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Rockwell Medical Technologies (RMTI) Reports Second Quarter 2012 Results

8/7/2012 9:53:36 AM

WIXOM, MI--(Marketwire - August 07, 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:

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 for more information. For a demonstration of SFP's unique mechanism of action in delivering iron via dialysate, please view the animation video at

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     
                  Three Months   Three Months    Six Months     Six Months  
                     Ended          Ended          Ended          Ended     
                 June 30, 2012  June 30, 2011  June 30, 2012  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                                                            
 Administrative      2,824,379      2,372,597      5,723,063      4,619,150 
Research and                                                                
 Development        10,876,396      3,313,762     20,281,943      5,716,358 
                 -------------  -------------  -------------  ------------- 
   Income (Loss)   (11,981,976)    (4,615,310)   (22,659,731)    (7,612,914)
Interest and                                                                
 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                  
                                               June 30, 2012   December 31, 
  ASSETS                                        (Unaudited)        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          
                                                    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 
                                               =============  ============= 

Michael Rice
Investor Relations
(646) 597-6979

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