RMTI Rockwell Medical

Paul Arndt MD, LifeSci Advisors
Rob Chioini Founder and CEO
Tom Klema CFO
Ben Wolin Chairman
Ray Pratt CMO
David Bouchey IFS Securities
Call transcript
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Good day and welcome to the Rockwell Medical First Quarter 2018 Earnings Call. Today's call is being recorded. At this time, I would like to turn the conference over to Paul Arndt, Managing Director, LifeSci Advisors. Please go ahead sir.

Paul Arndt

Thank you, operator and thank you everyone. there technical delay, the for is difficulty. some Apologize Medical's XXXX financial you for conference quarter Rockwell attending Thank results first call. My LifeSci name Advisors. with is Paul Arndt

CEO this Chioini, Tom On are Chief of and Klema, call and the Officer. the Financial Company; afternoon Founder Rob

website to over Executive please go a question-and-answer call Rob, session. brief Founder statements does Any on Rockwell's this to like call that those forward-looking by cause followed company as like May constitute Reform SEC. actual actual the and cautions we prospects under risk made that turn speak that various factors of call Chioini, plans statements events results at the the Officer manufacturing are update participants Harbor indicated. on include statements Act today's to of to provisions circumstances after the for Rockwell XX, Among time-to-time conference This differ ability the statements from Private to All identified the Medical. factors reflect remind being differ date. is remarks Before and recorded to XXXX, risks The these I'd risks rebroadcast cause be these date, Triferic, for only everyone or reports materially to Litigation future call of of any to forward-looking about will ahead. today's XXXX. could and that I’d will intend be including occur and uncertainties filed commercialize may Rockwell will listen-only. Rob expectations, with Thursday, related Safe Securities from forward-looking Triferic, capabilities call that begin, forward-looking to to Chief other not and subject purposes of now materially this in and the results conference company's on audio successfully uncertainties

Rob Chioini

Thanks joining Paul. today. us for Good you afternoon. Thank

the Medical Board, Chairman Tom Ben Financial me Dr. Chief President On and Chief Wolin, and Klema, today Officer Officer. with our Vice is our the our of new call Pratt, Ray

know, you significant of for many business our poised is As growth.

to that for right Board we’ve As pleased executing the opportunities. on Ben? our evolving with provide these us the could I’m assist value thoughts and creating shareholders. afternoon here in an against be company to been focus we team organization, Ben executive in have place and this ensure to on his company the

Ben Wolin

company successful Board because pleased start in nice I today’s I Since me, be Everyday I’m Rob. and Director. many Board know sales. you would treat brief the thought Rockwell to of as the leading Thanks of with XXXX, be of I’m a to remain believe for the focused to lives worldwide. about joining have I a products In Dance great life same innovative across like and to not Chairman, the development CEO, enthusiastic right it entrepreneur change company company patients and Today, Triferic generate health from I’m very largest a public opportunity. shareholders. world that two million employees founded a at potential. over I X call. bio. customers, with company of our grew our tenure on billion we collective the an this has met products can millions digital commitment, my Health, the patients to I I value a at significant public joined Biopharma, for time a of in months and $XXX inhaled with Diplomat focus sciences I diabetes also and Director insulin million. specialty Chairman services independent revenue, Specialty in eventually idea Pharmacy, Currently approximately of provider I XXX sold the am that took nation’s pharmacy nearly and with the

on globe. patients impact products Our an are and across excellent have the immense we can

of this two a top period, of company. management entire bottom augmented been hard team review the Board has aspects initial to to alongside conduct our During all months newly working the

We way to and new share built them, Board new relationship appreciate our which to are positive the to transparency before If and when of shareholders be basis pushing hard avenues sure we accelerate on with best and find at company, are to Rockwell the of point Rob. and our partnership. on brings the management a the growth. management the every and my will pursue, opportunities turning The of that working area for me last one it back business or team growth to desire is the Board looking

answers not patients We we we shareholders. and look partnering are growth, long value our of on of a questions, that efficiency, successful committed to driving to completely constituents. collective all of goal to I our and as your all our forward with While and helping have definitive with shareholders, relationship focus our we do assure you for transparency,

to over to Rob. Now like I’d it back hand

Rob Chioini

the Tom my for I’ll start an on with progress reimbursement remarks our separate Ben. financials. on obtaining follow Klema in will details Thanks update Triferic. with

Triferic. demonstration is that expenditures. approval cover in three add-on project in project, the In This have for demonstration Medicare to timing the space transitional As saving for Triferic proposal difficult is innovation. policy clinical if the and patients and with update, estimate years would Washington demonstration implemented to Medicare any to provide. for benefits you that This makers Medicaid as proposed, would reduces from highlighting X% be a would for The our the cost to It and on the paid for our be effect know lives patients for The improved renal outcomes, either proposed new project, proposal under access had case, federal plus Medicare project. demonstration project renal remain Triferic approved. considered receiving us reimbursement. last demonstration enhancing ASP which therapy as would is includes can for the similar to two centers by clinical reimbursement innovative widespread fall and in results to

will soon. we are news We that hopeful hear

current Triferic. with new to express detail the given can we share made entering been as taken frequent you I a for hard We have you information. policy key on we new We’ve will of feel along the renal the same with and Triferic reimbursement my progress guarantee space. the a been shareholder also for not to communications want time of have I therapy with getting it’s behalf separate the working along implementing innovative when makers moment, or outcome. as understanding you. right you’re not the know continue pathway for frustration the regarding of We been it But take every to once and way. hard reimbursement response date difficult we not update date like well a nor frustration length a having for has decision, gain for with any

we Rockwell to However, process. working that be you this continued sure receive thank to place. in in We position for through we the support. at reimbursement (inaudible) everyone already sincerely the code achieve a hard the Triferic Should separate you is go I and best to want patience possible company we best as put you has outcome succeed. reimbursement,

quickly position we So in a for customers Triferic. be to to move relatively invoice should

will customers when day separate XX begin is if effect, have could that estimate sufficient adequate invoicing product is and post we inventory a best time, approval. have available to that XX we reimbursement maintained until that To lead there Our received. be we would so

the new to our may to the safety commercial that sell with improved flow you and saving savings will time know, anemia. Triferic the to their manage and is benefits clinical therapy nurse and convenience patient coupled a As Triferic of gives both cost dialysis patient’s nephrologist better the strategy the demonstrate outcome, in the to administration provider.

We from that program our our improved have clinical patient sample data benefits. and program shows

improved benefits. has and showing valuable the program sample patient a Our tool been

over to a data continuing point collected data its typical hospitalizations in time. hemoglobin this it reduction reported not number and and we ESA topic a we monitor IVI continue programs clinical data lower expand the We’re We’ve levels, seen also was will studies. through patient to The and as collection. initial reduction shows and clinics stable our of ferritin

utilizing inventory program, ensure continue CMS We our while separate with patients reimbursement. to work will have current we to gain to access expand to Triferic, sample

finished about possible. with market team and and CMS US hard API our to packaging distribution as and the We is working supply sufficient secure million are and we Washington annually, can fast have in treatments which XX as We reimbursement place. Triferic for

the turn to like to I’d Tom. call Now

XX, You supply may manufacturing expedited and receive sales The do later no waiting FDA. date have we supply are FDA the this Tuesday; review a Calcitriol date anticipated XXXX. submission target from have August view our Once initially, future, as this the in to to target expect update in under on seen we a revenue to response approval, currently XX. near from hopefully sometime approval our impact from of XXXX. is news starting we The has we confirmed our We year. hear expect with increased is final submission the positive, our have than sales for a FDA limited August material we the expect and but not to for also manufacturing

Regarding Chile agreements region actively working territory. be in our markets Peru market in business signed the in We half. X% regions combined both process. through both and development progress, There with Peru each approval, a registration revenue approximately we registration registration and are both are requires since first annually. hemodialysis Rockwell. only clinical Neither distribution for represent a studies additional the opportunity new we XX,XXX should Chile, anticipate Both process growing in patients territories, in entry after XXXX

development, in as participated at It patients solid the our especially has meaningful you through we commercial and information study presented With remain we we make the partner before clinical commercial dialysis XXXX. renal start of a In Association, one-on-one posters share. where will of Chinese same the have process, the significant recently the developments now Canada, the progress, As to countries and rates. we on other We in enter on just We the may significant we as the update Triferic a number way patients Triferic Nephrology market In market continue represents sponsored With this approximately progress second introduced as this will anticipated of we with presentations clinical to by to Triferic. mid-XXXX. three the opportunity. opportunity. to at we in Congress half wide in Triferic market when the entering track has our make half that it year to Asia-Pacific and second that Chinese well making growing for XX,XXX revenue China be are audience our enable Canada, registration China and Nephrology is believe Beijing presentation. the to is double-digit with we packaging US our

US. smaller that the IV liquid be from our approved results our accommodates delivered we in clinics Triferic that used Triferic equivalent hope Infusion in Regarding by IV by countries be or FDA Triferic should use and by bicarbonate from mostly from of receive the Triferic QX Infusions, for IV line other venous study. anticipate also via bicarbonate using product to it end the This are Despite submission We end clinical be approval the guidance FDA Triferic premixed on when We units clinics the June, Sterlite in helpful blood US, hospital the of passes acute dialysis machine. directly receive expected will commercializing in liquid the to approval in or the and QX it cartridges. dialysis the XXXX. FDA based containing of pre-mixed XXXX. infusion enables bicarbonate. arterial to Once based will

Europe. I’ll for this program we in our Europe, the to Triferic EMA designing we studies received that of fluid clinical later studies turn PD clinical Triferic the to over PD plan from initiate scientific are dosing year. this to financials. With to now We the clarify advice the study, in said, correct and In call for start further Regarding hope year. Triferic Tom

Tom Klema

effective adjustment is Thank you the when XXXX. method be quarter the of will retain quarter. takes in not of and products. did a recognition adoption the afternoon. financial by that quarter first we that result adopted and opening and customer our not impact retrospective for first covering our results did as the XXXX new the first recognized an the It significantly revenue of of this I’d modified became revenue off good majority of standard our standard control either. earnings adopted is the We quarter noting I recognition that to like the the standard start to revenue

area. an You see expanded statements will product be recognition will footnotes to details that on and in geographic footnote regarding disclosures there type the our sales revenue by including financial

the than to due quarter increase quarter was X.X% million; domestic first concentrate first primarily were sales this sales. Our was higher of XX.X XXXX. The higher

trucking an both goods resulting in driver Triferic trends was which the incoming in term. expect the quarter offset slightly sales first cost positive, has profit nationwide States. and cost increased business the United the million our profit truck X.X first shortage, business the drug over reserve. of was million from profit were million by X.X% by was million profit in near the Recent increased higher our last in industry in $XXX,XXX XXXX. inventory included expense gross to quarter gross Our would regulation partially shipments to Gross offset related Concentrate government distribution for compared increase concentrate our exacerbated to further cost approximately was X.X the year. materials those largely gross concentrate of increased international and X.X was to which within due decrease concentrate We unit was to continue first the cost, growth. volume This to quarter which X.X

Triferic We separate considerable inventory obtaining of have anticipation built reimbursement. of in

a As had in we March of X.X accounting an net the X.X Triferic of reserved quarter, the value available is million book has was X.X as much first X.X taking end goods total of use. the XX, charge, X.X product remaining of resulting and inventory million for that of And inventory And we this reserve, of and million for reserve in million. that finished X.X expired of not and reserved of March. million million

of of a this X.X is to have million Triferic ingredient produced sufficient We and active classified X.X pharmaceutical inventory. non-current million meet approximately we have API supplies of believe perspective also We demand. Triferic

last million front, million. decrease The X.X during primarily quarter SG&A the SG&A million XXXX due year. expense equity X.X million in of lower SG&A of On expense the first compensation to was was $X to compared X.X

XXX,XXX a to expense settlement activist investor We an incurred a also payment for group.

development, Triferic Research the of increase product new X.X development the may cost product research related second for efforts. Triferic last year. significantly research development and quarter to cost were the and aggregating Our the half indications and a development in cost we clinical to commercialization approval expense to incurred first first approximately in X.X and On support SG&A compared use and and in primarily in delivery anticipated of help million presentations. related quarter regulatory year products, our commercial to million testing other development incurred

was the X.X gross year. payment X.X compensation. quarter in million, lower million, investor last of first million The in mainly the X.X quarter a equity for activist loss loss to to increase net was of higher to Our X.X offset R&D million X.X in compared by million non-cash XXX,XXX the due lower cost group profit of

compared quarter. was in net $X.XX share to loss $X.XX years’ Our per first last

investments of capital resources, and and million we liquidity on XX. XX.X have approximately million we working as March capital cash of XX.X in and Now XX, of had March as

was R&D X.X X.X expenses of been had quarter related shareholder first our million activity operating approximately of using the primarily cash We activist operations used which million for the resources. our million and to cash fund settlement. uses X.X and expenses Our in R&D. in Cash operating included

fund we We cash no for sufficient was pretty least year debt operations have have and ahead. our believe a we brief. at to That

operator you any those. back have now happy to our during If I’ll questions Q&A call Q&A. I’ll some turn be the for to address


with Bouchey IFS And from our ahead. Securities. come first question David [Operator go Instructions] will Please

David Bouchey

sure well. I’m on I’d it. very today. the glad First appreciate to hello appreciated you very that much that, to up investors I taking it Thank to call do out like time are that say for the as Ben. I’m you

program? Triferic not it expired, was yet with as maybe to written well of any that Some that you that the quarter, the Is date any for has increase approaching. last that down sample the to as that maybe is quick inventory expiration questions Tom, use possible free

Tom Klema

Well to We’ve we that answer for the start we to separate certainly is light using the we policy sample program to inventory that’s clinics, will as have available yes. a and extent to under are of certainly we we in the have your using green selling of lot be built once an and insurance the increase some And reimbursement. that. reimbursement because the certainly inventory anticipation product want

David Bouchey

a also So increase use your case in you at uptick, it’s program balance, sample want to you have and that potentially your available later, news of to you want way kind a some get good free than but increase rather to it? looking is that sooner of good

Tom Klema

of in mostly it X.X first at quarter not reserved year. look that to way just been good expire quarter million would approximately that’s is for and goods, next the the a That’s there of finished fourth inventory and and

would think time let’s some was of we If get we of would year, it probably of be it lot of near the possibly. near off. and reserved probably period reserve So million what X.X longer for a we a to had a reserved able term decision, written for say end decision, be the takes to then of

David Bouchey

Chile, know in some yet, are some and Canada different some from markets the pretty knowledge. fill terms and of to lot on of international can get Peru people for accessed you’ve Are and are you and planning looking help keeping help markets who good that planning the can kind progress for who or on of hasn’t expanding US that you these of those mind people you I looking requires been in specialized roles? China a you very made

Rob Chioini

through couple a get of something term different reviewing of couple signing us sheets for have we’re some Yes, for of partners just trying world is been places CDAs, some David progress, where actually done. the handful this looking a the are outside those and places certainly over active and licensing, we phases work US a working we’ve to of and term in a now Rob. sheets all very and us are

is and to plan in continue the the the do and whether outside hemodialysis get it’s patients. product it the all out So, areas to license to that US

David Bouchey

not the to you know do until an authorization back hire the that shareholders time you as of to rolled kind Well have meeting. currently something until I holding incentive that that’s Is employees, gets on? at use stock least that

Rob Chioini

our had Triferic. to hasn’t any effect that out-license No, on ability

David Bouchey

talking to place? is talking plan How getting recruiting help about I’m you? out-license, people in that Well not I’m important

Rob Chioini

important talent. think have entice, reward to to yes, to for Well, it’s equity a always to public to attract, I retain, company top

business any of pursue get like So them we’ve we don’t. them and challenges. of We always some and we had there’s some some folks

related the with to the important a always in problem equity. far BD directly to we as in personnel As have equity, area, run haven’t it’s to but the

David Bouchey

And and I longer know or it’s impossible considered any beyond of which a to act to at or going tell Directors for CMS CMMI. minds there you have of Board the the would on the But not is CMS what’s in wait people that? date you even

Rob Chioini

we’re date certainly believe seeking we for to forward determined Well but it’s consider and and a reimbursement. it, we we best as in cutoff the interest work the of the move or request separate on status final let continually to option the haven’t company we’ll get shareholders and We and the table, go certainly reimbursement, the forward, is assessing the but that know. shareholders

David Bouchey

at question, from officials know and with Ben you’ve had has lawyers, of of your your how lobbyist but one questions to communications not, that involved been Board the And take in any Board CMMI? the or if wants or I don’t the negotiations or Chairman with least the

Rob Chioini

I’m question. happy to answer that

the handled associated to with are direct CMMI of hand-in-hand and are or management the who Washington has parts communications behalf. company. other our best working DC management individuals been path management for Board the outside So the on by forward determine of working with All

David Bouchey

question for last one Tom. got I’ve

free make of the If reflect Triferic to program, cost you reserve decided increase that adjustment in sold got you’ve to would the sample line use you an quarters goods the do use? upcoming on of to guys to some

Tom Klema

be I the of expense administrative think from a answer general be P&L. about would the and amount, push the cost Yes, selling, a same shorter and be on the to would reclassification goods

David Bouchey

disclosed very Rob the I last want are you from like the any sample increase free us guidance you again, the And a it XXXX many on are maybe policy, that and program, in United in there might percentage. decision any on can’t how but much for question you be CMS. States, large sample to have involved to kind hate but free how one of publicly and haven’t can that offer between Do now you harp

Rob Chioini

want on increasing it the we’re Well answer yes, to on is do it. increase and we

We’re week. increasing of the size and scope that program really the every

about much think think I US program sample the makeup, of the the and number many, to the isn’t in how actual more clinics with but right. important thing the so

market. very a it’s consolidated So

given in those the number, As up we large five, are make program. seven some that or six, we them certainly companies, know names, they continue are six, but of the bulk and certainly you that public, haven’t participating some are market companies to of clinics of their folks of some five, because expand and the out seven


our question take investor. We’ll next ahead. from a Greg Please private [Sibentin], go

Unidentified Analyst

the was A at Tom any you months, questions, XX on did least you of mentioned not liquidity, needs additional correct? capital couple that first see for

Tom Klema

to Yes, we has correct. which over pretty March cash we cash XX the six not our but year, to wait quarters say certainly that year used for in on that translate our do of least cash the end have and Based usage consistent would would. or X.X of to in operating cash million available, the and of that’s at we going as to in million a quarter, last been something we’re current

reimbursement based the got number on cash right we that get clinics would We quickly. cash if board, neutral we relatively we now flow of think have we’ve and be enough on

Unidentified Analyst

the based been With to years stock in to got regards on four waiting. and ago launch, I the Calcitriol patiently we’ve Calcitriol

told a it process. month expedited be were four On November the would year last in call we roughly

received the that caused something there it’s a Is four the to looks like process? be on update going month in last delay that Rob, Now August. we

Rob Chioini

approvals they different to being generic The being result. a Well flows a go than generic division hard and through there’s ebbs drug on the that’s the I then drug without backed of at and new taking FDA a up speed. mean up and drugs, delay. is bit that’s timelines little no runs the shot there why

parts drug manufacturing the generic look have down Calcitriol, line with years, companies always FDA of to division the those other and two just attention where to they’ve see section and section, there’s last CMC there’s with in long. issue a them, inspected the the this work We’re takes is there’s reviews some way if generally these the the kind we been taken there’s or last has our audited been are on no directed to why so in that

Unidentified Analyst

Got it.

So gave, August it worst it’s could be they or before correct? August case that deadline that

Rob Chioini

August maybe XX Well, deadline they’ve August a sometimes us August helps, before and us hoping response, I given they’ve off it or to that know XX, give will thinking do yes, hit better number. have think all we’re be our review just they us expedited which but their XX, let we approval

Unidentified Analyst

if mentioned call hypothetically approved, is that correct? And anticipate year, on it the revenue this earlier you any you don’t sales

Rob Chioini

to Yeah year. this anything material we be expect most likely

Unidentified Analyst

rest the being bundle Triferic the without Calcitriol without are revenues you currently see that existing from of say businesses sold, being we have? the only to safe year approved, can so Okay, the

Rob Chioini

That’s correct.

Unidentified Analyst

our position is --. And cash

Sorry, go ahead.

Rob Chioini

the cash for potential I that. come in a be could through There guarantee can’t deal but to you some licensing

Unidentified Analyst


worst our existing of rest the is for this So business case year.

is that pretty we’re to get it correctly? up, Triferic on hand the and potentially on market I’m cash much doesn’t if as summing is, understanding Board for might weather selling it enough approval the the company the the selling if have then next and until storm We year Calcitriol looking consider then

Rob Chioini

say I that. No, wouldn’t

saying we for goes happens don’t doing have this right that a said, now hard as don’t like happen if have We now, does Triferic this I like date or X. something doesn’t we’re Triferic. day by far As we’re right

that separate we’ll what all do have and conclusions of evaluating the us becomes just role approved so those we’re help forward. and some a to more if the soon. hopefully that information Triferic here going And timing some come And reimbursement certainly it plays we’ll options

Unidentified Analyst

approval? revenue for you clarification, it terms is in based not Triferic may difference waiting gap? or so waiting package? may that answer on a why dosage last this. or CMS per to big us able persistent the of of a enough Just the for and the want is for question for the we’re be selling bundle on and give to difference that big FDA waiting and as rough What to Is Is

Rob Chioini

the significantly quickly therapies issues. cross shareholders. is or That’s there’s few for after But with for for only problem renal There’s It’s just all – not space one significantly that reimbursement everybody reimbursement. innovative certainly saving value their a patients few more brings reimbursement cost really measure a an far having couple clinics. as a a reasons, versus to reimbursement separate we’re but and the going significant just is the have a new Medicare. providers, widespread incentivize to it reasons have the Triferic, this and issue more there’s reason value therapy separate the certainly innovation. including Well feeling as important will CMS access. of Separate certainly for reimbursement use the separate And for the they with all providers they way around

Unidentified Analyst

Got it.

through great of have years the the product, sure it at a or that this it main later and can’t sell it three investor to like being been we than only individual the market because because rather four And concern but bring an writing after able there’s a of haven’t investors I’m like, going Triferic but getting soon looks necessary to seems frustrated market, off we we hopefully inventory So bring my yet. like point approvals. just lot we’re not Calcitriol to

and for thank your good time luck. wish that everybody with you So guys I


does or closing and like gentlemen, turn this the for conference I’d Ladies remarks. session. today’s to question-and-answer to Chioini additional conclude back Rob over

Rob Chioini

talk and in to all next to want work shareholders continue updating just and Thank hard for or we’ll thank call our We the of advance you Rockwell that. forward to on supporting you. look to you


conference. This participation. Thank today’s for concludes you

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