Rockwell Medical, Inc. (Nasdaq: RMTI) (“Rockwell Medical” or the
“Company”), a biopharmaceutical company dedicated to transforming
the treatment of iron deficiency and iron deficiency anemia
management and improving outcomes for patients around the world,
today reported financial results and a business update for the
three months ended September 30, 2020.
“Rockwell Medical is sufficiently capitalized to
drive value creation now, in the near-term and into the future, and
we are working across three tracks concurrently: maximizing U.S.
sales of Triferic and soon-to-be-launched Triferic AVNU; expanding
the global commercial reach of Triferic through our key partners;
and strategically developing new indications for our FPC platform,”
said Russell Ellison, M.D., M.Sc., President and Chief Executive
Officer of Rockwell Medical. “I am pleased to report that we have
made important progress across all three tracks in the third
quarter of 2020.”
Third Quarter
2020 Operational Highlights
U.S. Sales - Triferic
Dialysate and
Concentrates
- Net sales for the concentrates
business were $15.0 million and net sales for Triferic were $0.3
million in the third quarter of 2020.
- There were approximately 3,400
contracted patients on therapy in the third quarter, representing
approximately 500,000 annualized treatments.
- Rockwell continues to implement
appropriate COVID-19 precautions to reduce the risk of possible
exposure to employees. The Company has experienced no material
impact on its supply chain to date. The Company continued to
experience an impact on its sales and marketing efforts for
Triferic Dialysate due to the restrictions put in place because of
COVID-19.
Triferic AVNU –
United States
- Rockwell Medical expects to
commercially launch Triferic AVNU in the United States in Q1 2021.
Triferic AVNU will be reimbursed within the End Stage Renal Disease
(“ESRD”) bundle payment that has been established for Medicare
patients.
Triferic – Global
Development and Commercialization
- Wanbang Biopharmaceutical,
Rockwell’s partner in China, is poised to enroll the first patient
in a pivotal Phase 3 trial for Triferic in China to support a
filing for regulatory approval. Hemodialysis in China has continued
to increase at a rapid rate in recent years, with over 600,000
hemodialysis patients in China, making it the largest single market
in the world.
- Sun Pharma, Rockwell’s partner in
India, submitted all regulatory appeal process documents to the
Indian Central Drugs Standard Control Organization’s Technical
Committee. Sun Pharma is navigating next steps due to the country’s
temporary suspension of regulatory review due to COVID-19. India is
a potentially attractive market for Triferic, with over 120,000
hemodialysis patients.
- In September 2020, Rockwell Medical
entered into an exclusive license agreement with Jeil
Pharmaceutical Co., Ltd. (“Jeil”), for the rights to commercialize
Triferic in South Korea. Under the terms of the license agreement,
Jeil will be the exclusive development and commercialization
partner for Triferic in South Korea. In consideration for the
license, Rockwell Medical received an upfront fee of $200,000 and
will be eligible for milestone payments and royalties on net sales.
South Korea represents a sizable and growing market opportunity,
with over 78,000 patients receiving hemodialysis annually.
New
Indications for
Ferric Pyrophosphate Citrate
(“FPC”)
Platform:
- In September 2020, the Rockwell
Medical management team, in conjunction with leading key opinion
leaders (“KOLs”), announced the Company’s growth plan and new
therapeutic opportunities for its FPC platform:○ The Company’s
priority new indication to pursue is FPC for the treatment of iron
deficiency in patients requiring home infusion therapy, a rapidly
growing area of medicine, with more than 3.2 million patients
served in 2019. Iron deficiency anemia (“IDA”) is a common
co-morbidity in many sub-groups of patients receiving home infusion
therapy, particularly in those receiving long-term home parenteral
nutrition (“HPN”). Rockwell Medical believes that FPC is uniquely
suited for the treatment of IDA in the home infusion population
based upon its kinetic profile and outstanding safety profile in
both clinical trials and post-marketing use, and may fill an unmet
clinical need as a uniquely suitable home infusion therapy for
treatment of IDA. Rockwell Medical intends to hold a Type C meeting
with the FDA in Q1 2021 to discuss the pathway for clinical
development and anticipates conducting a Phase II observational
study and a dose scheduling study to achieve proof-of-concept, with
data expected to report around the end of 2021.○ The Company is
evaluating the potential of FPC to improve cardiac function in
hospitalized acute heart failure patients. Heart failure in the
U.S. has a large and growing patient population, with more than one
million patients hospitalized each year with acute decompensated
heart failure; iron deficiency (“ID”) is a common
co-morbidity.
Third Quarter
2020 Corporate Updates
- In September 2020, Rockwell Medical
appointed Russell L. Skibsted, M.B.A., as Executive Vice President,
Chief Financial Officer and Chief Business Officer. Mr. Skibsted is
a seasoned executive with more than 25 years of experience in
finance, global business development, capital raising, investor
relations, and operations. He has worked with a variety of both
public and private life sciences companies, from commercial stage,
development stage and start up.
Third Quarter
2020 Selected Financial
Highlights
The following discussion and analysis should be
read in conjunction with our unaudited condensed consolidated
financial statements and related notes on Form 10-Q for the third
quarter ended September 30, 2020.
Net sales for the third quarter of 2020 were
$15.3 million, a decrease of 0.8% compared to net sales of $15.4
million for the third quarter of 2019. The decrease was primarily
due to a decrease in international sales of our dialysis
concentrates products. Triferic net sales for the three months
ended September 30, 2020, were approximately $0.3 million. Triferic
was launched in Q2 2019 via the sample evaluation program and there
were nominal revenues during the three months ended September 30,
2019.
Cost of sales for the third quarter of 2020 was
$14.9 million, resulting in gross profit of $0.3 million, compared
to cost of sales of $15.4 million and a nominal gross loss during
the third quarter of 2019. Gross profits are primarily related to
our concentrates business at this time.
Selling and marketing expenses were $1.7 million
for the third quarter of 2020 compared to $1.8 million for the
third quarter of 2019.
General and administrative expenses were $3.6
million for the third quarter of 2020 compared to $4.6 million for
the third quarter of 2019. The decrease of $1.0 million was
primarily due to a decrease in incentive compensation from
forfeited equity awards associated with the departure of our former
Chief Financial Officer in July 2020, a decrease in consulting
expense relating to strategic development, a decrease in accounting
costs relating to a decrease in internal audit fees; partially
offset by severance pay related to our former President and Chief
Executive Officer.
Research and product development expenses were
$1.7 million for the third quarter of 2020 compared to $1.5 million
for the third quarter of 2019. The increase in costs relate to our
scientific programs. The Company is continuing to invest in its
medical and scientific programs to support the global launch of
Triferic and the advancement of our FPC technology platform.
Net loss for the third quarter of 2020 was $7.4
million, or $0.10 per basic and diluted share, compared to a net
loss for third quarter of 2019 of $7.9 million, or $0.12 per basic
and diluted share.
Cash, cash equivalents, and investments
available-for-sale totaled $67.3 million as of September 30, 2020,
compared to $40.0 million on June 30, 2020. Working capital was
$65.2 million as of September 30, 2020, compared to $40.0 million
as of June 30, 2020.
On September 25, 2020, Rockwell Medical closed a
registered direct offering of 23,178,809 of its shares of common
stock (or common stock equivalents in lieu thereof) and short-term
warrants to purchase up purchase up to an aggregate of 23,178,809
shares of common stock to several healthcare-focused and other
institutional investors. The gross proceeds from the registered
direct offering were $35.0 million before deducting placement agent
fees and other offering expenses. The Company intends to use the
net proceeds to advance the development of FPC, currently indicated
for the maintenance of hemoglobin in dialysis, in new indications,
including for the treatment of anemia in the home infusion setting,
as well as for working capital and general corporate purposes.
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 may be eligible to draw on a third
tranche of $7.5 million upon the achievement of certain additional
milestones, including the achievement of certain Triferic sales
thresholds.
As of September 30, 2020, there were 93,573,165
shares of common stock outstanding versus 70,156,922 shares
outstanding as of June 30, 2020.
Third 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
Q3 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 7679074.
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, expected reimbursement for Triferic AVNU, the development
plans and timing for Rockwell Medical’s FPC pipeline candidates,
the patient enrollment in a clinical trial and regulatory filings
in China, regulatory approval in India and estimated market sizes.
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 commercial launch of Triferic AVNU in the United States; the
success and timing of the development of our FPC pipeline
candidates, the risk that topline clinical data and real world
results may not be predictive of future results; 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 September 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 |
(Dollars in
Thousands) |
|
|
|
|
|
September 30, 2020 |
|
December 31, 2019 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Cash and Cash Equivalents |
$ |
56,614 |
|
|
$ |
11,794 |
|
Investments
Available-for-Sale |
|
10,702 |
|
|
|
14,250 |
|
Accounts
Receivable, net |
|
4,129 |
|
|
|
4,203 |
|
Inventory,
net |
|
3,877 |
|
|
|
3,647 |
|
Prepaid and
Other Current Assets |
|
2,621 |
|
|
|
2,980 |
|
Total Current Assets |
|
77,943 |
|
|
|
36,874 |
|
Property and
Equipment, net |
|
2,785 |
|
|
|
2,433 |
|
Inventory,
Non-Current |
|
859 |
|
|
|
441 |
|
Right of Use
Assets, net |
|
2,099 |
|
|
|
3,213 |
|
Goodwill |
|
921 |
|
|
|
921 |
|
Other
Non-Current Assets |
|
629 |
|
|
|
435 |
|
Total Assets |
$ |
85,236 |
|
|
$ |
44,317 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
Accounts
Payable |
$ |
4,190 |
|
|
$ |
3,018 |
|
Accrued
Liabilities |
|
4,968 |
|
|
|
4,518 |
|
Settlement
Payable |
|
- |
|
|
|
104 |
|
Lease
Liability - Current |
|
1,155 |
|
|
|
1,493 |
|
Deferred
License Revenue - Current |
|
2,180 |
|
|
|
2,234 |
|
Insurance
Financing Note Payable |
|
- |
|
|
|
763 |
|
Customer
Deposits |
|
73 |
|
|
|
55 |
|
Other
Current Liability - Related Party |
|
142 |
|
|
|
188 |
|
Total Current Liabilities |
|
12,708 |
|
|
|
12,373 |
|
|
|
|
|
Lease
Liability - Long-Term |
|
1,039 |
|
|
|
1,781 |
|
Term Loan,
Net of Issuance Costs |
|
20,856 |
|
|
|
- |
|
Deferred
License Revenue - Long-Term |
|
8,558 |
|
|
|
9,843 |
|
Total Liabilities |
|
43,161 |
|
|
|
23,997 |
|
|
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
Preferred
Stock, $0.0001 par value, 2,000,000 shares authorized; no shares
issued and outstanding at September 30, 2020 and December 31,
2019 |
|
- |
|
|
|
- |
|
Common
Stock, $0.0001 par value; 170,000,000 shares authorized; 93,573,165
and 65,378,890 shares issued and outstanding at September 30, 2020
and December 31, 2019, respectively |
|
9 |
|
|
|
7 |
|
Additional
Paid-in Capital |
|
370,760 |
|
|
|
326,777 |
|
Accumulated
Deficit |
|
(328,743 |
) |
|
|
(306,516 |
) |
Accumulated
Other Comprehensive Income |
|
49 |
|
|
|
52 |
|
Total Stockholders’ Equity |
|
42,075 |
|
|
|
20,320 |
|
Total Liabilities and Stockholders’ Equity |
$ |
85,236 |
|
|
$ |
44,317 |
|
|
|
|
|
|
ROCKWELL
MEDICAL, INC. AND SUBSIDIARIES |
Condensed
Consolidated Statements of Operations |
(Unaudited) |
|
|
|
|
|
|
|
|
In
thousands of US dollars ($) except per share amounts |
Three Months Ended September 30, 2020 |
|
Three Months Ended September 30, 2019 |
|
Nine Months Ended September 30, 2020 |
|
Nine Months Ended September 30, 2019 |
|
|
|
|
|
|
|
|
Net Sales |
$ |
15,280 |
|
|
$ |
15,407 |
|
|
$ |
47,033 |
|
|
$ |
45,812 |
|
Cost of
Sales |
|
14,934 |
|
|
|
15,424 |
|
|
|
44,693 |
|
|
|
44,085 |
|
Gross Profit |
|
346 |
|
|
|
(17 |
) |
|
|
2,340 |
|
|
|
1,727 |
|
Selling and
Marketing |
|
1,669 |
|
|
|
1,827 |
|
|
|
5,738 |
|
|
|
7,149 |
|
General and
Administrative |
|
3,622 |
|
|
|
4,623 |
|
|
|
11,767 |
|
|
|
16,341 |
|
Settlement
Expense |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
430 |
|
Research and
Product Development |
|
1,745 |
|
|
|
1,475 |
|
|
|
5,183 |
|
|
|
4,930 |
|
Operating Loss |
|
(6,690 |
) |
|
|
(7,942 |
) |
|
|
(20,348 |
) |
|
|
(27,123 |
) |
|
|
|
|
|
|
|
|
Other Income (Expense) |
|
|
|
|
|
|
|
Realized
Gain on Investments |
|
4 |
|
|
|
6 |
|
|
|
8 |
|
|
|
24 |
|
Warrant
Modification Expense |
|
- |
|
|
|
- |
|
|
|
(837 |
) |
|
|
- |
|
Interest
Expense |
|
(666 |
) |
|
|
(16 |
) |
|
|
(1,289 |
) |
|
|
(16 |
) |
Interest
Income |
|
2 |
|
|
|
97 |
|
|
|
239 |
|
|
|
289 |
|
Total Other Income |
|
(660 |
) |
|
|
87 |
|
|
|
(1,879 |
) |
|
|
297 |
|
|
|
|
|
|
|
|
|
Net Loss |
$ |
(7,350 |
) |
|
$ |
(7,855 |
) |
|
$ |
(22,227 |
) |
|
$ |
(26,826 |
) |
|
|
|
|
|
|
|
|
Basic and Diluted Net Loss per Share |
$ |
(0.10 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.45 |
) |
Basic and Diluted Weighted Average Shares
Outstanding |
|
71,811,322 |
|
|
|
63,796,723 |
|
|
|
69,594,167 |
|
|
|
59,728,446 |
|
|
|
|
|
|
|
|
|
CONTACTS
Investors:Argot
Partners212.600.1902Rockwell@argotpartners.com
Media:David RosenArgot
Partners212.600.1902david.rosen@argotpartners.com
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