UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

 


 

Date of Report (Date of earliest event reported):  March 14, 2019

 

ROCKWELL MEDICAL, INC.

(Exact name of registrant as specified in its charter)

 

Michigan

 

000-23661

 

38-3317208

(State or other

 

(Commission File

 

(IRS Employer

jurisdiction of

 

Number)

 

Identification No.)

incorporation)

 

 

 

 

 

30142 Wixom Road, Wixom, Michigan 48393

(Address of principal executive offices, including zip code)

 

(248) 960-9009

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company   o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   o

 

 

 


 

Item 2.02              Results of Operations and Financial Condition.

 

On March 14, 2019, Rockwell Medical, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2018.  A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01              Financial Statements and Exhibits.

 

(d) Exhibits.          The following exhibit is being furnished herewith:

 

EXHIBIT INDEX

 

Exhibit No.

 

Description

99.1

 

Press Release, dated March 14, 2019

 

2


 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

ROCKWELL MEDICAL, INC.

 

 

 

 

 

 

Date: March 14, 2019

By:

/s/ Stuart Paul

 

 

Stuart Paul

 

 

Chief Executive Officer

 

3


Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Rockwell Medical, Inc. Reports Fourth Quarter and Full Year 2018 Financial Results

 

— Company is poised to advance multiple formulations of Triferic®, the first and only FDA-approved therapy indicated to replace iron and maintain hemoglobin levels in adult hemodialysis patients —

 

WIXOM, Mich., March 14, 2019 — 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
Ended
December 31, 2018

 

Three Months
Ended
December 31, 2017

 

Year Ended
December 31, 2018

 

Year Ended
December 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