This article is more than 5 years old. Information may no longer be current.
Moving past leadership changes, Rockwell Medical reports second-quarter earnings
Just weeks after forcing its CEO and several board members to exit the company, an interim leadership team at Rockwell Medical told shareholders concerned about the company’s future that it was moving ahead.
“We are going to make as much progress as we can and quickly as we can and whether it’s Q4 or Q1, what you should hear from me is that we are going to be heads down and we are going to make the best of it and build a real business here,” said Rockwell board chairman and interim CEO Ben Wolin during the earnings call with analysts and shareholders on Aug. 14. Wolin will run the company until newly hired CEO Stuart Paul takes over on Sept. 4. Paul is a former Gambro and Abbott executive.
The company has been trying to get back on its feet after firing long-time CEO Robert Chioini and chief financial officer Thomas Clema last month because of lackluster company performance and asking board members Patrick Bagley and Ronald Boyd to step down from their positions. However, the group of executives fought back; Chioini claimed the firing was invalid because it took place during a board meeting he had called and it was not on the agenda. On Aug. 7, Wolin and the remaining board reached a $1 million settlement with the former leaders. After the settlement was announced, the board announced Paul would replace Chioini as CEO and Marcum LLP was hired as the company’s new independent registered public accounting firm.
Products
However, the company’s two products – Triferic, a dialysate for hemodialysis and its hypocalcemia treatment Calcitriol – have yet to generate any revenue for the company. Rockwell had to take a $5.4 million write-off in the second quarter of Triferic product that had expired shelf life. In June, the board agreed to proceed with the commercial planning and launch of Triferic in the United States despite its lack of success to getting a separate reimbursement code from CMS for the dialysate outside the payment bundle.
“... [We] continue to focus on maximizing the opportunity with Triferic,” Wolin said during the earnings call. “The company remains focused on its commercial planning to launch the product in the U.S., while still continuing to pursue separate reimbursement. We know that with the right resources and focus we can create significant savings for clinics and the health care system and improve clinical outcomes for patients.”
On July 11, Rockwell received FDA approval of its prior approval supplement for manufacturing Calcitriol, so the company can begin to market and commercialize the drug in the United States. The company said in a press release that it does not expect Calcitriol sales to have a material impact on its total revenue for 2018.
Company earnings
Sales were $14.9 million in the second quarter of 2018, an increase of 12% during the same period last year, the company said, primarily from its hemodialysis concentrates/dialysates in the United States and abroad.
Gross profits were a loss of $4 million compared to a gross profit of $1.5 million for the same period in 2017. Included in the profit loss is the write down of Triferic inventory and a net charge of $1 million associated with the company’s settlement with the former executives and board members.
“The company has made headway on a number of fronts during the second quarter of 2018 to better position Rockwell Medical for the future,” said Wolin. “While there remains significant work ahead, we are pleased to enter the second half of the year having named a permanent CEO, engaged Marcum LLP as our new auditor and settled our dispute with former management.” –by Mark E. Neumann
References: