Rockwell Medical, Inc. Provides Business Update, Reports Second Quarter 2018 Financial Results and Restates First Quarter 2018 Financial Results
Recent Business Updates:
- Appointment of
Stuart Paul – OnAugust 8, 2018 , the Company appointedStuart Paul as Chief Executive Officer and a Class I Director of the Board of Directors with a term expiring at the 2019 annual meeting of shareholders. This appointment is effectiveSeptember 4, 2018 . Having previously served in senior leadership roles withAbbott Laboratories ,Quest Diagnostics andGambro AB , Mr. Paul brings extensive healthcare experience, including in the renal space, significant operating expertise and commercialization know-how across both domestic and international markets. EffectiveAugust 10, 2018 ,Benjamin Wolin , our Chairman of the Board, was appointed the Company's Interim Principal Executive Officer to serve until Mr. Paul joins the Company.
- Litigation Settlement – On
August 7, 2018 , the Company and certain of its directors entered into a confidential settlement agreement and mutual release agreement with its former CEO, CFO and two former board members.
- Appointment of
Marcum LLP – As ofJuly 26, 2018 , the Audit Committee engagedMarcum LLP as its new independent registered public accounting firm.
- Calcitriol Update – On
July 11, 2018 , the Company receivedFDA approval of its Prior Approval Supplement for manufacturing Calcitriol, the Company'sFDA approved active vitamin D injection for the management of hypocalcemia in patients undergoing chronic hemodialysis. This approval was necessary to market and commercialize Calcitriol in the U.S.The Company does not expect Calcitriol sales to have a material impact on its total revenue for 2018.
- Commercialization of Triferic – In
June 2018 , the Board determined that it was in the best interests of the Company's stakeholders to immediately move ahead with the commercial planning and launch of Triferic in the U.S. and has since recruited additional talent to support these efforts. In parallel, the Company continues to work closely with industry leaders and policy makers to pursue separate reimbursement for Triferic, as the Company believes separate reimbursement has the potential to expedite the process of delivering Triferic to an even broader group of dialysis patients and clinicians. The Company does not expect Triferic sales to have a material impact on its total revenue for 2018.
Selected Financial Highlights for the Three and Six Months ended
- Sales were
$14.9 million and$29 .8 million for the three and six months endedJune 30, 2018 , an increase of 12% and 7% over the same periods last year, respectively. Sales were primarily a result of the Company's hemodialysis concentrates/dialysates to dialysis providers and distributors in the U.S. and abroad.
- Gross profits were a loss of
($4.0) million and a loss of($4.7) million for the three and six months endedJune 30, 2018 , respectively, compared to a gross profit of$1.5 million and$3.9 million for the same periods in 2017, respectively. Included in the three and six months negative gross profit for 2018 is a charge of$5.4 million and$7.6 million , respectively, to write down Triferic inventory. The write downs are a non-cash charge and are associated with both Triferic Active Pharmaceutical Ingredients (API) and finished goods inventory expected to expire past their required shelf-life dating over the 30 months for Triferic API and the 12 months for Triferic finished goods.
- Net losses were
($12.2) million , or($0.24) per share, and($17.8) million , or($0.34) per share, for the three and six months endedJune 30, 2018 , compared to a net loss of($7.1) million or($0.14) per share, and($11.8) million , or($0.23) per share, for the same periods in 2017, respectively. Included in the three and six months loss for 2018 is a write down of$5.4 million and$7.6 million , respectively, of Triferic inventory as stated above. Additionally, included in the net loss was a net charge of$1.0 million , associated with the Company's settlement with its former CEO, CFO and two former board members.
- Cash used in operating activities was
$5.2 million for the second quarter of 2018. As ofJune 30, 2018 , the Company had cash and investments of$22.7 million and working capital of$24.3 million .
The Company encourages shareholders to also review its Form 10-Q for the quarter ended
"The Company has made headway on a number of fronts during the second quarter of 2018 to better position
Mr. Wolin added, "On behalf of our Board, I would like to express our gratitude to our shareholders for their patience and support over these last several months. I'd also like to thank our employees for their dedication to our Company and to the stakeholders we serve, and our customers for their support and shared vision of helping our patients live healthier lives. As we move forward, our focus remains on realizing the potential of our innovative renal drug therapies to enhance the lives of dialysis patients and drive value for our shareholders."
Restated Financial Results for the Three Months Ended
On
A Form 10-Q/A for the quarter ended
Conference Call and Webcast
About
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 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
Contacts
212-355-4449
ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) |
||||||
June 30, |
December 31, |
|||||
2018 |
2017 |
|||||
ASSETS |
||||||
Cash and Cash Equivalents |
$ |
1,748,135 |
$ |
8,406,917 |
||
Investments Available for Sale |
20,936,973 |
24,648,459 |
||||
Insurance Receivable |
500,000 |
— |
||||
Accounts Receivable, net of a reserve of $3,400 in 2018 and $11,000 in 2017 |
5,354,406 |
6,355,566 |
||||
Inventory |
4,519,807 |
7,637,384 |
||||
Prepaid and Other Current Assets |
2,471,740 |
1,779,992 |
||||
Total Current Assets |
35,531,061 |
48,828,318 |
||||
Property and Equipment, net |
2,606,145 |
2,548,978 |
||||
Inventory, Non-Current |
1,865,834 |
5,986,752 |
||||
Goodwill |
920,745 |
920,745 |
||||
Other Non-current Assets |
494,238 |
494,847 |
||||
Total Assets |
$ |
41,418,023 |
$ |
58,779,640 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||
Accounts Payable |
$ |
3,206,620 |
$ |
4,222,159 |
||
Accrued Liabilities |
4,040,868 |
4,715,712 |
||||
Settlement Payable |
1,530,000 |
— |
||||
Current Portion of Deferred License Revenue |
2,281,034 |
— |
||||
Customer Deposits |
173,396 |
205,303 |
||||
Total Current Liabilities |
11,231,918 |
9,143,174 |
||||
Deferred License Revenue |
13,296,866 |
16,723,318 |
||||
Total Liabilities |
24,528,784 |
25,866,492 |
||||
Commitments and Contingencies |
— |
— |
||||
Shareholders' Equity: |
||||||
Common Shares, no par value, 51,768,424 shares issued and outstanding at June 30, 2018 and December 31, 2017 |
275,022,242 |
273,210,907 |
||||
Accumulated Deficit |
(258,042,689) |
(240,262,376) |
||||
Accumulated Other Comprehensive Loss |
(90,314) |
(35,383) |
||||
Total Shareholders' Equity |
16,889,239 |
32,913,148 |
||||
Total Liabilities And Shareholders' Equity |
$ |
41,418,023 |
$ |
58,779,640 |
||
ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) |
||||||||||||
Three Months |
Three Months |
Six Months |
Six Months |
|||||||||
Sales |
$ |
14,913,363 |
$ |
13,243,107 |
$ |
29,861,943 |
$ |
27,835,361 |
||||
Cost of Sales |
18,930,371 |
11,744,819 |
34,599,442 |
23,979,601 |
||||||||
Gross Profit (Loss) |
(4,017,008) |
1,498,288 |
(4,737,499) |
3,855,760 |
||||||||
Selling, General and Administrative |
5,690,949 |
6,541,179 |
9,022,906 |
12,641,894 |
||||||||
Settlement Expense, net of Reimbursement |
1,030,000 |
— |
1,030,000 |
— |
||||||||
Research and Product Development |
1,558,946 |
1,675,494 |
3,225,302 |
2,890,345 |
||||||||
Operating Loss |
(12,296,903) |
(6,718,385) |
(18,015,707) |
(11,676,479) |
||||||||
Interest and Investment Income (Loss) |
66,111 |
(364,599) |
235,394 |
(148,528) |
||||||||
Net Loss |
$ |
(12,230,792) |
$ |
(7,082,984) |
$ |
(17,780,313) |
$ |
(11,825,007) |
||||
Basic and Diluted Net Loss per Share |
$ |
(0.24) |
$ |
(0.14) |
$ |
(0.35) |
$ |
(0.23) |
||||
Basic and Diluted Weighted Average Shares Outstanding |
51,288,424 |
51,031,899 |
51,288,424 |
50,859,927 |
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