Rockwell Medical (RMTI) 8 Nov 172017 Q3 Earnings call transcript

Good day and welcome to the Rockwell Medical Third Quarter 2017 Financial Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Paul Arndt, LifeSci Advisors. Please go ahead sir.

Thank you, operator and good afternoon everyone. Rockwell quarter attending call. results for you Medical's financial third conference Thank Paul Advisors. with I'm LifeSci Arndt

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

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

for thank joining Good us. Paul. you afternoon and Thanks,

of our Ray Officer Chief with our On you. Chief and had a Vice Klema, important and number Dr. the me call We and President Medical very quarter Pratt, updates today Financial Officer. a for busy Tom will have

the same was First, million XX.X million, were the versus million from XX.X gross was net profit up versus last the Sales highlights the loss quarter’s X.X versus X.X year. performance quarter XX% million, at X.X million for financial versus time million. X.X

regarding of you Triferic, separate for us. a this priority pursuit Now our gaining reimbursement as for top know is

We last our be have update will we’ve progress to made since considerably outcome. what we favorable made and closer anticipate substantial a

with delivers Medicaid have last several and CMS productive prepared meetings also for submitted their a Among Medicare had Triferic and Triferic Innovation, at that the to savings CMS. request, provides Medicaid as Services, for improved with Over highlights the the and Medicare weeks we to Medicare the the well we Center At dialysis and other significant both innovation proposal providers. cost and clinical the to the document Centers center as patients, DMMI. benefits things

But related To should or their beneficiaries save that may research various Our reduction for put for be hospitalizations, other transfusions clinical reviews prove hemodialysis so occur intravenous adoption clinical in would from work our that driven in would In and than among iron, blood analysis in significant that suggests year. billion medications complications we patient These end-stage to based medical widespread and of treatments aim $X infection given are particular, evidence Triferic. on the would the responsible of significant show Medicare medicines, other that there which to and reductions on major and concluded in approximately XXX% protocol, only that $XX Triferic the Not things our may today services cost various patients in was money, assumptions by providers is but savings Medicare spends arise renal more dialysis Triferic which that opinion. that of patients. billion We as with treatment I if real of note part disease. would not substantially carefully Medicare true. ESRD Triferic Medicare per depend number reduce save population context, with complications believe on the treatment were in adopted. would the widely of hemodialysis real the in CMS

With reduction the are supplies administrative a in the cost medicines complications, comes for the those reduction industry. that net and dialysis burden, in a

million some per providers business, we net exceed could believe in larger the the year. For of the savings $XXX

patients As themselves better importantly, would have the quality of a we believe life.

Triferic probably we of initiative improvements key been of also issues quality energy to in single company, that experience from suffer not fatigue and low support other and have noting quality is patients has improved Triferic, are not And initiative. using sleep we a and a indicate know, reviewed data patients study from significant patients and available you hemodialysis is for that patients completed administering of It to facilities of Making there As have this many symptoms on increased worth while a that a is have adverse life. reported cognition. disturbances their date. life lower that our fatigue, Triferic energy peer levels, reaction in pharmacovigiance benefits

is CMS all that’s I life relatively don’t from soon. I decision separate leaders CMS in date agencies champions patients, of appreciate positive about be that and the educational review In these CMS cost encouraging by and on We have quality that carefully. robust what approval are a know are made and engaged. one. the our am Congress I we meantime, more we congressional specific sure, under and know, marketing is material the behalf We wish dialysis simply hardworking could reimbursement continue senior issues and as our but influential considering be in savings results. we favorable CMS to people know to know to positioned well for Triferic. to want or we Our believe efforts at timeframe expedite efforts other are of gain the of the We we generate

of patient in advertising our websites, promoting in dialysis separate reimbursement. participating with we and conferences the Additionally, of centered provider providers relevant healthcare been anticipation largest in and speaking journals services have industry

to expand, drug sample clinical entirely and very using aid central the cost to on Triferic clinics program feed Our positive. up dialysis savings made be of almost and benefits systems. is Feedback continues continue

place redundant the and distribution manufacturing a market relationships to have and supply We ready US network in entire to a go, more. with capability

driven when go. of incentive, Our current and and own adoption if benefits belief and their dialysis is, a economic Triferic by that broad demonstrated there will by reimbursement ready receives be Triferic providers, to Triferic US clinical are we separate

submission days, two we XX FDA filed the submission required review determination provide to deadline to sense has XX. that they on or The drug which with the concerns manufacturing but and issues, substantive an data. our the that within FDA needed post-approval us that FDA time let know prior extra review Regarding update to told that have FDA September get time to they not provided submission on us the Calcitriol, to needed weeks any it. ago time we simply a requested they our do was us with the extra We more

cash of no produce that be in the prepared XXX answer assuming to sufficient commercial patients Calcitriol. opportunity expect can dialysis D believe update sale about The customers, has once We approximately get we market believe We’ll quantities our FDA and We in months, have to annually. to exciting. for issues, US them. will flow. market provide considerable We as Vitamin we is other we four is FDA million we the distribute the will from begin generate further to revenue

business development, our global continue be and to Mexico American, South with with active We partners in potential Russia.

and under to discussions, discussions are evaluation regulatory We now where Korea working due-diligence are final exploratory we we the discussions and preliminary countries. also a have in time, moved American active required initiated filing have been of due-diligence same markets beyond Latin have and on interest. efforts way. Japan have prepare decisions. active we or In in At the towards lot deal activities Europe, substantial

track European Triferic anticipate the Agency, We to which the quarter expect meet quarter partnering occur first study our we we on are increase In will for year. to here the Medicines XXXX. with clinical we of next in China, first activity start after

Our more XX,XXX a with there, Canada, has and are a where has and represents revenue double In be We China is In for government for the to rates. it’s expectation market continues understand over for digit there regulatory patients dialysis commercial growing in that the with anticipate we a us. second half is path significant than we patients a patient we dialysis pharma double the commercial to a recent continue good the in dialysis as the strategic mid-XXXX. another with partners advance market expect India, regulatory at body India working population entering digits. a opportunity and patients. have we enter grow partner, of together X.X discussions company million the discussions to secured to nearing Canada In meaningful is now Triferic major market, market opportunity us the achieve approval. XXX,XXX large at fastest opportunity XXXX.

new Middle Saudi the partner discussion potential in also with for a We’re East.

may am Regarding two post-marketing the Rockwell required recall first studies for pediatric progress, report completed Triferic. development pleased for NDA has that that our our to clinical first pediatric commitment was I you of of approval approval part studies. the

Kidney the few study We just presented Nephrology meetings Society of ago. at Week American the a also data days

Triferic have of studies We’ve compared dependent approval demonstrate to XXXX. also a study This and from to proper pediatric completed the the one to and new phase dose to to iron in dialysis file XXXX, ASNA we second data ago initiate presented patient indicates patients. the study year dialysis results peritoneal iron expect mid-XXXX later of that replacement a added Currently planned X peritoneum for the phase the fluid patients We (inaudible) also XXXX expect NDA to sale population. that gain We in this Triferic a X a of at in available. in study days few clinical the we the additional uptake in had the commercial for conduct blood. The establish clinical dose in mid-XXXX. doses study range

by Regarding and will blood passing to approval Triferic, IV currently throughout solid be Triferic the to other stream use using product some intravenous cartridges be the IV dialysate. Europe which on receive in a delivery to regions. delivery commercial mid for XXXX. directly track for clinics delivery late of FDA we enables delivered remain is choice to for widespread bicarbonate

that IRIDA, we’ll six for Lastly regarding the should we will done, four in With path open the depth. to the he’s to be. call the Once financials clinical weeks, up forward determine data discuss we what more should be and able drug questions. will orphan in Tom next our

the and also XXXX nine of capital good the quarter third I’ll and months Rob, you first results discuss financial for liquidity. covering Thank and be our afternoon. and resources

than volume higher increased to XX.X% in third last XXX,XXX concentrate third across to the was the XX.X million, faster sales X.X or sales mainly Our which were included growth. approximately higher increase due million which X.X to Baxter due The quarter quarter domestic of million delivery year. of

Our higher last quarter fees year. international the sales were quarter as same and XXX,XXX last of revenue third year was recognized the from the licensing third than

first XX.X X.X increase Our sales the months in first the the or year. over nine nine of million, million an were of of last X.X% months year

due or Our for increased mainly domestic X.X% Baxter. pass-through concentrate billings additional volume services sales product delivery and increased X.X to million to

sales either were or business drug not nine ’XX. and XXXX XXX,XXX months our first significant of international the revenue Our higher was in

third million quarter of to the X.X in profit year. gross the million third was X.X last in compared Our quarter

terms resulting from contractual concentrate Our profit pricing to modifications XXX,XXX gross lower Baxter. our decreased to with due

Our net XXXX. XXX,XXX quarter were than of drug higher third business the costs approximately

of both general expense for to and lower offset compared act the inventory of annual to by lower nine XXXX to X.X gross in by nine nine for cost The offset SG&A, On gross partially annual in of were partially in was Our profit and million XXX,XXX. of year. and or offset and Equity to operations, products, million new inventory increase expense incurred professional and add business concentrate was related million the X.X legal due third and Baxter in Triferic, last to XXXX other the million to equity the testing million last and to meeting. surplus to contested expenses and and product. incurred year expenses, primarily reserves agreement by XXX,XXX. that primarily XX.X% months profit year, a increased drug was for our compared nine related our increase gross first execution presentations. third that due million, third commercial partially cost first on to related were compared with indications business for taxes for nine was The inventory Triferic personnel XX.X approval XXXX Gross the were was the cost matters expenses million compensation of year, X.X development, years nine was compared profit aggregating drug X.X in to legal XXXX was the the year. of was or the and Selling, first and legal both and compared to compared the the XXX,XXX our or XXX,XXX X.X value XXX,XXX year, X.X months benefit with meeting of months of aggregating ’XX. compensation higher our quarter Marketing fees administrative margins the delivery license of first last to Research X.X to regulatory primarily research by million year. first first a and first surplus reserves million cost Wanbang cost the quarter last X.X%. last development offset in X.X expenses the partially in XX.X% profit due product paid of third costs profit The to increase the of in regulatory lower quarter be contested primarily the shareholder of XX.X patent the and of requirements. months settlement Triferic million and months in related SG&A of used last quarter were XXXX the in was in XXX,XXX cost We development increase of XXX,XXX primarily approval an connection cost largely months costs XXX,XXX other included to increase relating expected of development nine XXX,XXX. cost months business and Gross reduction to the product

The compared X.X $X.XX to by in Our in X.X months loss The XX.X was due offset nine first of was expenses compared was gross net to loss of to share in per operating and XXXX per $X.XX year. in higher million partially The year. was quarter last to net increase lower compared due net of was Year-to-date SG&A lower to last loss the the million loss profit. million mainly for net share to in the last $X.XX first share XX.X is last nine $X.XX loss spending. months year. nine loss mainly per first R&D share the increase The compared per months year. net

our our and In is of terms of our adequate development liquidity as and and capital capital, support business operations, research position our initiatives. continue working the development cash well to drug resources, associated to as

and of had assets capital XX, As of networking of we XX.X million XX.X million. September current

million cash XX the in approximately of and have as September. investments We of end

which operating for nine R&D levels. X.X included million drug and an primarily have drug million cash for used inventory and XXXX, Cash of XX.X R&D, uses expenses. our X.X of to of of investments the in in launches Our product and been support inventory first in increase months activities operating our million was expenses

We quarter second a API of from increased the to September on adequate of production during plans the finished demand in reimbursement of capital are inventory preparation for and to Triferic during XXXX. inventory the Triferic’s conversion pharmaceutical of million the meet our third of classified X.X as Triferic believe resources demand. amount declined non-current of result we approval. quarter. separate as inventory mainly goods We’ve have We expected post The adequate. We Triferic sales XXXX, our of have anticipated believe active based XX, inventory ingredient non-current as booking in

to increase sales, we’ll we and our their expect drug from degree As receivable also accounts more modest inventories we levels. to current increase we a generate anticipate

that R&D to We turn We accounts make have I in during expect investments will on resources. well minor relation for in Q&A. expenses. With to to spending XXXX is investing now back our continue R&D and some these inventory in as and to receivable, be in believe to XXXX our as call capital resources expected operating adequate R&D the cash we operator fund our

with from Please Haff question We’ll go sir. Craig-Hallum. ahead take Charles Instructions] our [Operator first

XX.X I that from on you inflow flow held Could sale us for financing statement and the of investments XX.X under of kind noticed investments cash million a little sale for for outflows for you a million of sale. had flows, held purchase cash bit? describe

years We be repositioned the risky portfolio ahead. of to investments a portfolio interest of somewhat may that less in come light of expected increases rate the

cash three over leaving We’re net did the of our bank. of return to cash not with last we excess oppose the bank. points invest an to getting what achieved the investment XXX approximately nothing basis a it what at to years versus the company in achieve and keeping modest we’ve it return And almost by as a was is rate

bucks So million forward and X not so reposition our the and to to self we’re portfolio about very risk. intent ahead was exposed going our leave principal that we’re liquid

Rob do on then far? some (inaudible) meetings with favorable to terms of sticking expect do compelling. not that because you’ve to timing had the impossible so I’m you for the on there savings timing and discussions you but based there you CMMI the think be maybe or and think so any very CMS you’ve you CMS you about submitted is if may cost said and going their points wondering on is both sticking But in What of them. what a points now end, And outcome there, based of what you terms had predict on met and FDA you’ve reimbursement Triferic in it’s discussion I’m for ask

single the very part taking a kind been of been body have we Again they’re confident. very anything, up sticking an us with on we that’s view. all not multiple can’t discussions feel certainly get mentioned proactive view. language, there There’s the the had hasn’t opposing point. and I brought sense any no we discussions been and we been really All Well guarantee helping their issue opposing groups in the

And bundle, I’m is be that then reimbursement, if think getting would right? when wrong, assume, you this I me the about correct outside of additional

That’s correct.

to And then can the or this $X that and us billion ESRD for you the is understand provider $X of road in to that’s the if are better. help you accrued bit so us in down walk payment us additional payment that CMS bundle the just like the a help understand is savings cost bundle little goes bundle billion were through Triferic, number a ESRD or this or under savings, getting program saying scheme the

in also ESRD the detail, number that getting Without the world savings and provider board billion savings represents within and it savings government, covers to the to $X then outside to it to the across world. ESRD covers and savings and Medicare the the

when down Basically are are bundle and drug. For blood to reimbursement in go example, and to the the has patient category. the drills are days to savings it to a or in submission it costs infection cost what separate in savings in set and money aside a that significant, generated in is each blood, hospital by within a lot bundle Charles covered the for this and their outside then in could CMS a detail with hospitalization – more the then some significant give So hospitals an transfusion provider Triferic there’s CMS the says the is

for itself. the pays drug So

just current assets you from you’re inventory, on think classifying it and expecting Does one inventory Triferic inventory. non-current? that Non-current, why about to year, you’re question me liabilities. last that that within And mean non-current million that as X.X I mentioned not is sell the of

purposes. pharmaceutical finish that use would It’s We’ve planning in That’s our than that the on developed sales more next would we to XX based all months our sales. determined a ingredients operations plans in product Charles. production team be and expected inventory has essentially production that correct for active the what and go would

the So order we essentially X.X would projections something we’ve in million that got use future. based in on of our inventories the

like that’s materials So --. if raw it’s it’s finished not or inventory

of none exposed, year. exploration that exposed not in next is it’s obsolescence any the or to And

with IFS go next sir. David Securities. ahead to Bouchey go we’ll Please And

start share the me figure you I’ve a and the lot count basic questions housekeeping share earnings per out Tom. for what diluted Tom questions, for with quarter? of some but let to your was used that basic

XX million. around Right

agreement. there you recorded So higher be renegotiated might higher sales were and and about as a to Baxter, that pass-through by talking pricing lower concentrate the Baxter

be think guidance we give kind be what So to should see in gross Are or going going margins can they digits? double you what to now to up they back are how us, forward? of we about going

On a run was about continue the going has quarter. we inventory – is this but surplus we aggregating that reserve thought to now, for a it’s concentrate where business, took to it requirements XXX,XXX

increase at is passed it a So I those lines, in the of kind tend Baxter through would along look to freight pass-through. the just

simply business. say, margins require invoice amount a it’s cost It with the continue XXX,XXX some (inaudible), increase them we level. that per net just gross are saw on doesn’t zero-some that and profit it impact of to incur. of cost at game, you they We additional for the sales probably will that So it because right. is may That and putting \ zero also

everybody week I on me there department at Kidney and you their week from I the very Let of to were active Society is conference, last inland in And were in believe talk conference. know of Triferic. the wants Rob the about which American that to move subject health services. Nephrology’s representative

and little sense and a opportunities for accelerator to that Centers components Medicare gave and of You also find, talked ensure your I commercialization a kind that straight confident. have you is voice bring lot clear. and NIH a to the from which in of and will Medicaid the services, will path HHS funding can the you the together innovation key kidney be FDA, about it talk but

from interpret you do this that? how Given HHS, announcement

I very in a positive all way. interpret it

pursuit or separately. Triferic on improving doing reimbursed kidney innovative certainly been with of and new has the in it these the getting space further patients what that strengthens think supports just lives our I emphasis therapies. with And of highlights put we’re the it

a the doing, a also Bruce for backing we piggy but Greenstein set at innovations focus with and money we’re off space CMS we’re really was is what just on said, that there of now of spur strange to it’s is access innovation, to where doing stagnant what new with see they a And very CMMI. real kidney within aside want will the because been kind there’s innovation therapies obviously and patients So which work area. right

This kind of the recent little easier goes make CMMI retasking market? to it with innovative on of along to a get the bit therapies

people Back may to picked going But innovation up on market therapies Verma, CMMI, the have was in Seema and September to, in And by which patients. looking direction can in them this. the was are bring that innovation innovative some go work benefit there to the to for center. was an they the they to out and help article CMS of it Director companies

And in to very have fortunate the come to timing (inaudible). may be of then play these a things will which

timing. we made to there Yeah, focus patient care on President the but maybe personnel a it’s certainly with because with or that be all the to and don’t government. it’s hurt care more know, on, But business going seems and And just I administration certainly in of I be a We to like when felt with new been that’s came and us. certainly mentality. patients, maybe it’s always I felt don’t progress us, like quality in administration, like there of a say we turnover in good. the the then new there’s and more administration of it there lot mean doesn’t prior elect, helps certainly were was we it successful

to patient my that turn had years growing US the XXXX. than you Chinese happen earlier, mentioned might had much faster that it’s for in think estimate surpassing two I Chinese you Let’s Do And market the we in year dialysis market, thought. one the earlier?

clinics million starting It and been of is part. to a companies would with that we X,XXX so of is at treatment, fast, are US been there got a it that I some We’ve on data clinics China and which the working out need function haven’t government approach there a couple to in the in confirm just sector what there’s up. the size that of complete the And getting here certainly seems to about guess think the it’s already. the put be And and private patients my close the population US. how

probably So I at really was. terms what size, could the don’t’ estimate earlier in very they it of close happen it’s know surpass us. where point and some

that have What talk you visited your about that China, you nephrologist, during buzz licensing who conference. in any from of feedback, the did [dials] any concentrates had the any about booth

Actually fair that say there’s we as on mixing interest our well. as I probably and concentrate have, we’ve on might well our that as systems, end a change had some we do business there

for through Will be Wanbang partner? look that or would separate you a

be partners. would These likely most different

level of for CMC at give of the kind mentioned a you problems And explanation can the rate you if me a the Calcitriol. were filings? the that previous previous call FDA sign, would the beginning that of CMC What filings during is the there. I for like to identified perhaps

the one just that? are that we did about, filings or talking you one the Which prior September to in

Prior that. to

Well I had different manufacturer a reckon. we

having difficulties in some oxygen different sensitive our very the were they the with Calcitriol inconsistency so to oxygen, and headspace, and issues one didn’t standards. of there was quality We an manufacturer meet had the and controlling that it’s just in a product

So that oxygen affects Calcitriol? what is about it

and it to the ones. to although Calcitriol of easily more sensitive potency, oxidized that have it’s some the all the tend D than loses other oxidized this once is Calcitriol it very Vitamin has are and its spaces

to does fixed you that go new was the And sub-contractor so when manufacturing? the

Yes.

did they what data the how and you need done did filing exactly the batches And was FDA for many ask many for of terms how that in September provide? in did

provide there total a are absolute on of of FDA it did Well materials batches with manufactured. the there’s we three batches no as we how and data to certainly three many requirement last that typically two varies, try batches from are to But submissions. to

you as to And to you that get FDA? are longer continuing the term data submit

a Of it’s requirement. course,

And anything additional? they for haven’t asked

I of heard anything haven’t We yet.

call the I our to And now to question-and-answer session. conclude you. Thank closing for back any would or additional we’ll turn now Rob Chioini remarks. like

you update hope to for you we your news more support to some with have Thank soon. and

conclude today’s your may And that for now does disconnect. and conference. thank participation you We you