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): August 8, 2019

 

ROCKWELL MEDICAL, INC.

(Exact name of registrant as specified in its charter)

 

Michigan

 

000-23661

 

38-3317208

(State or other
jurisdiction of
incorporation)

 

(Commission File
Number)

 

(IRS Employer
Identification No.)

 

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)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, no par value

 

RMTI

 

Nasdaq Global Market

 

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 August 8, 2019, Rockwell Medical, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2019.  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 August 8, 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: August 8, 2019

By:

/s/ Stuart Paul

 

 

Stuart Paul

 

 

Chief Executive Officer

 

3


Exhibit 99.1

 

GRAPHIC

 

FOR IMMEDIATE RELEASE

 

Rockwell Medical, Inc. Reports Second Quarter 2019 Financial Results

 

— Company Records First Commercial Sales of Dialysate Triferic®;

FDA Accepts New Drug Application for I.V. Triferic with PDUFA date of March 28, 2020—

 

WIXOM, Mich., August 8, 2019 — 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) and chronic kidney disease (CKD), today reported business updates and financial results for the three and six months ended June 30, 2019.

 

Recent Business and Financial Highlights:

 

·                              Launched the initial product in the Triferic (ferric pyrophosphate citrate) portfolio, Dialysate Triferic, on May 6, 2019 and recorded its first commercial sales. The Company’s goal for 2019 is to drive adoption by providing medical education to healthcare providers, while increasing awareness and understanding of Triferic’s potential benefits.

 

·                              Submitted a New Drug Application (“NDA”) for I.V. Triferic in the U.S. during the second quarter and received notice of acceptance for filing from the U.S. Food and Drug Administration (“FDA”) on August 2, 2019 with a PDUFA date of March 28, 2020.

 

·                              Announced positive results of two clinical pharmacology trials of Triferic in China. Rockwell Medical and its partner in China expect to request a meeting with the National Medical Products Administration (“NMPA”) to review the results of these studies and discuss whether these studies are sufficient to support a submission for regulatory approval for Dialysate Triferic.

 

·                              Received a new J-Code from the Centers for Medicare and Medicaid Services (“CMS”), effective July 1, 2019, for the powder packet formulation of Dialysate Triferic.

 

·                              Intends to provide comments supporting eligibility of I.V. Triferic for TDAPA in response to the recently announced CMS ESRD Proposed Rule for 2020.

 

·                              Sales were $14.8 million and $30.4 million for the three and six months ended June 30, 2019, a decrease of 0.5% and increase of 1.8% over the same periods last year, respectively. The Company’s sales during the quarter and to date have substantially consisted of sales of dialysis concentrate products to DaVita, Baxter and international customers. The Company recently signed a new Products Purchase Agreement with DaVita with an initial term

 


 

through December 31, 2023 and supplies approximately 25% of the U.S. market for dialysis concentrates.

 

·                              Completed a public offering of common stock, with gross proceeds of $18.8 million.

 

·                              As of June 30, 2019, the Company had cash, cash equivalents and investments available-for-sale of $35.2 million. Additionally, the Company has approximately $38 million remaining under its at-the-market equity offering facility, pursuant to which the Company may sell, at such times and amounts as it deems appropriate, shares of common stock to support its business plan, subject to certain restrictions on use.

 

“During the second quarter, we accomplished two critical milestones: commercializing Dialysate Triferic and submitting our NDA for the I.V. Triferic formulation. We are pleased with the progress we have made in a relatively short time. Through our medical education, sales and marketing efforts, we have begun the process of converting U.S. dialysis clinics to commercial use of Dialysate Triferic, and we believe these efforts will support our launch of I.V. Triferic next year, if approved by the FDA,” stated Stuart Paul, President and Chief Executive Officer of Rockwell Medical.

 

“Our recent financing strengthens our balance sheet and supports our global commercialization and research and development efforts around Triferic. And, while we are disappointed with CMS’s proposed revisions as set forth in the ESRD Proposed Rule for 2020, we remain confident about Triferic’s future and potential to change the standard of care in anemia management for hemodialysis patients,” continued Mr. Paul.

 

Second Quarter 2019 Financial Results

 

Net loss for the second quarter of 2019 was $10.3 million, or $0.18 per basic and diluted share, compared to a net loss of $12.2 million, or $0.24 per basic and diluted share, in the second quarter of 2018. The reduction in net loss for the second quarter of 2019 compared to the second quarter of 2018 was driven primarily by an increase in gross profit and reduction in settlement expense, net of reimbursement, partially offset by an increase in sales and marketing expenses and research and product development expenses. The net loss for the second quarter of 2019 included a $1.3 million NDA application fee for I.V. Triferic and a $0.4 million accrual for the settlement of shareholder class action litigation.

 

Net sales for the second quarter of 2019 were $14.8 million compared to sales of $14.9 million during the second quarter of 2018.

 

Cost of sales for the second quarter of 2019 was $14.1 million, resulting in gross profit of $0.7 million, compared to cost of sales of $18.9 million and a gross loss of $4.0 million during the second quarter of 2018. Gross profit increased in the second quarter of 2019 compared to the second quarter of 2018 due primarily to an inventory reserve expense of $0.2 million during the second quarter of 2019 compared to an inventory reserve expense of $5.4 million during the second quarter of 2018, partially offset by a decrease in gross profit in our dialysis concentrates products of $0.6 million. The decrease in gross profit for our dialysis concentrates products was primarily attributable to increased labor, materials and overhead costs.

 


 

Selling and marketing expenses were $2.2 million for the second quarter of 2019 compared to $0.2 million in the second quarter of 2018. The increase was due primarily to marketing costs to support the launch of Triferic and an increase in sales and marketing headcount.

 

General and administrative expenses were $5.5 million during each of the second quarter of 2019 and 2018, respectively.

 

Settlement expense, net of reimbursement, was $0.4 million in the second quarter of 2019, compared to $1.0 million in the second quarter of 2018. Settlement expense for the second quarter of 2018 reflected the terms of the confidential settlement agreement and mutual release entered into with the Company’s former CEO, former CFO and a former and then current director, while Settlement expense for the second quarter of 2019 reflected an accrual for the settlement of shareholder class action litigation.

 

Research and product development expenses were $3.0 million for the second quarter of 2019 compared to $1.6 million for the second quarter of 2018. The increase was due primarily to the $1.3 million NDA application fee for I.V. Triferic, costs associated with new clinical studies for Triferic, and an increase in headcount to support the launch of Triferic, partially offset by the elimination of Calcitriol development and the reduction in testing costs on Triferic from the same period in 2018.

 

Other income, net, for the three months ended June 30, 2019 was $0.1 million, consisting of interest income. Other income for the three months ended June 30, 2018 was $0.1 million, consisting of $0.2 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 June 30, 2019, as filed by the Company with the United States Securities and Exchange Commission (“SEC”).

 

Key Objectives for 2019

 

·                  Drive adoption of Dialysate Triferic in the U.S. by raising awareness in the dialysis community of its unique benefits.

·                  Gather and analyze real-world data to support medical education and commercial efforts for Triferic.

·                  Interact with the FDA to support potential approval of I.V. Triferic in March 2020 and begin preparation for potential launch of I.V. Triferic.

·                  Use results from recently completed clinical pharmacology studies in China to support future regulatory submission to NMPA (formerly, the CFDA).

·                  Advance international opportunities for the Triferic portfolio through strategic partnerships and licensing agreements.

·                  Expand and improve operating margin for the Company’s concentrates business.

 


 

Conference Call

 

As previously announced, Rockwell Medical management will host its second quarter 2019 conference call as follows:

 

Date

Thursday, August 8, 2019

 

 

Time

4:30 PM EDT

 

 

Telephone U.S:

(877) 383-7438

 

 

International:

(678) 894-3975

 

 

Webcast (live and archive)

https://edge.media-server.com/mmc/p/w4hd4fhc

 

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.

 

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) and chronic kidney disease (CKD). 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.

 

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, including the eligibility of I.V. Triferic for add-on reimbursement under TDAPA, pursuant to CMS’ preliminary proposed rules as announced by CMS on July 29, 2019; liquidity and capital resources; expected duration of Rockwell Medical’s existing working capital; success of 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

 

 

 

June 30,

 

December 31,

 

 

 

2019

 

2018

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

Cash and Cash Equivalents

 

$

21,417,159

 

$

22,713,980

 

Investments Available-for -Sale

 

13,816,079

 

10,818,059

 

Accounts Receivable, net

 

5,388,858

 

6,979,514

 

Insurance Receivable

 

 

371,217

 

Inventory

 

3,972,637

 

4,038,778

 

Prepaid and Other Current Assets

 

3,667,605

 

1,903,682

 

Total Current Assets

 

48,262,338

 

46,825,230

 

Property and Equipment, net

 

2,563,428

 

2,638,293

 

Inventory, Non-Current

 

1,445,000

 

1,637,000

 

Right of Use Assets, net

 

3,329,481

 

 

Goodwill

 

920,745

 

920,745

 

Other Non-current Assets

 

555,222

 

536,516

 

Total Assets

 

$

 57,076,214

 

$

 52,557,784

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Accounts Payable

 

$

4,065,302

 

$

4,492,071

 

Accrued Liabilities

 

4,071,341

 

5,129,761

 

Settlement Payable

 

430,000

 

416,668

 

Lease Liability - Current

 

1,637,481

 

 

Deferred License Revenue - Current

 

2,243,256

 

2,252,868

 

Insurance Financing Note Payable

 

1,908,554

 

 

Customer Deposits

 

128,654

 

63,143

 

Other Current Liability - Related Party

 

350,000

 

850,000

 

Total Current Liabilities

 

14,834,588

 

13,204,511

 

 

 

 

 

 

 

Lease Liability - Long-Term

 

1,690,310

 

 

Deferred License Revenue - Long-Term

 

10,959,577

 

12,076,399

 

Total Liabilities

 

27,484,475

 

25,280,910

 

 

 

 

 

 

 

Shareholders’ Equity:

 

 

 

 

 

Preferred Shares, no par value, no shares issued and outstanding at June 30, 2019 and December 31, 2018

 

 

 

Common Shares, no par value, 63,398,704 and 57,034,154 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively

 

320,882,946

 

299,601,960

 

Accumulated Deficit

 

(291,358,764

)

(272,388,234

)

Accumulated Other Comprehensive Income

 

67,557

 

63,148

 

Total Shareholders’ Equity

 

29,591,739

 

27,276,874

 

Total Liabilities And Shareholders’ Equity

 

$

 57,076,214

 

$

 52,557,784

 

 


 

ROCKWELL MEDICAL, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations

(Unaudited)

 

 

 

Three Months Ended
June 30, 2019

 

Three Months Ended
June 30, 2018

 

Six Months Ended
June 30, 2019

 

Six Months Ended
June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

14,845,788

 

$

14,913,363

 

$

30,405,227

 

$

29,861,943

 

Cost of Sales

 

14,112,639

 

18,930,371

 

28,661,686

 

34,599,442

 

Gross Profit (Loss)

 

733,149

 

(4,017,008

)

1,743,541

 

(4,737,499

)

Selling and Marketing

 

2,218,997

 

164,374

 

5,321,375

 

379,457

 

General and Administrative

 

5,496,670

 

5,526,575

 

11,717,169

 

8,643,449

 

Settlement Expense, net

 

430,000

 

1,030,000

 

430,000

 

1,030,000

 

Research and Product Development

 

2,958,276

 

1,558,946

 

3,455,552

 

3,225,302

 

Operating Loss

 

(10,370,794

)

(12,296,903

)

(19,180,555

)

(18,015,707

)

 

 

 

 

 

 

 

 

 

 

Other Income

 

 

 

 

 

 

 

 

 

Realized Gain (Loss) on Investments

 

4,135

 

(122,095

)

18,023

 

(124,987

)

Interest Income

 

74,476

 

188,206

 

192,002

 

360,381

 

Total Other Income

 

78,611

 

66,111

 

210,025

 

235,394

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(10,292,183

)

$

(12,230,792

)

$

(18,970,530

)

$

(17,780,313

)

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Net Loss per Share

 

$

(0.18

)

$

(0.24

)

$

(0.33

)

$

(0.35

)

 

 

 

 

 

 

 

 

 

 

Basic and Diluted Weighted Average Shares Outstanding

 

58,216,066

 

51,288,424

 

57,660,947

 

51,288,424