Rockwell Medical, Inc.

Good morning, and welcome to Rockwell Medical's second quarter 2022 results conference call and webcast. Please note, this event is being recorded. At this time, I would like to turn the conference call over to Heather Hunter, SVP and Chief Core Affairs Officer at Rockwell Medical. Heather, please go ahead.

Good morning, and thank you for joining us for this update on Rockwell Medical. Joining me on today's conference call are Dr. Mark Strobeck, Rockwell's new President and CEO, and Russell Skipstead, Rockwell's Chief Financial Officer and Chief Business Officer. During today's call, Mark will provide an update on Rockwell's second quarter achievements, as well as an overview of the company's strategy going forward. Then, Russell will discuss Rockwell's financial results. After that, we will open the lines to take your questions. Before we begin, I would like to remind everyone that this conference call will contain forward-looking statements about Rockwell Medical within the meaning of the federal securities laws, including but not limited to the types of statements identified as forward-looking in our annual report on Form 10-K and our subsequent periodic reports filed with the SEC, which are all available on our website under the Investors section. These statements are subject to risks and uncertainties that could cause actual results to differ. Please note that these forward-looking statements reflect our opinions and expectations only as of today. Except as required by law, we specifically disclaim any obligation to update or revise these forward-looking statements in light of new information or future events. Factors that could cause actual results or outcomes to differ materially from those expressed in or implied by such forward-looking statements are discussed in greater detail in our periodic reports filed with the SEC. A recording of this conference call will be available on Rockwell Medical's website under the Investors section. At this time, I would like to turn the conference call over to Rockwell Medical's President and Chief Executive Officer, Dr. Mark Strobeck.

Thank you, Heather. Good morning, everyone, and thank you for joining us for Rockwell Medical's second quarter 2022 results conference call and webcast. My name is Mark Strobeck, and I am pleased to be presenting to you today as Rockwell's new President and CEO. Rockwell is a commercial healthcare company focused on providing life-sustaining products for patients suffering from blood disorders and diseases associated with the kidney. Rockwell is a revenue-generating business. We are the second largest supplier of acid and bicarbonate concentrates for dialysis patients in the United States. Our ferric pyrophosphate citrate platform, otherwise referred to as FPC, brings a potential opportunity to treat patients with iron deficiency anemia in the home infusion market. and to treat patients suffering from acute heart failure. And we have the opportunity to unlock the value of our manufacturing and development expertise by potentially adding new and exciting product opportunities to our portfolio. I am aware that this isn't the first CEO transition the company has experienced, and I am mindful of the impact that this has had on the company, its employees, and its stockholders. While there is much work to be done, I'm incredibly impressed with the Rockwell team, their deep expertise in our core business, and the initial progress we have recently made to improve the financial health of the company. I look forward to working with our board of directors and the talented Rockwell team to continue to build upon this momentum. I believe that in order for us to stabilize and grow our business and be effective as an organization going forward, we need to drive profitability in our hemodialysis concentrates business and our business overall. to continue to explore opportunities to develop FPC in alternative settings, and support our international partners to develop and commercialize Triferic outside the United States. We need to develop, in-license, and or acquire additional product lines in support of our concentrates business, and develop, in-license, or acquire new pharmaceutical products to bolster our emerging pipeline. And lastly, we need to continue to manage our cash resources, de-lever our business, and place Rockwell on firmer financial footing. We need to do all of this and much more. However, these efforts will be guided by a few essential tenants. We must always put the patient first. We make a number of important and, in some cases, life-sustaining products. Our commitment to quality and efficiency in our production is going to be paramount for our success and help us address the needs of our patients. Our job at Rockwell is to deliver results. Everything we do will add value and contribute to our goals and objectives. Now let me take some time to provide you with specific business updates that took place during the second quarter 2022. First, let's look at our acid and concentrates business. Hemodialysis is the most common form of end-stage renal disease treatment and is usually performed at a freestanding outpatient dialysis center, at a hospital-based outpatient center, or at a patient's home. There are approximately 500,000 patients who require in-center hemodialysis. Each patient receives approximately three treatments each week. This represents a large market opportunity for which our products are well positioned to meet the needs of patients. Rockwell has developed a core expertise in manufacturing and delivering hemodialysis concentrates and is the second largest supplier of hemodialysis concentrates in the United States. We manufacture our concentrates under CGMP regulations at our three facilities located in Michigan, Texas, and South Carolina, from which we deliver these products to dialysis clinics throughout the United States. We also manufacture mixers that are used by clinics in our Iowa facility. At the start of 2022, we began an initiative to restructure our concentrates business, the first step of which was to expand our relationship with our largest customer, DaVita, which is one of the leading providers of kidney care services in the US. During the second quarter of 2022, We successfully renegotiated our supply agreement and expanded our partnership with DaVita, which included a $15 million investment in Rockwell. We are excited to be working even more closely with DaVita to support their dialysis centers and the patients they serve. Additionally, we continue to explore new ways to improve our supply relationship with Baxter and our international customers, all of which would afford us the opportunity to support more dialysis patients and make our concentrates business more valuable to Rockwell and its stockholders. These efforts to restructure our concentrate business are now beginning to be positively reflected in our financial results. The second quarter of 2022 generated the highest quarterly revenue to date for Rockwell. We increased our top line revenue to $18.7 million in the second quarter of 2022, a 16% increase over the first quarter of 2022, and a 24% increase year over year over the second quarter of 2021. We plan to continue to drive top line revenue growth by adding additional clinics and further supporting our existing customers. We are also working on a number of operational efficiencies and cost cutting measures that we believe will right size our efforts for the revenue we generate while simultaneously being prepared for the future growth of this business. These changes should ultimately translate into improved financial performance of our concentrates business as we drive our overall business towards profitability. We expect to have more to say about these changes in the coming months. Now let's turn to Triferic. Triferic is an FDA-approved treatment indicated for the replacement of iron to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease. In the US, we continue to focus on serving our current customers. As first reported in 2021, we made the strategic shift away from supporting Triferic with a full commercial organization for the US, and therefore are in the process of seeking a US partner that can apply the appropriate commercial efforts to support Triferic products going forward. We are working diligently with our international partners to bring our products to market in their respective territories. Let me update you on the progress our partners have made. In South Korea, Jail Pharmaceutical received regulatory approval for both Triferic and Triferic Avenue in January of 2022 from the Ministry of Food and Drug Safety. Jail confirmed that in July they commercially launched Triferic in South Korea. We are excited to see our product making its way to patients and look forward to updating you on Jail's progress to commercialize Triferic. In China, our partner, Wang Bang Biopharmaceuticals enrolled the final patient in its pivotal phase three clinical trial, six months ahead of schedule, totaling 442 patients. In Turkey, our partner, Droxan Pharmaceuticals, initiated the process required to gain regulatory approval from the Central Drug Standard Control Organization. Droxan has applied and awaits for approval from an accelerated review process for Triferic with the Turkish regulatory authority. And in India, our partner Sun Pharma has a clear pathway forward with guidance from the Central Drug Standard Control Organization and is preparing to initiate the required clinical trial before the end of the year. We will work to continue to work with our partners outside the U.S. to bring Triferic to the market. We believe this strategy will provide Rockwell near-term revenue that will positively impact our bottom lines. FPC for home infusion is our follow-up to TRIFERIC and utilizes the FPC platform in the home infusion setting. Home infusion therapy, where various medications are given by infusion therapy in the home rather than at an infusion center, is a rapidly growing segment of home health care. Many patients who receive home infusion therapy suffer from chronic diseases that are associated with a high incidence of iron deficiency and anemia. Current treatment options are not well suited for use in the home setting, and there are currently no approved intravenous therapies for treatment of iron deficiency anemia in the home. If approved, FPC would be the first intravenous therapy to treat iron deficiency anemia that is approved to be administered at home. During the second quarter of 2022, Rockwell provided the FDA with supplemental data, including information on a new presentation of Triferic Avenue, to be used in our clinical studies and to commercially support our investigational new drug, or IND, application. The FDA has placed this product on clinical hold and requested that additional data related to microbiology and short-term stability of this formulation be provided to support the application. We engaged an outside organization to conduct these studies on our behalf. These studies are underway and should be completed in the third quarter of 2022. In our R&D pipeline, we are also exploring FPC's impact on the treatment of hospitalized acute heart failure patients. We believe that FPC may deliver rapidly bioavailable iron to the heart and improve cardiac energetics during hospitalization. This effect could help patients recover faster, resulting in shorter hospital stays and fewer 30-day readmissions. If so, these outcomes would translate into a meaningful reduction in healthcare costs and human suffering. we will be submitting a pre-IND meeting request to the FDA during the third quarter of 2022 and expect to meet with the FDA during the fourth quarter of 2022. Finally, in addition to focusing on our base business, we are aggressively looking at ways to grow our business. We are currently looking at new product opportunities to pair alongside our concentrates business, which would enable us to leverage our significant manufacturing and distribution capabilities and customer relationships. These opportunities could improve both our top line and bottom line. Furthermore, we are evaluating new in-licensing opportunities for our pharmaceutical business, products that seek to treat diseases in our core therapeutic areas. We believe that Rockwell's future will include multiple products generating multiple revenue streams, and we look forward to sharing more on these opportunities on future calls. As I discussed earlier, our goal is to drive our business to profitability. To access near term revenue through our existing triferic business in the US and outside the US to develop longer term revenue streams in the form of FPC for home infusion and acute heart failure and to initiate business development efforts. All would provide longer term sustainable growth for our business and support our mission to provide life sustaining products for patients suffering from blood disorders and diseases associated with the kidney. Now I will turn the call over to Russell to provide you with our financial updates for the quarter. Russell?