Rockwell Medical, Inc. (NASDAQ:RMTI) (the "Company"), a
biopharmaceutical company targeting end-stage renal disease (ESRD)
and chronic kidney disease (CKD), today reported financial results
for the three months and full year ended December 31, 2018.
Recent Business Updates:
- Launch of Dialysate Triferic – The Company has
developed a long-term, strategic plan for the Triferic portfolio.
As part of this plan, the Company expects to launch Dialysate
Triferic in the U.S. during the second quarter of 2019.
- I.V. Triferic Update – The Company expects to
file a New Drug Application (“NDA”) for I.V. Triferic during the
second quarter of 2019. I.V. Triferic was developed pursuant to a
Special Protocol Assessment with the U.S. Food and Drug
Administration (“FDA”) through which an equivalence approach to
Dialysate Triferic was deemed acceptable by the FDA. Data from a
previously completed equivalence study will be presented at the
39th Annual Dialysis Conference on March 18, 2019.
- International Triferic Updates – In January
2019, the Company received the first international approval for
Dialysate Triferic in Peru, and expects to receive regulatory
approval for Dialysate Triferic in Chile in 2019. The Company plans
to file for regulatory approval for Dialysate Triferic in China,
and I.V. Triferic in Canada during 2019, pending completion of any
required clinical trials and discussions with local regulators. The
Company is actively pursuing international licensing opportunities
with a primary focus on Europe and Japan.
- Strengthened Management Team – During the
fourth quarter of 2018, the Company added seasoned executives with
extensive experience in pharmaceuticals and the renal sector to
manage a strategic worldwide business plan to develop and
commercialize the Triferic portfolio.
Selected Financial Highlights for the Three and Twelve
Months ended December 31, 2018:
- Sales for the fourth quarter of 2018 were $16.9 million
compared to $14.8 million for the fourth quarter of 2017, an
increase of 14%; for the full year 2018, sales were $63.4 million
compared to $57.3 million for 2017, an increase of 11%.
- Net loss for the fourth quarter of 2018 was $9.4 million
compared to a net loss of $9.0 million for the fourth quarter of
2017.
- Cash used in operating activities for the fourth quarter of
2018 was $5.8 million. As of December 31, 2018, the Company had
cash, cash equivalents and investments available-for-sale of $33.5
million and working capital of $33.6 million.
“In a short time, we have made significant progress in
developing a focused, disciplined strategy for the launch of
Dialysate Triferic in the U.S. and the filing of our NDA for I.V.
Triferic. We see a tremendous global opportunity for Triferic to
deliver a much-needed alternative to the more than two million
patients worldwide who receive in-center hemodialysis treatments
each year,” stated Stuart Paul, President and Chief Executive
Officer of Rockwell Medical.
“As the first and only FDA-approved therapy to replace iron and
maintain hemoglobin levels, Triferic has the potential to change,
over time, the standard of care in anemia management in
hemodialysis patients. With a compelling clinical profile and the
recent additions to the management team, we are well-positioned to
bring our innovative formulations of Triferic to market,” concluded
Mr. Paul.
Fourth Quarter 2018 Financial Results
Sales for the fourth quarter of 2018 were $16.9 million compared
to sales of $14.8 million for the fourth quarter of 2017. The
increase was due primarily to higher international sales, an
increase in revenue from distribution and management fees billed to
Baxter, and increased sales to Baxter and DaVita. Revenue
recognized from licensing fees was $0.7 million for both the fourth
quarters of 2018 and 2017, respectively.
Cost of sales for the fourth quarter of 2018 was $15.7 million,
resulting in a gross profit of $1.2 million in the fourth quarter
of 2018, compared to a gross loss of $1.2 million in the fourth
quarter of 2017. The year-over-year change in gross profit was
positively impacted by a decrease in inventory reserves and higher
sales volumes, partially offset by higher distribution costs and
higher variable costs due to the increase in sales volume. Gross
profit for the Company’s concentrates business for each of the
three months ended December 31, 2018 and December 31, 2017 was $1.6
million.
Selling, general and administrative expenses were $7.9 million
for the fourth quarter of 2018 compared with $5.9 million for the
fourth quarter of 2017. The $2.0 million increase was
primarily due to increases in stock-based compensation, higher
consulting expenses, recruiting fees, bonus and insurance expenses,
offset by lower legal and annual reporting expenses.
Research and product development expenses were $1.6 million for
the fourth quarter of 2018 compared to $2.1 million for the fourth
quarter of 2017. The $0.5 million decrease in the fourth quarter of
2018 was largely related to lower clinical trial and product
testing expenses for Triferic, partially offset by higher labor
costs. Research and product development expenses for the fourth
quarter of 2018 also included a $0.7 million inventory write-down
for Calcitriol.
Research and development – licenses acquired (related party) was
$1.1 million for the fourth quarter of 2018 compared to nil for the
fourth quarter of 2017. The increase was related to the Master
Services and Intellectual Property Agreement entered into with
Charak, LLC and Dr. Ajay Gupta in October 2018.
Net loss for the fourth quarter of 2018 was $9.4 million,
or $0.17 per basic and diluted share, compared to a net loss
of $9.0 million, or $0.18 per basic and diluted share, in
2017.
Full Year 2018
For the year ended December 31, 2018, sales were $63.4 million
compared to $57.3 million for the year ended December 31, 2017. The
increase of $6.1 million was primarily due to higher international
sales of $2.1 million, or a 31% increase, compared to the year
ended December 31, 2017, as well as increased revenue from
distribution and management fees billed to Baxter. Revenue
recognized from licensing fees was $2.4 million and $2.3 million
for the years ended December 31, 2018 and 2017, respectively.
Cost of sales for the year ended December 31, 2018 was $65.0
million, resulting in a gross loss of $1.6 million in 2018,
compared to a gross profit of $3.7 million in 2017. Gross profit
declined by $5.3 million in 2018 compared to 2017, due primarily to
an increase in inventory reserves and write-offs of Triferic
inventory of $4.6 million and a gross profit decrease of $0.6
million in the Company’s dialysis concentrates products. The
decrease in gross profit for the Company’s dialysis concentrates
products was primarily attributable to increased distribution costs
and lower pricing under the Company’s distribution agreement with
Baxter, partially offset by increased unit volume growth.
Selling, general and administrative expenses were $23.1 million
for the year ended December 31, 2018 compared to $23.3 million for
the year ended December 31, 2017. The decrease is due to reduced
salaries and stock compensation offset by increases in legal,
insurance and outside consulting expenses.
Settlement expenses were $1.0 million for the year ended
December 31, 2018 compared to nil for the year ended December 31,
2017. The increase was related to the settlement agreement with the
Company’s former CEO, former CFO and certain former directors in
August 2018.
Research and product development expenses were $5.6 million for
the year ended December 31, 2018 compared to $6.3 million for the
year ended December 31, 2017. The decrease was largely related to
lower Triferic development costs.
Research and development – licenses acquired (related party) was
$1.1 million for the year ended December 31, 2018 compared to nil
for the year ended December 31, 2017. The increase was related to
the Master Services and Intellectual Property Agreement entered
into with Charak, LLC and Dr. Ajay Gupta in October 2018.
Net loss for the year end December 31, 2018 was $32.1
million, or $0.61 per basic and diluted share, compared to a net
loss of $25.9 million, or $0.51 per basic and diluted
share, in 2017.
Decision on Calcitriol (Active Vitamin D)
Injection
Following a strategic review of Calcitriol, including pricing,
commercial distribution and marketing, manufacturing efficiencies
and capacity (including potential capital investment), the Company
determined commercialization of Calcitriol in the U.S. is not
viable at this time. The decision is based, in part, on the fact
that prevailing market prices for similar Vitamin D products are
lower than the cost to produce Calcitriol on a dose-equivalent
basis, and as a result it would be difficult for the Company to
market Calcitriol profitably. As a result of this decision, the
Company recorded an inventory reserve of $0.7 million for the
fourth quarter of 2018, reflecting the remainder of its Calcitriol
inventory. The Company is continuing to evaluate the potential
commercialization of Calcitriol in China with its partner, Wanbang
Biopharmaceutical, including the market opportunity and regulatory
pathway.
Key Objectives for 2019
- Launch Dialysate Triferic in the U.S. in the second quarter of
2019;
- File an NDA with the FDA for I.V. Triferic in the second
quarter of 2019;
- Accelerate global development of Triferic through existing
partners and identify new partners for key geographies, including
Europe and Japan; and
- Grow and improve the profitability of the Company’s
concentrates business.
Conference Call
As previously announced, Rockwell Medical management will host
its fourth quarter and full year 2018 conference call as
follows:
Date |
Thursday, March 14,
2019 |
Time |
8:30 AM EDT |
Telephone U.S: |
|
(877) 383-7438 |
International: |
(678) 894-3975 |
Webcast
(live and archive) |
https://edge.media-server.com/m6/p/hbjxp3dz |
About Rockwell Medical, Inc. Rockwell Medical
is a biopharmaceutical company targeting end-stage renal disease
(ESRD) and chronic kidney disease (CKD). Rockwell Medical's
exclusive renal drug therapies support disease management
initiatives to improve the quality of life and care of dialysis
patients and are intended to deliver safe and effective therapy,
while decreasing drug administration costs and improving patient
convenience. Rockwell Medical's anemia drug Triferic is the only
FDA-approved product 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 (used to maintain
human life by removing toxins and replacing critical nutrients in
the dialysis patient's bloodstream) to dialysis providers and
distributors in the U.S. and abroad. Please visit
www.rockwellmed.com for more information.
Forward-Looking Statement 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's intention to bring to market Triferic,
IV Triferic and Calcitriol. 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 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'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 timing and success of
our planned NDA submission for IV Triferic; the potential market
opportunity for IV Triferic and other Rockwell products; pricing
and reimbursement status for IV Triferic, Triferic and other
Rockwell products, including eligibility for add-on reimbursement
under TDAPA; liquidity and capital resources; expected duration of
Rockwell Medical's existing working capital; plans and timing
relating to the planned commercialization of Triferic; and timing
and success of our efforts to renegotiate economic terms of our
concentrate business Rockwell 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.
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, |
|
2018 |
|
2017 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Cash and Cash
Equivalents |
$ |
22,713,980 |
|
|
$ |
8,406,917 |
|
Investments Available-for -Sale |
|
10,818,059 |
|
|
|
24,648,459 |
|
Accounts Receivable, net of a reserve of $2,104 in 2018 and $11,000
in 2017 |
|
6,979,514 |
|
|
|
6,355,566 |
|
Insurance Receivable |
|
371,217 |
|
|
|
— |
|
Inventory |
|
4,038,778 |
|
|
|
7,637,384 |
|
Prepaid
and Other Current Assets |
|
1,903,682 |
|
|
|
1,779,992 |
|
Total Current Assets |
|
46,825,230 |
|
|
|
48,828,318 |
|
Property
and Equipment, net |
|
2,638,293 |
|
|
|
2,548,978 |
|
Inventory, Non-Current |
|
1,637,000 |
|
|
|
5,986,752 |
|
Goodwill |
|
920,745 |
|
|
|
920,745 |
|
Other
Non-current Assets |
|
536,516 |
|
|
|
494,847 |
|
Total Assets |
$ |
52,557,784 |
|
|
$ |
58,779,640 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
Accounts
Payable |
$ |
4,492,071 |
|
|
$ |
4,222,159 |
|
Accrued
Liabilities |
|
5,129,761 |
|
|
|
4,715,712 |
|
Settlement Payable |
|
416,668 |
|
|
|
— |
|
Deferred
License Revenue |
|
2,252,868 |
|
|
|
— |
|
Customer
Deposits |
|
63,143 |
|
|
|
205,303 |
|
Other
Current Liability - Related Party |
|
850,000 |
|
|
|
— |
|
Total Current Liabilities |
|
13,204,511 |
|
|
|
9,143,174 |
|
|
|
|
|
|
|
Deferred
License Revenue |
|
12,076,399 |
|
|
|
16,723,318 |
|
Total Liabilities |
|
25,280,910 |
|
|
|
25,866,492 |
|
|
|
|
|
|
|
Shareholders’ Equity: |
|
|
|
|
|
Preferred Shares, no par value, no shares issued and outstanding at
December 31, 2018 and 2017 |
|
— |
|
|
|
— |
|
Common
Shares, no par value, 57,034,154 and 51,768,424 shares issued and
outstanding at December 31, 2018 and 2017, respectively |
|
299,601,960 |
|
|
|
273,210,907 |
|
Accumulated Deficit |
|
(272,388,234 |
) |
|
|
(240,262,376 |
) |
Accumulated Other Comprehensive Income (Loss) |
|
63,148 |
|
|
|
(35,383 |
) |
Total Shareholders’
Equity |
|
27,276,874 |
|
|
|
32,913,148 |
|
Total Liabilities And Shareholders’ Equity |
$ |
52,557,784 |
|
|
$ |
58,779,640 |
|
|
|
|
|
|
|
|
ROCKWELL MEDICAL, INC. AND
SUBSIDIARIES |
Condensed Consolidated Statements of
Operations |
(unaudited) |
|
|
|
Three Months
EndedDecember 31, 2018 |
|
Three Months
EndedDecember 31, 2017 |
|
Year
EndedDecember 31, 2018 |
|
Year
EndedDecember 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales |
$ |
16,854,259 |
|
|
$ |
14,838,016 |
|
|
$ |
63,388,617 |
|
|
$ |
57,300,281 |
|
Cost of
Sales |
|
15,670,109 |
|
|
|
16,062,936 |
|
|
|
64,973,157 |
|
|
|
53,598,390 |
|
Gross
Profit (Loss) |
|
1,184,150 |
|
|
|
(1,224,920 |
) |
|
|
(1,584,540 |
) |
|
|
3,701,891 |
|
Selling,
General and Administrative |
|
7,900,256 |
|
|
|
5,869,879 |
|
|
|
23,082,304 |
|
|
|
23,303,409 |
|
Settlement Expense, net of Reimbursement |
|
— |
|
|
|
— |
|
|
|
1,030,000 |
|
|
|
— |
|
Research
and Product Development |
|
1,608,823 |
|
|
|
2,126,397 |
|
|
|
5,642,317 |
|
|
|
6,321,400 |
|
Research
and Development - Licenses Acquired (Related Party) |
|
1,100,000 |
|
|
|
— |
|
|
|
1,100,000 |
|
|
|
— |
|
Operating Loss |
|
(9,424,929 |
) |
|
|
(9,221,196 |
) |
|
|
(32,439,161 |
) |
|
|
(25,922,918 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
|
|
|
|
Realized
Gain (Loss) on Investments |
|
(325 |
) |
|
|
(87,514 |
) |
|
|
(222,338 |
) |
|
|
(792,207 |
) |
Interest
Income |
|
48,932 |
|
|
|
267,336 |
|
|
|
535,328 |
|
|
|
790,226 |
|
Other
Expense |
|
410 |
|
|
|
1,348 |
|
|
|
313 |
|
|
|
2,873 |
|
Foreign
Currency Gain |
|
|
|
|
742 |
|
|
|
— |
|
|
|
742 |
|
Total Other Income (Expense) |
|
49,017 |
|
|
|
181,912 |
|
|
|
313,303 |
|
|
|
1,634 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss |
$ |
(9,375,912 |
) |
|
$ |
(9,039,284 |
) |
|
$ |
(32,125,858 |
) |
|
$ |
(25,921,284 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Net Loss per Share |
$ |
(0.17 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.61 |
) |
|
$ |
(0.51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Weighted Average Shares
Outstanding |
|
56,041,350 |
|
|
|
51,260,975 |
|
|
|
52,824,486 |
|
|
|
51,067,412 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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