Rockwell Medical Reacquires Distribution Rights for its Hemodialysis Concentrates Business from Baxter
November 09 2022 - 6:00AM
Business Wire
Expects to be Profitable in 2024
Rockwell Medical, Inc. (“Rockwell” or the “Company”) (Nasdaq:
RMTI), a commercial healthcare company focused on providing
life-sustaining products for patients suffering from blood
disorders and diseases associated with the kidney, announced that
the Company is reacquiring its distribution rights to its
hemodialysis concentrates products from Baxter and has agreed to
terminate the exclusive distribution agreement dated October 2,
2014. Exclusivity and other provisions associated with the
distribution agreement terminate November 9, 2022 and the remaining
operational elements of the agreement terminate December 31,
2022.
Rockwell is the second largest supplier of life-sustaining
hemodialysis concentrates products to dialysis clinics in the
United States. Under the exclusive distribution agreement, Baxter
distributed and commercialized Rockwell’s hemodialysis concentrates
products in the United States and certain other countries. Rockwell
manufactured all hemodialysis concentrate products and provided
customer service and order delivery to nearly all U.S. customers.
Following the reacquisition of these rights, Rockwell will now be
able to sell its hemodialysis concentrates products directly to
dialysis clinics throughout the United States and around the world.
Additionally, Rockwell will now be able to independently price its
products, eliminate costs associated with manufacturing covenants,
improve manufacturing efficiencies, realize the full benefits from
those improvements, and develop, in-license, or acquire new
products to develop a broader kidney care products portfolio. This
will improve Rockwell’s overall profitability and set the Company
on a positive growth trajectory. Collectively, this affords
Rockwell the opportunity to expand its leadership position within a
large market opportunity, which currently is valued at $380 million
and is anticipated to grow to approximately $500 million by 2026 in
the United States alone.
“We are excited to reacquire the distribution rights of our
products and are now well-positioned to grow our hemodialysis
concentrates business,” said Mark Strobeck, Ph.D., President and
CEO at Rockwell Medical. “Rockwell will acquire more than 700
hemodialysis concentrates customers including hospitals, medical
centers, dialysis centers, and health systems, and will begin
selling directly to new customers throughout the United States and
internationally. With our current customers and projected growth,
we believe that Rockwell will be able to achieve annual revenue of
$100 million in the next few years. Furthermore, this transaction
allows us to drive our overall business to profitability, improve
Rockwell’s financial position, maximize revenue, and unlock the
value of our manufacturing and distribution capabilities.”
Rockwell will pay Baxter a fee for the reacquisition of its
distribution rights. This fee will be payable in two equal
installments on January 1, 2023 and April 1, 2023. To ensure that
customer needs continue to be met after January 1, 2023, Baxter and
Rockwell are working closely together to transition customers’
purchases of Rockwell’s hemodialysis concentrates from Baxter to
Rockwell.
With the completion of this transaction, along with the
Company’s expanded partnership with DaVita announced earlier this
year, and the launch of a number of new growth initiatives,
Rockwell expects to achieve profitability in 2024. If successful,
the Company expects that its cash balance will be sufficient to
fund operations going forward, thereby reducing its reliance on
funding operations through raising money in the capital
markets.
About Rockwell Medical
Rockwell Medical is a commercial healthcare company focused on
providing life-sustaining products for patients suffering from
blood disorders and diseases associated with the kidney. Rockwell
is an innovative leader in producing and delivering a portfolio of
hemodialysis products, including concentrates (solutions and
powders) and related ancillaries, to dialysis providers in the
United States and internationally. Rockwell is the second largest
supplier of acid and bicarbonate concentrates for dialysis patients
in the United States. The Company is dedicated to providing the
hemodialysis community with the highest quality products supported
by the most reliable delivery service in the industry. For more
information, visit www.RockwellMed.com.
Forward-Looking Statements
Certain statements in this press release may constitute
"forward-looking statements" within the meaning of the federal
securities laws. Words such as, "may," "might," "will," "should,"
"believe," "expect," "anticipate," "estimate," "continue," "could,"
"can," "would," "develop," "plan," "potential," "predict,"
"forecast," "project," "intend," "look forward to," "remain
confident" or the negative of these terms, and similar expressions,
or statements regarding intent, belief, or current expectations,
are forward looking statements. There can be no assurance that:
Rockwell Medical will be able to achieve planned cost savings to
operate its concentrates business profitability or achieve the
other components of its strategy; Rockwell Medical will achieve
profitability; the in-center hemodialysis concentrates market will
increase in size or that Rockwell Medical will be able to access
the expected market opportunity; termination of the exclusive
distribution agreement with Baxter will help improve Rockwell’s
balance sheet or long-term viability; Rockwell Medical’s future
cash balance will be sufficient to fund operations going forward;
or the debt pre-payment will help Rockwell Medical achieve
profitability. 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 those risks
more fully discussed in the "Risk Factors" section of our Annual
Report on Form 10-K for the year ended December 31, 2021, 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20221109005124/en/
Heather R. Hunter SVP, Chief Corporate Affairs Officer (248)
432-1362 IR@RockwellMed.com
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