Rockwell Medical, Inc. (NASDAQ:RMTI) (“Rockwell Medical” or the
"Company"), a biopharmaceutical company dedicated to improving
outcomes for patients with anemia, with an initial focus on
end-stage renal disease (ESRD) and chronic kidney disease (CKD),
today reported business updates and financial results for the three
and six months ended June 30, 2019.
Recent Business and Financial Highlights:
- Launched the initial product in the Triferic (ferric
pyrophosphate citrate) portfolio, Dialysate Triferic, on May 6,
2019 and recorded its first commercial sales. The Company’s goal
for 2019 is to drive adoption by providing medical education to
healthcare providers, while increasing awareness and understanding
of Triferic’s potential benefits.
- Submitted a New Drug Application (“NDA”) for I.V. Triferic in
the U.S. during the second quarter and received notice of
acceptance for filing from the U.S. Food and Drug Administration
(“FDA”) on August 2, 2019 with a PDUFA date of March 28, 2020.
- Announced positive results of two clinical pharmacology trials
of Triferic in China. Rockwell Medical and its partner in China
expect to request a meeting with the National Medical Products
Administration (“NMPA”) to review the results of these studies and
discuss whether these studies are sufficient to support a
submission for regulatory approval for Dialysate Triferic.
- Received a new J-Code from the Centers for Medicare and
Medicaid Services (“CMS”), effective July 1, 2019, for the powder
packet formulation of Dialysate Triferic.
- Intends to provide comments supporting eligibility of I.V.
Triferic for TDAPA in response to the recently announced CMS ESRD
Proposed Rule for 2020.
- Sales were $14.8 million and $30.4 million for the three and
six months ended June 30, 2019, a decrease of 0.5% and increase of
1.8% over the same periods last year, respectively. The Company’s
sales during the quarter and to date have substantially consisted
of sales of dialysis concentrate products to DaVita, Baxter and
international customers. The Company recently signed a new Products
Purchase Agreement with DaVita with an initial term through
December 31, 2023 and supplies approximately 25% of the U.S. market
for dialysis concentrates.
- Completed a public offering of common stock, with gross
proceeds of $18.8 million.
- As of June 30, 2019, the Company had cash, cash equivalents and
investments available-for-sale of $35.2 million. Additionally, the
Company has approximately $38 million remaining 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.
“During the second quarter, we accomplished two critical
milestones: commercializing Dialysate Triferic and submitting our
NDA for the I.V. Triferic formulation. We are pleased with the
progress we have made in a relatively short time. Through our
medical education, sales and marketing efforts, we have begun the
process of converting U.S. dialysis clinics to commercial use of
Dialysate Triferic, and we believe these efforts will support our
launch of I.V. Triferic next year, if approved by the FDA,” stated
Stuart Paul, President and Chief Executive Officer of Rockwell
Medical.
“Our recent financing strengthens our balance sheet and supports
our global commercialization and research and development efforts
around Triferic. And, while we are disappointed with CMS’s proposed
revisions as set forth in the ESRD Proposed Rule for 2020, we
remain confident about Triferic’s future and potential to change
the standard of care in anemia management for hemodialysis
patients,” continued Mr. Paul.
Second Quarter 2019 Financial Results
Net loss for the second quarter of 2019 was $10.3 million,
or $0.18 per basic and diluted share, compared to a net loss of
$12.2 million, or $0.24 per basic and diluted share, in the second
quarter of 2018. The reduction in net loss for the second quarter
of 2019 compared to the second quarter of 2018 was driven primarily
by an increase in gross profit and reduction in settlement expense,
net of reimbursement, partially offset by an increase in sales and
marketing expenses and research and product development expenses.
The net loss for the second quarter of 2019 included a $1.3 million
NDA application fee for I.V. Triferic and a $0.4 million accrual
for the settlement of shareholder class action litigation.
Net sales for the second quarter of 2019 were $14.8 million
compared to sales of $14.9 million during the second quarter of
2018.
Cost of sales for the second quarter of 2019 was $14.1 million,
resulting in gross profit of $0.7 million, compared to cost of
sales of $18.9 million and a gross loss of $4.0 million during the
second quarter of 2018. Gross profit increased in the second
quarter of 2019 compared to the second quarter of 2018 due
primarily to an inventory reserve expense of $0.2 million during
the second quarter of 2019 compared to an inventory reserve expense
of $5.4 million during the second quarter of 2018, partially offset
by a decrease in gross profit in our dialysis concentrates products
of $0.6 million. The decrease in gross profit for our dialysis
concentrates products was primarily attributable to increased
labor, materials and overhead costs.
Selling and marketing expenses were $2.2 million for the second
quarter of 2019 compared to $0.2 million in the second quarter of
2018. The increase was due primarily to marketing costs to support
the launch of Triferic and an increase in sales and marketing
headcount.
General and administrative expenses were $5.5 million during
each of the second quarter of 2019 and 2018, respectively.
Settlement expense, net of reimbursement, was $0.4 million in
the second quarter of 2019, compared to $1.0 million in the second
quarter of 2018. Settlement expense for the second quarter of 2018
reflected the terms of the confidential settlement agreement and
mutual release entered into with the Company’s former CEO, former
CFO and a former and then current director, while Settlement
expense for the second quarter of 2019 reflected an accrual for the
settlement of shareholder class action litigation.
Research and product development expenses were $3.0 million for
the second quarter of 2019 compared to $1.6 million for the second
quarter of 2018. The increase was due primarily to the $1.3 million
NDA application fee for I.V. Triferic, costs associated with new
clinical studies for Triferic, and an increase in headcount to
support the launch of Triferic, partially offset by the elimination
of Calcitriol development and the reduction in testing costs on
Triferic from the same period in 2018.
Other income, net, for the three months ended June 30, 2019 was
$0.1 million, consisting of interest income. Other income for the
three months ended June 30, 2018 was $0.1 million, consisting of
$0.2 million of interest income, offset by $0.1 million of realized
gains on investments.
The Company encourages shareholders to also review its Form 10-Q
for the quarter ended June 30, 2019, as filed by the Company with
the United States Securities and Exchange Commission ("SEC").
Key Objectives for 2019
- Drive adoption of Dialysate Triferic in the U.S. by raising
awareness in the dialysis community of its unique benefits.
- Gather and analyze real-world data to support medical education
and commercial efforts for Triferic.
- Interact with the FDA to support potential approval of I.V.
Triferic in March 2020 and begin preparation for potential launch
of I.V. Triferic.
- Use results from recently completed clinical pharmacology
studies in China to support future regulatory submission to NMPA
(formerly, the CFDA).
- Advance international opportunities for the Triferic portfolio
through strategic partnerships and licensing agreements.
- Expand and improve operating margin for the Company’s
concentrates business.
Conference Call
As previously announced, Rockwell Medical management will host
its second quarter 2019 conference call as follows:
Date |
Thursday, August 8, 2019 |
Time |
4:30 PM EDT |
Telephone
U.S: |
(877) 383-7438 |
|
|
|
International: |
(678) 894-3975 |
Webcast (live and
archive) |
https://edge.media-server.com/mmc/p/w4hd4fhc |
About Triferic Triferic is the only
FDA-approved therapy indicated to replace iron and maintain
hemoglobin in hemodialysis patients via dialysate during each
dialysis treatment. Triferic delivers approximately 5-7 mg iron
with every hemodialysis treatment to the bone marrow and maintains
hemoglobin without increasing iron stores (ferritin). Unlike
traditional IV iron products, Triferic donates iron immediately and
completely to transferrin (carrier of iron in the body) upon entry
into the blood and 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 ESRD
patients. The Company has developed multiple formulations of
Triferic: (1) FDA-approved Dialysate Triferic; and (2) I.V.
Triferic, for which the Company filed a New Drug Application in May
2019 with a PDUFA date of March 28, 2020. Please visit
www.triferic.com to view the Triferic mode-of-action (MOA) video
and for more information.
About Rockwell Medical Rockwell Medical is a
biopharmaceutical company dedicated to improving outcomes for
patients with anemia, with an initial focus on end-stage renal
disease (ESRD) and chronic kidney disease (CKD). Rockwell Medical's
exclusive renal drug therapy, Triferic, supports disease management
initiatives to improve the quality of life and care of dialysis
patients and is intended to deliver safe and effective therapy,
while decreasing drug administration costs and improving patient
convenience. The Company has developed multiple formulations of
Triferic: (1) Dialysate Triferic; and (2) I.V. Triferic. Dialysate
Triferic is the only FDA-approved therapeutic indicated for iron
replacement and maintenance of hemoglobin in hemodialysis patients.
The Company’s strategy is to bring its therapeutics to market in
the United States and to utilize partners to develop and
commercialize such therapeutics in international markets. 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. Please
visit www.rockwellmed.com for more information.
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, Rockwell Medical’s intention to bring to market
Triferic, and I.V. Triferic. Words such as "may," "might," "will,"
"should," "believe," "expect," "anticipate," "estimate,"
"continue," "could," "plan," "potential," "predict," "forecast,"
"project," "plan", "intend" or 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: statements about the issuance of a
unique J code for our Triferic Powder Packet; timing and regulatory
approval process for Dialysate Triferic in China; timing and
regulatory approval process of our NDA filing for I.V. Triferic as
filed with the FDA; the potential market opportunity and
commercialization of Dialysate Triferic in China; potential market
opportunity for I.V. Triferic, as well as other Rockwell Medical
products; pricing and reimbursement status for I.V. Triferic and
other Rockwell Medical products, including the eligibility of I.V.
Triferic for add-on reimbursement under TDAPA, pursuant to CMS’
preliminary proposed rules as announced by CMS on July 29, 2019;
liquidity and capital resources; expected duration of Rockwell
Medical's existing working capital; success of our recently
announced commercialization of Dialysate Triferic; and timing and
success of our efforts to maintain, grow and improve the profit
margin of the Company’s concentrate business. Rockwell Medical
expressly disclaims any obligation to update or alter any
statements whether as a result of new information, future events or
otherwise, except as required by law.
Triferic® is a registered trademark of Rockwell Medical,
Inc.
Contact Investor Relations: Lisa M. Wilson,
In-Site Communications, Inc. T: 212-452-2793 E:
lwilson@insitecony.com
Source: Rockwell Medical, Inc.
Financial Tables Follow
ROCKWELL MEDICAL, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2019 |
|
2018 |
|
|
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
21,417,159 |
|
|
$ |
22,713,980 |
|
Investments Available-for -Sale |
|
|
13,816,079 |
|
|
|
10,818,059 |
|
Accounts Receivable, net |
|
|
5,388,858 |
|
|
|
6,979,514 |
|
Insurance Receivable |
|
|
— |
|
|
|
371,217 |
|
Inventory |
|
|
3,972,637 |
|
|
|
4,038,778 |
|
Prepaid and Other Current Assets |
|
|
3,667,605 |
|
|
|
1,903,682 |
|
Total Current Assets |
|
|
48,262,338 |
|
|
|
46,825,230 |
|
Property and Equipment, net |
|
|
2,563,428 |
|
|
|
2,638,293 |
|
Inventory, Non-Current |
|
|
1,445,000 |
|
|
|
1,637,000 |
|
Right of Use Assets, net |
|
|
3,329,481 |
|
|
|
— |
|
Goodwill |
|
|
920,745 |
|
|
|
920,745 |
|
Other Non-current Assets |
|
|
555,222 |
|
|
|
536,516 |
|
Total Assets |
|
$ |
57,076,214 |
|
|
$ |
52,557,784 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Accounts Payable |
|
$ |
4,065,302 |
|
|
$ |
4,492,071 |
|
Accrued Liabilities |
|
|
4,071,341 |
|
|
|
5,129,761 |
|
Settlement Payable |
|
|
430,000 |
|
|
|
416,668 |
|
Lease Liability - Current |
|
|
1,637,481 |
|
|
|
— |
|
Deferred License Revenue - Current |
|
|
2,243,256 |
|
|
|
2,252,868 |
|
Insurance Financing Note Payable |
|
|
1,908,554 |
|
|
|
— |
|
Customer Deposits |
|
|
128,654 |
|
|
|
63,143 |
|
Other Current Liability - Related Party |
|
|
350,000 |
|
|
|
850,000 |
|
Total Current Liabilities |
|
|
14,834,588 |
|
|
|
13,204,511 |
|
|
|
|
|
|
|
|
Lease Liability - Long-Term |
|
|
1,690,310 |
|
|
|
— |
|
Deferred License Revenue - Long-Term |
|
|
10,959,577 |
|
|
|
12,076,399 |
|
Total Liabilities |
|
|
27,484,475 |
|
|
|
25,280,910 |
|
|
|
|
|
|
|
|
Shareholders’ Equity: |
|
|
|
|
|
|
Preferred Shares, no par value, no shares issued and outstanding at
June 30, 2019 and December 31, 2018 |
|
|
— |
|
|
|
— |
|
Common Shares, no par value, 63,398,704 and 57,034,154 shares
issued and outstanding at June 30, 2019 and December 31, 2018,
respectively |
|
|
320,882,946 |
|
|
|
299,601,960 |
|
Accumulated Deficit |
|
|
(291,358,764 |
) |
|
|
(272,388,234 |
) |
Accumulated Other Comprehensive Income |
|
|
67,557 |
|
|
|
63,148 |
|
Total Shareholders’
Equity |
|
|
29,591,739 |
|
|
|
27,276,874 |
|
Total Liabilities And Shareholders’ Equity |
|
$ |
57,076,214 |
|
|
$ |
52,557,784 |
|
|
|
|
|
|
|
|
ROCKWELL
MEDICAL, INC. AND SUBSIDIARIES |
Condensed
Consolidated Statements of Operations |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2019 |
|
Three Months Ended June 30, 2018 |
|
Six Months Ended June 30, 2019 |
|
Six Months Ended June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
14,845,788 |
|
|
$ |
14,913,363 |
|
|
$ |
30,405,227 |
|
|
$ |
29,861,943 |
|
|
Cost of Sales |
|
|
14,112,639 |
|
|
|
18,930,371 |
|
|
|
28,661,686 |
|
|
|
34,599,442 |
|
|
Gross Profit (Loss) |
|
|
733,149 |
|
|
|
(4,017,008 |
) |
|
|
1,743,541 |
|
|
|
(4,737,499 |
) |
|
Selling and Marketing |
|
|
2,218,997 |
|
|
|
164,374 |
|
|
|
5,321,375 |
|
|
|
379,457 |
|
|
General and Administrative |
|
|
5,496,670 |
|
|
|
5,526,575 |
|
|
|
11,717,169 |
|
|
|
8,643,449 |
|
|
Settlement Expense, net |
|
|
430,000 |
|
|
|
1,030,000 |
|
|
|
430,000 |
|
|
|
1,030,000 |
|
|
Research and Product Development |
|
|
2,958,276 |
|
|
|
1,558,946 |
|
|
|
3,455,552 |
|
|
|
3,225,302 |
|
|
Operating Loss |
|
|
(10,370,794 |
) |
|
|
(12,296,903 |
) |
|
|
(19,180,555 |
) |
|
|
(18,015,707 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized Gain (Loss) on Investments |
|
|
4,135 |
|
|
|
(122,095 |
) |
|
|
18,023 |
|
|
|
(124,987 |
) |
|
Interest Income |
|
|
74,476 |
|
|
|
188,206 |
|
|
|
192,002 |
|
|
|
360,381 |
|
|
Total Other Income |
|
|
78,611 |
|
|
|
66,111 |
|
|
|
210,025 |
|
|
|
235,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(10,292,183 |
) |
|
$ |
(12,230,792 |
) |
|
$ |
(18,970,530 |
) |
|
$ |
(17,780,313 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Net Loss per Share |
|
$ |
(0.18 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.35 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Weighted Average Shares
Outstanding |
|
|
58,216,066 |
|
|
|
51,288,424 |
|
|
|
57,660,947 |
|
|
|
51,288,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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