Rockwell Medical, Inc.
Q1 2021 Earnings Call Transcript

Published: 17 May 2021

[Operator:]

Thank you for standing by and welcome to the Rockwell Medical First Quarter 2021 Results Call. At this time all participants are in a listen-only mode. After speaker presentation there will be a question and answer session. Please be advised that today's conference maybe recorded. I would now like to hand the conference over to your host Claudia Styslinger, Investor Relations.

[Claudia Styslinger:]

Good afternoon. This is Claudia Styslinger of Argo Partners, the Investor Relations representative for Rockwell Medical. Joining me from Rockwell Medical on today's call are Dr. Russell Ellison, President and Chief Executive Officer; and Russell Skibsted, Executive Vice President, Chief Financial Officer and Chief Business Officer; Dr. Marc Hoffman, Chief Medical Officer, and Tim Chole, Senior Vice President of Sales and Marketing, will be available for Q&A.

[Russell Ellison:]

Good afternoon and thank you for joining us. Since it has only been about six weeks since our last earnings call, where we detailed for you our strategy, we will keep this call short. In the first quarter of 2021, we continue to execute against our strategy to accelerate growth by combining the solid foundation, strength and reputation of our dialysis business with what we believe are the high growth potential from therapeutics generated from our FPC platform in multiple disease states. Our dialysis business, the base of which is the sales of concentrates continue to steadily perform. We are the second largest supplier of haemodialysis concentrates in the United States and this business generates about $60 million in annual revenue and gives us a solid foundation on which to grow. Our net sales for Triferic in the U.S. dialysis market were lower in Q1 compared to the fourth quarter of 2020. While the net number of contracted clinics increased, three clinics that where Triferic customers had to discontinue use due to acquisition or management changes. The number of clinics actively treating patients was flat quarter-over-quarter. Q4 2020 was our strongest period of sales to date. We went under contract with three new independent dialysis organizations, each of which made large purchases in preparation for Q1 implementation. However, there were delays in implementation in all three cases and repurchases did not occur in Q1.

[Russell Skibsted:]

Thanks, Russell. That's also mentioned in the first quarter we continue to execute against the strategy we laid out to accelerate growth by combining the solid foundation, strength and reputation of our dialysis business with the high growth potential from therapeutics generated from our FPC platform in multiple disease states outside of dialysis. Our dialysis business which is comprised of revenue from both Triferic and concentrates continued to steadily perform. Net sales of haemodialysis concentrates were approximately $15.2 million in the first quarter of 2021, which is about $400,000 lower than in the first quarter of 2020, but about $400,000 higher than in the fourth quarter of 2020. We believe the drop from the prior year and the increase from the prior quarter are primarily due to the COVID-19 abnormalities, which seemed to be heading back toward a semblance of normalcy. Total sales of Triferic were approximately $300,000 or roughly an 11% increase versus the sales of Triferic in the first quarter of 2020. However, for the reasons Russell mentioned earlier, it was a decrease from the approximate $359,000 in Triferic sales in the quarter just prior. Our international programs are progressing as expected, albeit a bit slower due to COVID-19, but progressing nonetheless. We end of the first quarter of 2021 with cash, cash equivalents and investments of approximately $46.1 million, which we believe puts us in a strong position to drive our company's strategic initiatives. Our cash burn in Q1 is normally higher due to one-time annualized payments. In Q1 2021, specifically our cash burn was further affected by some timing issues related to the receipt of payments for product sales and reimbursements from one of our large customers, which was subsequently received in early April. Overall, our cash burn for the first quarter was in line with our expectations and we continue to expect in aggregate. In 2021 our cash burn will be lower than it was in 2020. I'll now turn the call back to Russell Ellison for his closing remarks.

[Russell Ellison:]

Thanks, Russell. Our company has multiple near-term commercial and development milestones coming up in 2021 and 2022. These milestones include expected progress and the global expansion of Triferic as well as clinical development opportunities for our FPC platform. We're working to advance our dialysis business alongside the exciting near-term opportunity to develop FPC for home infusion in patients with IDA. I'll turn the line over to the operator for questions.

[Operator:]

Thank you. Our first question comes from the line of Brandon Folkes of Cantor Fitzgerald. Your line is open.

[Brandon Folkes:]

Hi, thanks for taking my questions, maybe just three from me. Firstly, can you talk through the taking factors between now and beginning of Phase 2 home infusion, is it just the pre-IND meeting, any other – anything else we should be focusing on? Secondly, can you just share any feedback during the quarter that you received from the NYU study quite promising last quarter? So just would be interesting getting the feedback there. And then lastly, any update on the cost optimization in the concentrates business. Thanks much.

[Russell Ellison:]

Thanks a lot, Brandon. I'll have Marc Hoffman, our Chief Medical Officer, to address your first two questions and then Russell Skibsted, our Chief Financial Officer, will address your last one. Go ahead Marc.

[Marc Hoffman:]

Will do. Thank you. Thank you for your question, Brandon. So, if I just want to repeat, so the question was what is in between us and the Phase 2 home infusion study? And you are correct, we are in the presence of putting together our pre-IND package and then we'll meet with the IND and then assuming confirmation of our study plan will progress right to the Phase 2 study program. Your second – any questions on that? Okay. And the second question was regarding the NYU data. The NYU data was published as a in the Critical Care Medicine Journal. And we're in the process of reaching out to NYU to explore the possibility of producing a full manuscript on the data. The data was produced by NYU independently and showed very positive results for both the clinical and economic benefits with the implementation of Triferic.

[Russell Skibsted:]

And then Brandon on your other question about the fee, what we're calling the whiteboard process, taking a look at the – where we can get some efficiencies out of the concentrate business. We've kicked off the program with respect to taking a look at all of the processes that we're doing. It's just the early stages right now. We're literally getting data and putting the data together, so that we can look at it and figure out exactly where we're going to get the most bang for the buck in terms of those efficiencies.

[Brandon Folkes:]

Great. Thank you very much.

[Russell Skibsted:]

Thanks, Brandon.

[Operator:]

Thank you. I would now like to pass the call back to Russell Ellison for closing remarks.

[Russell Ellison:]

Thank you all for joining us today and have a good evening.

[Operator:]

This concludes today's conference call. Thank you for participating. You may now disconnect.