of DefenCath. It asserts breach of fiduciary duty and unjust enrichment.
Defendants
In the class action, the defendants are CorMedix and the six officers named above. The 10-Q calls them the Officer Defendants and gives no titles. It says one has died, and the court allowed an amended complaint on December 17, 2025 in response.
In the derivative suits, the 10-Q names these individuals across five cases: Khoso Baluch, Janet Dillione, Alan W. Dunton, Myron Kaplan, Steven Lefkowitz, Paulo F. Costa, Greg Duncan, Matthew David, Phoebe Mounts, Joseph Todisco, Robert Cook and John L. Armstrong. Voter v. Baluch (Case No. 2:21-cv-18493-JXN-LDW) was filed on or about October 13, 2021. DeSalvo v. Costa (No. 2:23-cv-00150-JXN-CLW) and Scullion v. Baluch (No. 2:23-cv-00406-ES-ESK) followed in January 2023, and the court consolidated the three on April 18, 2023. Raval v. Baluch (Case No. UNN-L-003721-25) was filed in the Law Division of the Union County Superior Court of New Jersey on or about September 26, 2025. Jhoe v. Todisco, C.A. No. 2025-1367-PAF, began under seal on November 24, 2025 in the Delaware Court of Chancery and names all twelve.
Where it stands
In the class action, the court denied the motion to dismiss in a revised opinion on August 19, 2025. Fact discovery is scheduled to end September 25, 2026. Expert reports are due November 11, 2026 and January 15, 2027. On June 25, 2026 the court granted a request to seek evidence in Spain from Laboratorios Farmacéuticos ROVI, S.A. and Barragan BioConsulting, SL.
On the derivative side, the parties signed a binding term sheet on December 20, 2025 and a stipulation of settlement on January 19, 2026. On July 24, 2026 the federal court granted preliminary approval and set a settlement hearing for September 23, 2026. Plaintiffs' counsel may seek attorney's fees of up to $3.9 million, which CorMedix expects its insurance policy to cover entirely. Raval will be dismissed if the court grants final approval. In Jhoe, the stay has expired and the parties are to confer. We found no later CorMedix filing that reports the outcome of the September 23 hearing.
Why it matters to shareholders
In the second quarter CorMedix booked $4.2 million of loss recovery credits in general and administrative expense from expected insurance proceeds covering qualified legal fees for the securities litigation. The company concluded that no loss contingency was probable and reasonably estimable enough to require a liability. The 10-Q gives no loss estimate for the class action.