SOURCE: Rockwell Medical Technologies Inc.

Rockwell Medical Technologies Inc.

August 07, 2012 07:30 ET

Rockwell Medical Reports Second Quarter 2012 Results

Clinical Development Accelerates; Gross Margins Improve

WIXOM, MI--(Marketwire - Aug 7, 2012) - Rockwell Medical (NASDAQ: RMTI), a fully-integrated biopharmaceutical company targeting end-stage renal disease (ESRD) and chronic kidney disease (CKD) with innovative products and services for the treatment of iron deficiency, secondary hyperparathyroidism and hemodialysis, announced today its results for the second quarter ended June 30, 2012.

Second Quarter Financial Highlights

  • Sales were $12.1 million compared to $11.8 million in the second quarter 2011.
  • Gross profit increased $0.6 million or a 60% increase over the second quarter of 2011.
  • Gross profit margins increased 5.1 percentage points to 14.2% compared to 9.1% in the second quarter of 2011.
  • SG&A increased $0.5 million.
  • R&D expense increased to $10.9 million compared to $3.3 million in second quarter of 2011, due to accelerated Phase III clinical development.
  • Net loss was ($11.9) million compared to a net loss of ($4.5) million in second quarter of 2011, due to higher R&D expense.

First Half 2012 Financial Highlights

  • Sales were $24.2 million compared to $25.1 million in the first half of 2011, due to lower sales to a single international distributor when comparing first quarter 2012 to first quarter 2011.
  • Gross profit margins improved 3.1 percentage points to 13.9% compared to 10.8% in the first half of 2011.
  • Gross profit dollars increased 23% or $0.6 million compared to the first half of 2011.
  • SG&A increased $1.1 million due mainly to higher non-cash charges for equity compensation.
  • R&D expense increased to $20.3 million compared to $5.7 million in the first half of 2011, due to the cost of Phase III clinical trial development of SFP.
  • Net loss was ($22.5) million compared to a net loss of ($7.5) million in first half of 2011, due to higher R&D expense.
  • Cash and cash equivalents aggregated $20.4 million as of June 30, 2012.

Current Drug Development Highlights

  • Phase III CRUISE efficacy studies have completed enrollment.
  • PRIME study designed to capture ESA-sparing data completed enrollment.
  • Data Safety Monitoring Board recommended continuation of CRUISE studies with no modifications after 3rd review.
  • Preparation for Calcitriol (vitamin-D) launch on track.
  • Raymond D. Pratt, MD, hired as Chief Medical Officer.

Mr. Robert L. Chioini, Chairman and CEO, stated, "We are pleased to report solid progress this past quarter, highlighted by the completion of enrollment in our Phase III CRUISE studies. We are approximately six months from seeing data on ESA sparing from the PRIME study, our Calcitriol product launch is expected to occur first quarter 2013, and we anticipate completion of the Phase III CRUISE studies mid-year 2013. In our operating business, second quarter operating performance was solid with sales, gross profit and gross profit margins increasing significantly over last year."

Conference Call Information:
Rockwell Medical will be hosting a conference call to review its second quarter 2012 results on Tuesday, August 7, 2012 at 8:30 am ET. Investors are encouraged to call a few minutes in advance at (877) 383-7438 or to listen to the call on the web at: http://ir.rockwellmed.com/  

About Rockwell Medical:
Rockwell Medical is a fully-integrated biopharmaceutical company targeting end-stage renal disease (ESRD) and chronic kidney disease (CKD) with innovative products and services for the treatment of iron deficiency, secondary hyperparathyroidism and hemodialysis. 

Rockwell's lead, late-stage investigational drug for iron therapy treatment is called Soluble Ferric Pyrophosphate (SFP). SFP delivers iron in a non-invasive, physiologic manner to dialysis patients via dialysate during their regular dialysis treatment. SFP is currently in ongoing Phase III clinical trials (CRUISE-1 and CRUISE-2) and addresses a $600M U.S. and $1B global market. Rockwell's Calcitriol (generic Active Vitamin D) injection for treating secondary hyperparathyroidism is expected to launch in Q1 2013 and addresses a $350M U.S. market. 

Rockwell is also an established manufacturer and leader in delivering high-quality hemodialysis concentrates/dialysates to dialysis providers and distributors in the U.S. and abroad. These products are used to maintain human life by removing toxins and replacing critical nutrients in the dialysis patient's bloodstream. Rockwell's operating infrastructure is a ready-made sales and distribution channel to provide seamless integration into the commercial market for its drug products, Calcitriol and SFP, upon FDA market approval. 

Rockwell's exclusive renal drug therapies support disease management initiatives to improve the quality of life and care of dialysis patients and are intended to deliver safe and effective therapy, while decreasing drug administration costs and improving patient convenience. Rockwell Medical is developing a pipeline of drug therapies, including extensions of SFP for indications outside of hemodialysis. Please visit www.rockwellmed.com for more information. For a demonstration of SFP's unique mechanism of action in delivering iron via dialysate, please view the animation video at http://www.rockwellmed.com/collateral/documents/english-us/mode-of-action.html.

Certain statements in this press release constitute "forward-looking statements" within the meaning of the federal securities laws, including, but not limited to, Rockwell's intention to launch Calcitriol and SFP following FDA approval. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "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. Thus, actual results could be materially different. Rockwell Medical expressly disclaims any obligation to update or alter statements whether as a result of new information, future events or otherwise, except as required by law.

   
ROCKWELL MEDICAL, INC. AND SUBSIDIARY  
   
CONSOLIDATED INCOME STATEMENTS  
   
For the three and six months ended June 30, 2012 and June 30, 2011  
   
(Unaudited)  
   
                   
    Three Months Ended
June 30, 2012
    Three Months Ended
June 30, 2011
    Six Months Ended
June 30, 2012
    Six Months Ended
June 30, 2011
 
Sales   $ 12,124,790     $ 11,802,307     $ 24,153,207     $ 25,093,094  
Cost of Sales     10,405,991       10,731,258       20,807,932       22,370,500  
  Gross Profit     1,718,799       1,071,049       3,345,275       2,722,594  
Selling, General and Administrative     2,824,379       2,372,597       5,723,063       4,619,150  
Research and Product Development     10,876,396       3,313,762       20,281,943       5,716,358  
  Operating Income (Loss)     (11,981,976 )     (4,615,310 )     (22,659,731 )     (7,612,914 )
Interest and Investment Income, net     77,091       77,542       188,188       163,510  
Interest Expense     456       504       709       1,105  
  Income (Loss) Before Income Taxes     (11,905,341 )     (4,538,272 )     (22,472,252 )     (7,450,509 )
Income Tax Expense     -       -       -       -  
  Net Income (Loss)   $ (11,905,341 )   $ (4,538,272 )   $ (22,472,252 )   $ (7,450,509 )
                                 
Basic Earnings (Loss) per Share   $ (.58 )   $ (.26 )   $ (1.12 )   $ (.43 )
                                 
                                 
Diluted Earnings (Loss) per Share   $ (.58 )   $ (.26 )   $ (1.12 )   $ (.43 )
                                 
                                 
                                 
ROCKWELL MEDICAL, INC. AND SUBSIDIARY  
   
CONSOLIDATED BALANCE SHEETS  
   
As of June 30, 2012 and December 31, 2011  
   
   
  ASSETS   June 30, 2012
(Unaudited)
    December 31,
2011
 
Cash and Cash Equivalents   $ 6,469,912     $ 5,715,246  
Investments Available for Sale     13,915,937       11,810,775  
Accounts Receivable, net of a reserve of $23,000 in 2012 and $29,000 in 2011     4,356,005       4,222,816  
Inventory     2,762,089       2,504,127  
Other Current Assets     1,893,444       1,643,565  
  Total Current Assets     29,397,387       25,896,529  
                 
Property and Equipment, net     2,034,386       2,290,476  
Intangible Assets     750,258       833,773  
Goodwill     920,745       920,745  
Other Non-current Assets     988,231       1,998,076  
  Total Assets   $ 34,091,007     $ 31,939,599  
                 
                 
  LIABILITIES AND SHAREHOLDERS' EQUITY                
                 
Capitalized Lease Obligations   $ 3,533     $ 6,470  
Accounts Payable     6,411,007       5,364,537  
Accrued Liabilities     10,794,235       8,225,015  
Customer Deposits     209,752       96,329  
  Total Current Liabilities     17,418,527       13,692,351  
                 
Capitalized Lease Obligations     591       2,280  
                 
  Shareholders' Equity:                
Common Shares, no par value, 21,267,320 and 18,710,002 shares issued and outstanding     88,407,885       67,407,847  
Common Share Purchase Warrants, 2,376,440 and 2,607,440 warrants issued and outstanding     6,897,948       7,103,975  
Accumulated Deficit     (78,457,994 )     (55,985,742 )
Accumulated Other Comprehensive Loss     (175,950 )     (281,112 )
  Total Shareholders' Equity     16,671,889       18,244,968  
                 
  Total Liabilities And Shareholders' Equity   $ 34,091,007     $ 31,939,599  
                 
                 
                 
ROCKWELL MEDICAL, INC. AND SUBSIDIARY  
   
CONSOLIDATED STATEMENTS OF CASH FLOWS  
   
For the six months ended June 30, 2012 and June 30, 2011  
   
(Unaudited)  
   
             
    2012     2011  
                 
Cash Flows From Operating Activities:                
  Net (Loss)   $ (22,472,252 )   $ (7,450,509 )
  Adjustments To Reconcile Net Loss To Net Cash Used In                
    Operating Activities:                
    Depreciation and Amortization     555,182       650,695  
    Share Based Compensation - Non-employee     614,762       64,073  
    Share Based Compensation - Employees     2,393,609       2,138,960  
    Loss (Gain) on Disposal of Assets     25,340       25,299  
                 
    Changes in Assets and Liabilities:                
      Decrease (Increase) in Accounts Receivable     (133,189 )     10,153  
      Decrease (Increase) in Inventory     (257,962 )     579,181  
      (Increase) Decrease in Other Assets     759,966       (934,548 )
      Increase (Decrease) in Accounts Payable     1,046,470       (440,717 )
      Increase in Other Liabilities     2,682,643       399,522  
        Changes in Assets and Liabilities     4,097,928       (386,409 )
        Cash Provided By (Used) In Operating Activities     (14,785,431 )     (4,957,891 )
                 
Cash Flows From Investing Activities:                
Purchase of Equipment     (242,495 )     (210,704 )
Proceeds on Sale of Assets     1,578       -  
(Purchase) of Investments Available for Sale     (2,000,000 )     (159,229 )
        Cash (Used) In Investing Activities     (2,240,917 )     (369,933 )
                 
Cash Flows From Financing Activities:                
  Proceeds from Issuance of Common Shares and Purchase Warrants     17,785,640       2,393,317  
  Payments on Notes Payable and Capital Lease Obligations     (4,626 )     (10,950 )
        Cash Provided By Financing Activities     17,781,014       2,382,367  
                 
Increase (Decrease) In Cash     754,666       (2,945,457 )
Cash At Beginning Of Period     5,715,246       12,263,449  
Cash At End Of Period   $ 6,469,912     $ 9,317,992  
                 
                 
                 

Contact Information

  • Contact:
    Michael Rice
    Investor Relations
    (646) 597-6979