Rockwell Medical, Inc. (NASDAQ:RMTI) (“Rockwell Medical” or the
“Company”), a biopharmaceutical company dedicated to transforming
anemia management and improving outcomes for patients around the
world, today reported business highlights and financial results for
the three months and full year ended December 31, 2019.
“We are pleased with the steady progress we are making to drive
adoption of Dialysate Triferic as we strive to establish Triferic
as the standard of care for hemodialysis patients in the United
States. After two full quarters in market post-launch, our
three-month Evaluation Program for Dialysate Triferic, with a
consistent 75% conversion rate, continues to be a success and
represents validation for the clinical benefits that dialysis
centers see when they initiate Triferic therapy. In addition, with
our first signed contract with an MDO, and continued execution of
our sales, marketing and medical education initiatives, we expect
adoption rates to accelerate through 2020. In support of the
Triferic platform, we continue to invest in building our medical
capabilities and our real-world data program in an effort to
educate the clinical community about the unique properties of our
highly innovative therapy,” stated Stuart Paul, President and Chief
Executive Officer of Rockwell Medical.
Recent Business and Financial Highlights:
- Key highlights for the Dialysate Triferic U.S. market
introduction include:
- Entered into a contract with a Medium-Size Dialysis
Organization (MDO) for the purchase of Dialysate Triferic. Provides
access to up to 160 clinics for Dialysate Triferic, representing
more than 10,000 patients. Successfully initiated Dialysate
Triferic administration and purchasing in top five KOL-led clinics
within system.
- Signed contracts with 10 additional clinics during the fourth
quarter of 2019, an increase of 77% compared to the number of
clinics contracted at September 30, 2019.
- Contracted patients on therapy increased to 1,650 as of
December 31, 2019, representing an increase of 100,0000 annualized
treatments.
- 75% of clinics that completed an Evaluation Program during the
fourth quarter have converted to contracted customers and more than
80% of customers continue to order Dialysate Triferic on an ongoing
basis.
- Strengthened medical capabilities with the appointments of Marc
Hoffman, MD as Chief Medical Officer; Russell Ellison, MD, to the
Board of Directors; and three world-renowned nephrologists to
Medical Advisory Board: Stephen Fishbane, MD; Jay Wish, MD; and
Anatole Besarab, MD.
- Entered into exclusive license and supply agreements with Sun
Pharma for the rights to commercialize Triferic in India. Rockwell
Medical will receive an upfront fee and will be eligible for
milestone payments and royalties on net sales.
- The Company has a PDUFA date of March 28, 2020 for I.V.
Triferic, which was developed pursuant to a Special Protocol
Assessment (SPA) with the FDA. If approved, I.V. Triferic would
allow dialysis centers to administer Triferic to patients
regardless of the mode of bicarbonate delivery being used.
- Sales were $15.5 million and $61.3 million for the three and
twelve months ended December 31, 2019, respectively, including
sales of Triferic of approximately $0.2 million and $0.5 million,
respectively.
- The Company completed the pricing of an underwritten public
offering of the Company’s common stock in February 2020 for gross
proceeds of approximately $8.1 million, before deducting
underwriting discounts; and
- Cash flow used in operations for the three months ended
December 31, 2019 was $5.3 million. As of December 31, 2019, the
Company had approximately $26.0 million of cash, cash equivalents
and investments available-for-sale. Additionally, the Company has
approximately $35 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.
“2019 was a pivotal year for Rockwell Medical. With the
commercial launch of Dialysate Triferic, and the NDA submission for
the I.V. formulation, we achieved important milestones and
established a strong foundation for future growth and expansion. We
are very pleased that we are gaining traction in bringing this
much-needed therapeutic to hemodialysis patients both in the U.S.
and around the world. Our experience thus far informs our
belief that Triferic has the potential to improve the way anemia is
managed in a variety of disease states, and we are actively focused
on identifying and prioritizing other therapeutic indications for
future development,” concluded Mr. Paul.
Fourth Quarter 2019 Financial Results
Net loss for the fourth quarter of 2019 was $7.3 million, or
($0.11) per basic and diluted share, compared to a net loss of $9.4
million, or ($0.17) per basic and diluted share, in the fourth
quarter of 2018. The decrease in net loss for the fourth quarter of
2019 compared to the fourth quarter of 2018 primarily reflects a
reduction in general and administrative expenses and research and
development expenses for licenses acquired, partially offset by an
increase in research and development expenses to support the
Company’s investments in its medical platform.
Net sales for the fourth quarter of 2019 were $15.5 million
compared to sales of $16.9 million for the fourth quarter of 2018.
Net sales of hemodialysis concentrates to dialysis providers and
distributors in the U.S. and abroad were $15.3 million for the
three months ended December 31, 2019 compared to $16.8 million for
the three months ended December 31, 2018. The decrease in net sales
was due to a decrease in international concentrates sales of $1.1
million, a decrease of $0.7 million in concentrates sales to Baxter
related to true-ups for cost of sales and transportation cost
pass-throughs, partially offset by increased sales to DaVita, Inc.
of $0.3 million and Triferic sales of $0.2 million.
Cost of sales during the fourth quarter of 2019 was $14.4
million compared to cost of sales of $15.7 million during the
fourth quarter of 2018. The decrease was due primarily to a
decrease in distribution costs due to reduced rates for third party
shipping and reduced costs for materials and overhead tied to the
reduction in concentrates sales volume.
Gross profit for the fourth quarter of 2019 was approximately
$1.1 million compared to gross profit of $1.2 million for the
fourth quarter of 2018. The decrease in gross profit was primarily
due to a reduction in concentrates sales compared to the fourth
quarter of 2018, partially offset by an increase in Triferic
sales.
Selling and marketing expenses were $1.9 million during the
three months ended December 31, 2019 compared with $0.3 million
during the three months ended December 31, 2018. The increase
of $1.6 million was due to investments the Company has made to
develop a commercial platform to support the launch of
Triferic.
General and administrative expenses were $4.7 million during the
three months ended December 31, 2019 compared with $7.6 million
during the three months ended December 31, 2018. The decrease of
$2.9 million was primarily driven by reductions in compensation,
legal, consulting, and recruiting expenses, partially offset by an
increase in insurance and facility-related expenses.
Research and product development expenses were $2.0 million for
the three months ended December 31, 2019 compared with $1.6 million
during the three months ended December 31, 2018. The increase was
due primarily to an increase in clinical trial and consulting
expenses, partially offset by a reduction due to the write off of
Calcitriol inventory that occurred in the fourth quarter of 2018.
The Company expects its research and product development expenses
to increase in the future due to additional clinical development of
Dialysate and I.V. Triferic, including the pediatric clinical trial
for Triferic, expenses associated with real-world data collection
and analysis for Triferic, an increase in headcount to support
medical education efforts for Triferic and potential investments in
developing Triferic for new clinical indications.
Research and development for licenses acquired from a related
party were nil for the three months ended December 31, 2019
compared to $1.1 million for the three months ended December 31,
2018.
Other income for the three months ended December 31, 2019 was
$0.1 million, consisting primarily of interest income. Other income
for the three months ended December 31, 2018 was approximately
$49,000, consisting primarily of interest income.
Full Year 2019
For the year ended December 31, 2019, net sales were $61.3
million compared to $63.4 million for the year ended December 31,
2018. The decrease was primarily due to lower international
concentrates sales compared to the year ended December 31, 2018,
partially offset by an increase in Triferic net sales and sales of
concentrates pursuant to the Company’s contract with DaVita
Inc.
Cost of sales for the year ended December 31, 2019 was $58.5
million, resulting in a gross profit of $2.8 million in 2019,
compared to cost of sales of $65.0 million and a gross loss of $1.6
million in 2018. Gross profit increased in 2019 compared to 2018,
due primarily to non-cash charges taken for inventory reserves for
Triferic during the year ended December 31, 2018, partially offset
by a gross profit decrease in dialysis concentrates products during
2019.
Selling and marketing expenses were $9.1 million during the year
ended December 31, 2019 compared with $1.0 million during the year
ended December 31, 2018. The increase of $8.1 million was due to
investments the Company is making in developing a commercial
platform to support the launch of Triferic.
General and administrative expenses were $21.0 million for the
year ended December 31, 2019 compared to $22.1 million for the year
ended December 31, 2018. The decrease was primarily driven by a
reduction in legal and related costs associated with various
matters, including litigation activities, related to the departure
of certain executives and directors during 2018, partially offset
by an increase in insurance, stock-based compensation and
facility-related expenses.
Settlement expenses were $0.4 million for the year ended
December 31, 2019 compared to $1.0 million for the year ended
December 31, 2018.
Research and product development expenses were $6.9 million for
the year ended December 31, 2019 compared to $5.6 million for the
year ended December 31, 2018. The increase was due to the Company’s
commitment to investing in and building its medical capabilities,
including generating data from studies and real-world use of
Triferic to support medical education and development efforts for
Triferic, as well as the expansion of the Company’s internal
medical affairs staff.
Research and development for licenses acquired from a related
party were nil for the year ended December 31, 2019 compared to
$1.1 million for the year ended December 31, 2018.
Net loss for the year ended December 31, 2019 was $34.1
million, or ($0.56) per basic and diluted share, compared to a net
loss of $32.1 million, or ($0.61) per basic and diluted
share, in 2018.
The Company encourages shareholders to also
review its Form 10-K for the year ended December 31, 2019, as filed
by the Company with the United States Securities and Exchange
Commission (“SEC”).
Conference Call
As previously announced, Rockwell Medical management will host
its fourth quarter 2019 conference call as follows:
Date: |
Thursday, March 12, 2020 |
Time: |
4:30 PM ET |
Telephone |
U.S: |
(877) 383-7438 |
|
International: |
(678) 894-3975 |
Webcast (live and
archive): |
https://edge.media-server.com/mmc/p/jmkgdrca |
About Rockwell Medical
Rockwell Medical is a biopharmaceutical company dedicated to
transforming 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 renal disease (ESRD). Rockwell Medical's exclusive renal
drug therapy, Triferic (ferric pyrophosphate citrate), is the only
FDA-approved therapeutic indicated for iron replacement and
maintenance of hemoglobin in hemodialysis 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. 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
Triferic is the only FDA-approved therapy in the U.S. indicated
to replace iron and maintain hemoglobin in hemodialysis patients
via dialysate during each dialysis treatment. Triferic has a unique
and differentiated mechanism of action which has the potential to
benefit patients and health care economics. Triferic represents a
potential innovative medical advancement in hemodialysis patient
iron management– with the potential to become the future standard
of care.
Triferic delivers approximately 5-7 mg iron with every
hemodialysis treatment to the bone marrow and maintains hemoglobin
without increasing iron stores (ferritin). 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.
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, Rockwell Medical’s
expectations regarding the consummation of the offering, the terms
of the offering, and the satisfaction of customary closing
conditions with respect to the offering and the anticipated use of
the net proceeds of the offering. Words such as “may,” “might,”
“will,” “should,” “believe,” “expect,” “anticipate,” “estimate,”
“continue,” “could,” “plan,” “potential,” “predict,” “forecast,”
“project,” “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; the potential market opportunity and
commercialization of Dialysate Triferic in China upon regulatory
approval; the timing and regulatory approval process for our NDA
filing for I.V. Triferic as filed with the FDA: the potential
market opportunity for I.V. Triferic, as well as other Rockwell
Medical products; CMS’ announced final rule relating to the
eligibility criteria for TDAPA; liquidity and capital resources;
expected duration of Rockwell Medical’s existing working capital;
the success of our commercialization of Dialysate Triferic, which
commenced in May 2019; and the timing and success of our efforts to
maintain, grow and improve the profit margin of the Company’s
concentrate business; and the impact of general economic,
health, industrial or political conditions in the United States or
internationally, as well as those risks more fully discussed in
Rockwell Medical’s SEC filings. Accordingly, you should not place
undue reliance on these forward-looking statements. 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(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
11,794,526 |
|
|
$ |
22,713,980 |
|
Investments Available-for -Sale |
|
|
14,250,176 |
|
|
|
10,818,059 |
|
Accounts Receivable, net of a reserve of $8,932 in 2019 and $2,104
in 2018 |
|
|
4,202,725 |
|
|
|
6,979,514 |
|
Insurance Receivable |
|
|
— |
|
|
|
371,217 |
|
Inventory |
|
|
3,646,906 |
|
|
|
4,038,778 |
|
Prepaid and Other Current Assets |
|
|
2,979,504 |
|
|
|
1,903,682 |
|
Total Current Assets |
|
|
36,873,837 |
|
|
|
46,825,230 |
|
Property and Equipment, net |
|
|
2,433,405 |
|
|
|
2,638,293 |
|
Inventory, Non-Current |
|
|
441,000 |
|
|
|
1,637,000 |
|
Right of Use Assets, net |
|
|
3,212,530 |
|
|
|
|
Goodwill |
|
|
920,745 |
|
|
|
920,745 |
|
Other Non-current Assets |
|
|
434,935 |
|
|
|
536,516 |
|
Total Assets |
|
$ |
44,316,452 |
|
|
$ |
52,557,784 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Accounts Payable |
|
$ |
3,018,424 |
|
|
$ |
4,492,071 |
|
Accrued Liabilities |
|
|
4,517,732 |
|
|
|
5,129,761 |
|
Settlement Payable |
|
|
104,000 |
|
|
|
416,668 |
|
Lease Liability - Current |
|
|
1,493,394 |
|
|
|
— |
|
Deferred License Revenue |
|
|
2,233,640 |
|
|
|
2,252,868 |
|
Insurance Financing Note Payable |
|
|
763,422 |
|
|
|
— |
|
Customer Deposits |
|
|
55,100 |
|
|
|
63,143 |
|
Other Current Liability - Related Party |
|
|
187,849 |
|
|
|
850,000 |
|
Total Current Liabilities |
|
|
12,373,561 |
|
|
|
13,204,511 |
|
|
|
|
|
|
|
|
Lease Liability - Long Term |
|
|
1,780,626 |
|
|
|
|
Deferred License Revenue |
|
|
9,842,762 |
|
|
|
12,076,399 |
|
Total Liabilities |
|
|
23,996,949 |
|
|
|
25,280,910 |
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
Preferred Shares, $0.0001 par value, 2,000,000 shares authorized,
no shares issued and outstanding at December 31, 2019 and 2018 |
|
|
— |
|
|
|
— |
|
Common Stock, $0.0001 par value, 65,378,890 and 57,034,154 shares
issued and outstanding at December 31,2019 and 2018,
respectively |
|
|
6,538 |
|
|
|
5,703 |
|
Additional Paid-in Capital |
|
|
326,777,250 |
|
|
|
299,596,257 |
|
Accumulated Deficit |
|
|
(306,516,265 |
) |
|
|
(272,388,234 |
) |
Accumulated Other Comprehensive Income |
|
|
51,980 |
|
|
|
63,148 |
|
Total Stockholders’ Equity |
|
|
20,319,503 |
|
|
|
27,276,874 |
|
Total Liabilities And Stockholders’ Equity |
|
$ |
44,316,452 |
|
|
$ |
52,557,784 |
|
|
|
|
|
|
|
|
|
|
ROCKWELL MEDICAL, INC. AND
SUBSIDIARIES Condensed Consolidated
Statements of
Operations (unaudited)
|
|
|
|
|
|
|
|
Three Months EndedDecember 31, 2019 |
|
Three Months EndedDecember 31, 2018 |
|
Year EndedDecember 31, 2019 |
|
Year EndedDecember 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
$ |
15,490,325 |
|
|
$ |
16,854,259 |
|
|
$ |
61,302,801 |
|
|
$ |
63,388,617 |
|
Cost of Sales |
|
|
14,378,560 |
|
|
|
15,670,109 |
|
|
|
58,463,859 |
|
|
|
64,973,157 |
|
Gross Profit (Loss) |
|
|
1,111,765 |
|
|
|
1,184,150 |
|
|
|
2,838,942 |
|
|
|
(1,584,540 |
) |
Selling and Marketing |
|
|
1,901,185 |
|
|
|
288,170 |
|
|
|
9,050,033 |
|
|
|
1,004,584 |
|
General and Administrative |
|
|
4,657,277 |
|
|
|
7,612,086 |
|
|
|
20,997,948 |
|
|
|
22,077,720 |
|
Settlement Expense, net of Reimbursement |
|
|
— |
|
|
|
— |
|
|
|
430,000 |
|
|
|
1,030,000 |
|
Research and Product Development |
|
|
1,955,964 |
|
|
|
1,608,823 |
|
|
|
6,886,251 |
|
|
|
5,642,317 |
|
Research and Development - Licenses Acquired (Related Party) |
|
|
— |
|
|
|
1,100,000 |
|
|
|
— |
|
|
|
1,100,000 |
|
Operating Loss |
|
|
(7,402,661 |
) |
|
|
(9,424,929 |
) |
|
|
(34,525,290 |
) |
|
|
(32,439,161 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
Realized Gain (Loss) on Investments |
|
|
5,890 |
|
|
|
(325 |
) |
|
|
30,182 |
|
|
|
(222,338 |
) |
Interest Income |
|
|
94,341 |
|
|
|
48,932 |
|
|
|
367,077 |
|
|
|
535,328 |
|
Other Expense |
|
|
— |
|
|
|
410 |
|
|
|
— |
|
|
|
313 |
|
Foreign Currency Gain |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Total Other Income |
|
|
100,231 |
|
|
|
49,017 |
|
|
|
397,259 |
|
|
|
313,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(7,302,430 |
) |
|
$ |
(9,375,912 |
) |
|
$ |
(34,128,031 |
) |
|
$ |
(32,125,858 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Net Loss per Share |
|
$ |
(0.11 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.56 |
) |
|
$ |
(0.61 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Weighted Average Shares
Outstanding |
|
|
64,450,030 |
|
|
|
56,041,350 |
|
|
|
60,918,544 |
|
|
|
52,824,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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