Rockwell Medical, Inc. (Nasdaq: RMTI) (“Rockwell Medical” or the
“Company”), a biopharmaceutical company dedicated to transforming
the treatment of iron deficiency and anemia management and
improving outcomes for patients around the world, today reported
financial results and a business update for the three months ended
June 30, 2020.
“In the second quarter, we continued to make
important progress in the commercialization of Triferic Dialysate,
despite the challenges of the COVID-19 pandemic. We significantly
increased the number of clinics contracted to administer the
therapy, and we reached the highest number of contracted patients
on therapy and contracted annualized treatment volume since our
launch,” said Russell Ellison, M.D., M.Sc., President and Chief
Executive Officer of Rockwell Medical. “We continue to diligently
prepare for a successful launch of Triferic AVNU in the United
States later this year.”
“Importantly, we value the scientific
underpinning of our ferric pyrophosphate citrate technology and the
potential this represents in the treatment of iron deficiency and
anemia. Approximately 10 million people are iron deficient in the
United States, including 5 million who have iron deficiency anemia.
We are committed to prudent medical and scientific advancements,
and look forward to reviewing our programs for two therapeutic
indications that, we believe, represent new opportunities to extend
the innovative potential of our platform.”
Second Quarter 2020
Operational Highlights
Triferic Dialysate
- The Company signed contracts with 12 additional clinics during
the second quarter of 2020, an increase of 44% in contracted
clinics as compared to March 31, 2020. An additional eight clinics
affiliated with a Medium-Sized Dialysis Organization (MDO) were
trained and approved for adoption as of June 30, 2020.
Substantially all clinics contracted within Q2 2020 signed and
began purchasing in June 2020.
- There were nearly 2,800 contracted patients on therapy as of
June 30, 2020, representing more than 400,000 annualized
treatments. This compares to nearly 2,000 contracted patients and
over 300,000 annualized treatments as of March 31, 2020.
- The Company, as of June 30, 2020, has active or committed
Evaluation Programs with independent dialysis clinics and small and
medium dialysis chains representing nearly 1,500 patients and 26
clinics.
- Triferic net sales were $0.2 million in the second quarter of
2020.
- Additional clinics were enrolled in the Company’s Real World
Data program.
- The Company received regulatory approval for Triferic Dialysate
in Chile in June 2020.
- China’s National Medical Products Administration (NMPA)
approved the protocol for a clinical trial of Triferic Dialysate,
to be initiated by its licensee in China, Wanbang
Biopharmaceutical, Co., Ltd.
- With respect to the COVID-19 pandemic, the Company continues to
implement appropriate precautions to reduce the risk of possible
exposure by restricting employee travel, adopting new preventative
safety measures within its manufacturing facilities, instituting a
work-from-home policy for substantially all employees, excluding
its essential manufacturing and distribution employees, and
leveraging virtual technology for the sales force to use in its
communications with customers. The Company has experienced no
material impact on its supply chain to date and has experienced an
increase in demand for its dialysis concentrates products, believed
to be attributed to customers building safety stock and
international demand. Additionally, we have experienced an impact
in our sales and marketing efforts for Triferic Dialysate due to
the restrictions put in place because of COVID-19. This caused us
to change the way we interact with our current and potential
customers. We intend to initiate a sample evaluation program for
Triferic AVNU during the third quarter of 2020 in order to prepare
for a commercial launch. We will monitor the evaluation program in
relation to the COVID-19 pandemic through the balance of the
year.
Triferic AVNU (I.V.
Formulation)
- The Company filed a New Drug Submission (“NDS”) for Triferic
AVNU in Canada in May 2020. Health Canada accepted the NDS in June
2020. The Company currently expects regulatory approval in
mid-2021.
- The Company continues to execute its commercial strategy to
leverage the experience gained from the 2019 launch of Triferic
Dialysate and lay the groundwork for the commercial introduction of
Triferic AVNU. The Company currently expects to launch evaluation
programs during the third quarter of 2020 to allow clinics to gain
direct experience with Triferic AVNU, and expects Triferic AVNU to
be available commercially during the fourth quarter of 2020,
following the completion of the initial evaluation programs.
New Indications for FPC
- In the second quarter of 2020, and based upon analysis of
development considerations, economics, pricing, and regimen
ergonomics, the Company identified two new potential indications
for its Ferric Pyrophosphate Citrate (“FPC”) platform:
- FPC for the treatment of iron deficiency in patients requiring
home infusion therapy, which the Company considers its first
priority new indication to pursue; and
- FPC to improve cardiac function in hospitalized acute
congestive heart failure patients, which is under consideration by
the Company.
- The Company plans to host a Management and KOL update
conference call and webcast on Thursday, September 24, 2020, to
discuss further details of its plans to pursue new FPC indications.
The Company will provide additional details on accessing the
conference call and webcast in the near future.
Second Quarter 2020
Corporate Updates
- In June 2020, the Board of Directors appointed industry leader
and renowned authority on kidney disease, Allen R. Nissenson,
M.D., F.A.C.P., to serve as a director. Dr.
Nissenson serves as an Emeritus Professor of Medicine at
the David Geffen School of Medicine at University
California Los Angeles, Emeritus Chief Medical Officer
of DaVita Kidney Care, and a member of the board of directors
of Angion Biomedica Corp.
Second Quarter 2020 Selected Financial
Highlights
The following discussion and analysis should be
read in conjunction with our condensed consolidated financial
statements and related notes on Form 10-Q for the second quarter
ended June 30, 2020.
Net sales for the second quarter of 2020 were
$15.9 million, an increase of 7.1% compared to net sales of $14.8
million for the second quarter of 2019. The increase was primarily
due to an increased demand for our dialysis concentrates products.
Triferic net sales for the three months ended June 30, 2020 was
approximately $0.2 million. Triferic was launched in Q2 2019 via
the sample evaluation program and there were nominal revenues for
the same period in 2019.
Cost of sales for the second quarter of 2020 was
$15.0 million, resulting in gross profit of $0.9 million, compared
to cost of sales of $14.1 million and a gross profit of $0.7
million during the second quarter of 2019. Gross profits are
primarily related to our Dialysis concentrates products at this
time. The Company anticipates that potential future sales of
Triferic will impact the mix on our future gross profits.
Selling and marketing expenses were $2.0 million
for the second quarter of 2020 compared to $2.2 million for the
second quarter of 2019. The Company has invested in a specialty
commercial team and marketing programs to support the launch of
Triferic in Q2 of 2019 and the commercial introduction to Triferic
AVNU.
General and administrative expenses were $2.9
million for the second quarter of 2020 compared to $5.5 million for
the second quarter of 2019. The decrease of $2.6 million was
primarily due to a decrease in incentive compensation from
forfeited equity awards associated with the departure of our former
President and Chief Executive Officer in April 2020, a decrease in
legal expense relating to previous litigation that has since been
resolved; partially offset by severance pay relating to the same
former President and Chief Executive Officer.
Research and product development expenses were
$1.6 million for the second quarter of 2020 compared to $3.0
million for the second quarter of 2019. The decrease of $1.4
million was due primarily to the payment for the Triferic AVNU NDA
application fee of $1.3 million in Q2 2019. The Company is
continuing to invest in its medical and scientific programs to
support the global launch of Triferic and the advancement of our
ferric pyrophosphate citrate technology platform.
Net loss for the second quarter of 2020 was $6.9
million, or $0.10 per basic and diluted share, compared to a net
loss for first quarter of 2019 of $10.3 million, or $0.18 per basic
and diluted share.
Cash, cash equivalents, and investments
available-for-sale totaled $40.0 million as of June 30, 2020,
compared to $48.9 million on March 31, 2020. Working capital was
$40.0 million as of June 30, 2020 compared to $46.1 million as of
March 31, 2020. Additionally, the Company has a debt facility of
$35.0 million of which the first tranche of $22.5 million was
funded in March 2020 and is classified as long-term debt on the
balance sheet. The Company will be eligible to draw on a second and
third tranche of $5.0 million and $7.5 million,
respectively, upon achievement of certain milestones. Lastly, the
Company has an at-the-market equity offering facility of $40.0
million of which approximately $32.6 million remains available for
issuance under its at-the-market equity offering facility, pursuant
to which the Company may sell, at such times and amounts as it
deems appropriate, shares of common stock to support its business
plan, subject to certain restrictions on use.
As of June 30, 2020, there were 70,156,922
shares of common stock outstanding versus 69,049,102 shares
outstanding as of March 31, 2020.
Second Quarter 2020 and Business Update
Conference Call and Webcast
Rockwell Medical's management team will host a
conference call and audio webcast today at 4:30 p.m. ET to discuss
Q2 2020 financial results and provide a business update.
To access the conference call, please dial (877)
383-7438 (local) or (678) 894-3975 (international) at least 10
minutes prior to the start time and refer to conference ID 7990808.
A live webcast of the call will be available under "Events &
Presentations" in the Investor section of the Company's
website, https://ir.rockwellmed.com/. An archived webcast will
be available on the Company's website approximately two hours after
the event and will be available for 30 days.
About Rockwell Medical
Rockwell Medical is a biopharmaceutical company
dedicated to transforming iron deficiency and anemia management in
a wide variety of therapeutic areas and across the globe, improving
the lives of very sick patients. The Company’s initial focus is the
treatment of anemia in end-stage kidney disease (ESKD). Rockwell
Medical's exclusive renal drug therapies, Triferic (ferric
pyrophosphate citrate) Dialysate and Triferic AVNU, are the only
FDA-approved therapeutics indicated for iron replacement and
maintenance of hemoglobin in hemodialysis patients. Rockwell
Medical is also an established manufacturer, supplier and leader in
delivering high-quality hemodialysis concentrates/dialysates to
dialysis providers and distributors in the U.S. and abroad.
About Triferic Dialysate and Triferic AVNU
Triferic Dialysate and Triferic AVNU are the
only FDA-approved therapies in the U.S. indicated to replace iron
and maintain hemoglobin in hemodialysis patients during each
dialysis treatment. Triferic Dialysate and Triferic AVNU have a
unique and differentiated mechanism of action, which has the
potential to benefit patients and health care economics. Triferic
Dialysate and Triferic AVNU represent a potential innovative
medical advancement in hemodialysis patient iron management – with
the potential to become the future standard of care.
Triferic Dialysate and Triferic AVNU both
deliver approximately 5-7 mg iron with every hemodialysis treatment
to the bone marrow and maintain hemoglobin without increasing iron
stores (ferritin). Both formulations donate iron immediately and
completely to transferrin (carrier of iron in the body) upon entry
into the blood which is then transported directly to the bone
marrow to be incorporated into hemoglobin, with no increase in
ferritin (stored iron and inflammation) and no reports of
anaphylaxis in over 1,000,000 patient administrations, addressing a
significant medical need in overcoming Functional Iron Deficiency
(FID) in ESKD patients.
Important Safety Information
Serious hypersensitivity reactions, including
anaphylactic-type reactions, some of which have been
life-threatening and fatal, have been reported in patients
receiving parenteral iron products. Patients may present with
shock, clinically significant hypotension, loss of consciousness,
and/or collapse. Monitor patients for signs and symptoms of
hypersensitivity during and after hemodialysis until clinically
stable. Personnel and therapies should be immediately available for
the treatment of serious hypersensitivity reactions.
Hypersensitivity reactions have been reported in 1 (0.3%) of 292
patients receiving Triferic in two randomized clinical trials.
Iron status should be determined on pre-dialysis
blood samples. Post dialysis serum iron parameters may overestimate
serum iron and transferrin saturation.
The most common adverse reactions (≥3% and at
least 1% greater than placebo) in controlled clinical studies
include: procedural hypotension (21.6%), muscle spasms (9.6%),
headache (9.2%), pain in extremity (6.8%), peripheral edema (6.8%),
dyspnea (5.8%), back pain (4.5%), pyrexia (4.5%), urinary tract
infection (4.5%), asthenia (4.1%), fatigue (3.8%), arteriovenous
(AV) fistula thrombosis (3.4%), and AV fistula site hemorrhage
(3.4%).
Forward-Looking Statements
Certain statements in this press release may
constitute “forward-looking statements” within the meaning of the
federal securities laws, including, but not limited to, the impact
of COVID-19 on Rockwell Medical’s business and operations, the
commercialization of Triferic Dialysate, the launch of Triferic
AVNU, the selection of and plans for Rockwell Medical’s FPC
pipeline candidates, the initiation of a clinical trial in China,
the timeline for receipt of a target action date in Canada and the
Company’s expected research and development expenses. Words such
as, “may,” “might,” “will,” “should,” “believe,” “expect,”
“anticipate,” “estimate,” “continue,” “could,” “can,” “would,”
“develop,” “plan,” “potential,” “predict,” “forecast,” “project,”
“intend” or the negative of these terms, and similar expressions,
or statements regarding intent, belief, or current expectations,
are forward looking statements. While Rockwell Medical
believes these forward-looking statements are reasonable, undue
reliance should not be placed on any such forward-looking
statements, which are based on information available to us on the
date of this release. These forward-looking statements are based
upon current estimates and assumptions and are subject to various
risks and uncertainties (including, without limitation, those set
forth in Rockwell Medical’s SEC filings), many of which are beyond
our control and subject to change. Actual results could be
materially different. Risks and uncertainties include, but
are not limited to: the impact of the COVID-19 pandemic (including,
applicable federal state or local orders) on business and operating
results, including our supply chain, dialysis concentrates business
and the commercial launch of Triferic AVNU; the challenges inherent
in new product development and other indications and therapeutics
areas for our products; the success of our commercialization
strategy; the success and timing of our commercialization of
Triferic Dialysate; the success and timing of international
clinical trials for Triferic Dialysate; the success and
timing of our evaluation program for Triferic AVNU and our
commercial launch of Triferic AVNU in the United States; the
success and timing of the development of our FPB pipeline
candidates, the risk that topline clinical data and real world
results may not be predictive of future results; the anticipated
number of future clinics with which we may contract for use of
Triferic Dialysate; the expected number of annualized treatments
for Triferic Dialysate; anticipated research and development
expenses, expected financial performance, including cash flows,
revenues, growth, margins, funding, liquidity and capital
resources; and those risks more fully discussed in the “Risk
Factors” section of our Quarterly Report on Form 10-Q for the
period ended June 30, 2020 and of our Annual Report on Form 10-K
for the year ended December 31, 2019, as such description may be
amended or updated in any future reports we file with the SEC.
Rockwell Medical expressly disclaims any obligation to update our
forward-looking statements, except as may be required by law.
Triferic® is a registered trademark of Rockwell Medical,
Inc. Triferic AVNU is pending with the U.S. Patent and
Trademark Office. All other product names, logos, and
brands are property of their respective owners in the
United States and/or other countries. All company,
product and service names used on this website are for
identification purposes only. Use of these names, logos, and brands
does not imply endorsement.
Financial Tables Follow
ROCKWELL
MEDICAL, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
(Unaudited) |
|
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Cash and Cash Equivalents |
$ |
26,697,063 |
|
|
$ |
11,794,526 |
|
Investments
Available-for-Sale |
|
13,258,197 |
|
|
|
14,250,176 |
|
Accounts
Receivable, net |
|
3,565,292 |
|
|
|
4,202,725 |
|
Inventory,
net |
|
4,557,177 |
|
|
|
3,646,906 |
|
Prepaid and
Other Current Assets |
|
3,458,104 |
|
|
|
2,979,504 |
|
Total Current Assets |
|
51,535,833 |
|
|
|
36,873,837 |
|
Property and
Equipment, net |
|
2,306,462 |
|
|
|
2,433,405 |
|
Inventory,
Non-Current |
|
821,000 |
|
|
|
441,000 |
|
Right of Use
Assets, net |
|
2,440,115 |
|
|
|
3,212,530 |
|
Goodwill |
|
920,745 |
|
|
|
920,745 |
|
Other
Non-Current Assets |
|
560,588 |
|
|
|
434,935 |
|
Total Assets |
$ |
58,584,743 |
|
|
$ |
44,316,452 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Accounts
Payable |
$ |
3,313,240 |
|
|
$ |
3,018,424 |
|
Accrued
Liabilities |
|
4,437,080 |
|
|
|
4,517,732 |
|
Settlement
Payable |
|
- |
|
|
|
104,000 |
|
Lease
Liability - Current |
|
1,342,228 |
|
|
|
1,493,394 |
|
Deferred
License Revenue - Current |
|
2,174,626 |
|
|
|
2,233,640 |
|
Insurance
Financing Note Payable |
|
- |
|
|
|
763,422 |
|
Customer
Deposits |
|
38,273 |
|
|
|
55,100 |
|
Other
Current Liability - Related Party |
|
189,600 |
|
|
|
187,849 |
|
Total Current Liabilities |
|
11,495,047 |
|
|
|
12,373,561 |
|
|
|
|
|
Lease
Liability - Long-Term |
|
1,204,210 |
|
|
|
1,780,626 |
|
Term Loan,
Net of Issuance Costs |
|
20,764,213 |
|
|
|
- |
|
Deferred
License Revenue - Long-Term |
|
8,909,703 |
|
|
|
9,842,762 |
|
Total Liabilities |
|
42,373,173 |
|
|
|
23,996,949 |
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
Preferred
Stock, $0.0001 par value, 2,000,000 shares authorized; no shares
issued and outstanding at June 30, 2020 and December 31, 2019 |
|
- |
|
|
|
- |
|
Common
Stock, $0.0001 par value; 170,000,000 shares authorized; 70,156,922
and 65,378,890 shares issued and outstanding at June 30, 2020 and
December 31, 2019, respectively |
|
7,017 |
|
|
|
6,538 |
|
Additional
Paid-in Capital |
|
337,551,385 |
|
|
|
326,777,250 |
|
Accumulated
Deficit |
|
(321,392,548 |
) |
|
|
(306,516,265 |
) |
Accumulated
Other Comprehensive Income |
|
45,716 |
|
|
|
51,980 |
|
Total Stockholders’ Equity |
|
16,211,570 |
|
|
|
20,319,503 |
|
Total Liabilities and Stockholders’ Equity |
$ |
58,584,743 |
|
|
$ |
44,316,452 |
|
|
|
|
|
ROCKWELL MEDICAL, INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
|
Three Months Ended June 30, 2019 |
|
Six Months Ended June 30, 2020 |
|
Six Months Ended June 30, 2019 |
|
|
|
|
|
|
|
|
Net Sales |
$ |
15,895,971 |
|
|
$ |
14,845,788 |
|
|
$ |
31,752,510 |
|
|
$ |
30,405,227 |
|
Cost of Sales |
|
15,015,404 |
|
|
|
14,112,639 |
|
|
|
29,759,017 |
|
|
|
28,661,686 |
|
Gross Profit |
|
880,567 |
|
|
|
733,149 |
|
|
|
1,993,493 |
|
|
|
1,743,541 |
|
Selling and Marketing |
|
1,996,595 |
|
|
|
2,218,997 |
|
|
|
4,069,393 |
|
|
|
5,321,375 |
|
General and Administrative |
|
2,871,013 |
|
|
|
5,496,670 |
|
|
|
8,144,445 |
|
|
|
11,717,169 |
|
Settlement Expense |
|
- |
|
|
|
430,000 |
|
|
|
- |
|
|
|
430,000 |
|
Research and Product Development |
|
1,616,393 |
|
|
|
2,958,276 |
|
|
|
3,437,881 |
|
|
|
3,455,552 |
|
Operating Loss |
|
(5,603,434 |
) |
|
|
(10,370,794 |
) |
|
|
(13,658,226 |
) |
|
|
(19,180,555 |
) |
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
Realized Gain on Investments |
|
2,065 |
|
|
|
4,135 |
|
|
|
3,994 |
|
|
|
18,023 |
|
Warrant Modification Expense |
|
(837,322 |
) |
|
|
- |
|
|
|
(837,322 |
) |
|
|
- |
|
Interest Expense |
|
(520,604 |
) |
|
|
- |
|
|
|
(622,556 |
) |
|
|
- |
|
Interest Income |
|
66,750 |
|
|
|
74,476 |
|
|
|
237,827 |
|
|
|
192,002 |
|
Total Other Income |
|
(1,289,111 |
) |
|
|
78,611 |
|
|
|
(1,218,057 |
) |
|
|
210,025 |
|
|
|
|
|
|
|
|
|
Net Loss |
$ |
(6,892,545 |
) |
|
$ |
(10,292,183 |
) |
|
$ |
(14,876,283 |
) |
|
$ |
(18,970,530 |
) |
|
|
|
|
|
|
|
|
Basic and Diluted Net Loss per Share |
$ |
(0.10 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.33 |
) |
Basic and Diluted Weighted Average Shares
Outstanding |
|
69,428,574 |
|
|
|
58,216,066 |
|
|
|
68,473,407 |
|
|
|
57,660,947 |
|
|
|
|
|
|
|
|
|
CONTACTS
Investors:Argot
Partners212.600.1902Rockwell@argotpartners.com
Media:David RosenArgot
Partners212.600.1902david.rosen@argotpartners.com
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