Rockwell Medical, Inc. Reports Third Quarter 2019 Financial Results

Wixom, Michigan, UNITED STATES


– Company reports first full quarter of results for Dialysate Triferic, highlighted by greater than 75% conversion rate from Triferic Evaluation Program –  
– Signs leading East Coast academic medical center as first Center of Excellence –

WIXOM, Mich., Nov. 11, 2019 (GLOBE NEWSWIRE) -- 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), today reported business highlights and financial results for the three- and nine-months ended September 30, 2019.

“Our mission is to transform anemia management in a wide variety of disease states across the globe while improving patients’ lives. We believe Triferic is one of the most innovative advancements in patient iron management over the last two decades. Accordingly, we are building the foundation to become a leading medical and commercial organization in the field of dialysis, which we believe will enable Triferic to become, over time, the standard of care for ESRD patients. We are pleased with the early progress we are making with the commercialization of our Triferic portfolio,” 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:
    ○  1,000+ patients on therapy at 13 contracted clinics as of September 30, 2019;
    ○  1,300+ patients on therapy at 15 clinics enrolled in the Evaluation Program;
    ○  Since launch, experienced 75% conversion rate of clinics in Evaluation Program; and
    ○  The Company entered into its first contract with a Center of Excellence1 (“COE”) for the purchase of Dialysate Triferic.
  • Appointed industry veteran John P. McLaughlin as Chairman of the Board of Directors, bringing over 30 years of executive and board experience in the biopharmaceutical industry;
  • Continued to engage with the U.S. Food and Drug Administration (“FDA”) on review activities regarding the I.V. Triferic New Drug Application (“NDA”), with a PDUFA date of March 28, 2020;
  • Committed to enhancing the Company’s medical capabilities to build a leading medical platform in the field of dialysis;
  • Sales were $15.4 million and $45.8 million for the three and nine months ended September 30, 2019, respectively, including sales of Dialysate Triferic of approximately $98,000 and $112,000, respectively; and
  • As of September 30, 2019, the Company had approximately $29.0 million of cash and cash equivalents and investments available-for-sale.

“We recognize that transforming to a new therapy from a well-entrenched approach takes time. As we build the foundation to achieve our mission, both in the U.S. and internationally, we are off to a promising start, and will continue to dedicate our resources to ensuring that hemodialysis patients have access to this innovative therapeutic,” concluded Paul.

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1 The Company defines Centers of Excellence as leading independent academic institutions that operate their own clinics or leading nephrology practices that are recognized as thought leaders in dialysis.


Third Quarter 2019 Financial Results

Net loss for the third quarter of 2019 was $7.9 million, or $0.12 per basic and diluted share, compared to a net loss of $5.0 million, or $0.10 per basic and diluted share, in the third quarter of 2018. The increase in net loss for the third quarter of 2019 compared to the third quarter of 2018 primarily reflects investments in the Company’s medical and commercial platform in the field of dialysis to support the commercialization and continued development of Triferic as Rockwell Medical executes on its business plans.

Net sales for the third quarter of 2019 were $15.4 million compared to sales of $16.7 million during the three months ended September 30, 2018.  Net sales of hemodialysis concentrates to dialysis providers and distributors in the U.S. and abroad were $15.2 million for the three months ended September 30, 2019 compared to $16.6 million for the three months ended September 30, 2018. The decrease of $1.4 million was primarily due to lower sales to international customers, offset by an increase in sales pursuant to the Company’s contract with DaVita Inc.  Net sales of Triferic were $166,000 for the three months ended September 30, 2019 compared to $68,000 for the three months ended September 30, 2018. For each of the three months ended September 30, 2019 and September 30, 2018, Triferic net sales included approximately $68,000 of deferred revenue recognized under the Company’s license in the People’s Republic of China with Wanbang Biopharmaceutical. Triferic net sales for the three months ended September 30, 2019 also included approximately $98,000 of Triferic product sales to U.S. customers.

Cost of sales during the three months ended September 30, 2019 was $15.4 million compared to cost of sales of a $14.7 million during the three months ended September 30, 2018. Cost of sales for the three months ended September 30, 2019 included $14.3 million of manufacturing and distribution costs associated with the Company’s concentrates products, and $1.1 million of inventory reserve expenses and product costs for Triferic, compared to $14.6 million and $0.1 million, respectively, for the three months ended September 30, 2018. Gross loss for the three months ended September 30, 2019 was approximately $16,000 compared to gross profit of $2.0 million for the three months ended September 30, 2018. Gross profit (loss) for the three months ended September 30, 2019 consisted of a gross loss from Triferic of $0.9 million, partially offset by gross profit of $0.9 million for the Company’s concentrates products, compared to a gross loss of $0.1 million and gross profit of $2.0 million, respectively, for the three months ended September 30, 2018. 

Selling and marketing expenses were $1.8 million during the three months ended September 30, 2019 compared with $0.1 million during the three months ended September 30, 2018. The increase of $1.7 million was due to investments the Company is making in developing a commercial platform to support the commercial launch of Triferic.

General and administrative expenses were $4.6 million during the three months ended September 30, 2019 compared with $6.0 million during the three months ended September 30, 2018. The decrease of $1.4 million is primarily due to a decrease 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 increases in insurance premiums.

Research and product development expenses were $1.5 million for the three months ended September 30, 2019 compared with $0.8 million during the three months ended September 30, 2018. The increase was due to the Company’s commitment to investing in and building the medical capabilities mentioned above, including generating data from studies and real-world use of Triferic to support medical education and development efforts, as well as the expansion of the Company’s internal medical affairs staff. 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, and an increase in headcount to support medical education efforts for Triferic.  

Other income for the three months ended September 30, 2019 was $0.1 million, consisting primarily of interest income. Other income for the three months ended September 30, 2018 was approximately $29,000, consisting of $0.13 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 September 30, 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 third quarter 2019 conference call as follows:

DateMonday, November 11, 2019
Time4:30 PM EST
Telephone U.S: (877) 383-7438
  International: (678) 894-3975
Webcast (live and archive)https://edge.media-server.com/mmc/p/kxajr6w6
  

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). 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.

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.

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%).

For more information, including full prescribing information, visit: http://www.triferic.com.

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, CMS’ recently announced final rule regarding eligibility for TDAPA; liquidity and capital resources; expected duration of Rockwell Medical's existing working capital; the progress and success with regard to 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
  September 30, December 31,
  2019 2018
   (Unaudited)   
ASSETS      
Cash and Cash Equivalents $14,421,394  $22,713,980 
Investments Available-for -Sale  14,575,589   10,818,059 
Accounts Receivable, net  5,122,453   6,979,514 
Insurance Receivable     371,217 
Inventory  3,583,452   4,038,778 
Prepaid and Other Current Assets  2,861,708   1,903,682 
Total Current Assets  40,564,596   46,825,230 
Property and Equipment, net  2,506,093   2,638,293 
Inventory, Non-Current  528,000   1,637,000 
Right of Use Assets, net  3,011,805    
Goodwill  920,745   920,745 
Other Non-current Assets  555,933   536,516 
Total Assets $48,087,172  $52,557,784 
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Accounts Payable $3,194,039  $4,492,071 
Accrued Liabilities  3,916,069   5,129,761 
Settlement Payable  270,000   416,668 
Lease Liability - Current  1,482,441    
Deferred License Revenue - Current  2,238,450   2,252,868 
Insurance Financing Note Payable  1,145,133    
Customer Deposits  48,163   63,143 
Other Current Liability - Related Party  100,000   850,000 
Total Current Liabilities  12,394,295   13,204,511 
       
Lease Liability - Long-Term  1,589,098    
Deferred License Revenue - Long-Term  10,401,166   12,076,399 
Total Liabilities  24,384,559   25,280,910 
       
Shareholders’ Equity:      
Preferred Shares, $.0001 par value, no shares issued and outstanding at September 30, 2019
and December 31, 2018
      
Common Shares, $.0001 par value; 170,000,000 shares authorized; 63,887,384 and 57,034,154
shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively
  6,389   5,703 
Additional paid-in capital  322,837,353   299,596,257 
Accumulated Deficit  (299,213,836)  (272,388,234)
Accumulated Other Comprehensive Income  72,707   63,148 
Total Shareholders’ Equity   23,702,613   27,276,874 
Total Liabilities And Shareholders’ Equity $48,087,172  $52,557,784 
       



             
ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
             
(Unaudited)
             
  Three Months Ended
September 30, 2019
 Three Months Ended
September 30, 2018
 Nine Months Ended
September 30, 2019
 Nine Months Ended
September 30, 2018
             
Net Sales $15,407,248  $16,672,416  $45,812,475  $46,534,358 
Cost of Sales  15,423,612   14,703,606   44,085,298   49,303,048 
Gross Profit (Loss)  (16,364)  1,968,810   1,727,177   (2,768,690)
Selling and Marketing  1,827,473   121,874   7,148,848   716,414 
General and Administrative  4,623,503   6,037,267   16,340,672   14,465,634 
Settlement Expense        430,000   1,030,000 
Research and Product Development  1,474,735   808,192   4,930,287   4,033,494 
Operating Loss  (7,942,075)  (4,998,523)  (27,122,630)  (23,014,232)
             
Other Income            
Realized Gain (Loss) on Investments  6,268   (97,027)  24,292   (222,014)
Interest Income, net  80,735   125,918   272,736   486,301 
Total Other Income  87,003   28,891   297,028   264,287 
             
Net Loss $(7,855,072) $(4,969,632) $(26,825,602) $(22,749,945)
             
             
Basic and Diluted Net Loss per Share $(0.12) $(0.10) $(0.45) $(0.44)
             
Basic and Diluted Weighted Average Shares
Outstanding
  63,796,723   51,288,537   59,728,446   51,288,462