About Rockwell Medical

Rockwell Medical, Inc. (Rockwell) operates as a healthcare company that develops, manufactures, commercializes, and distributes a portfolio of hemodialysis products for dialysis providers worldwide. Rockwell is a revenue-generating business and the second largest supplier of acid and bicarbonate concentrates for dialysis patients in the United States. Rockwell manufactures hemodialysis concentrates under Current Good Manufacturing Practices (cGMP) regulations at its three facilities in Michigan, Texas, and South Carolina totaling approximately 175,000 square feet, and manufactures dry acid concentrate mixers at its facility in Iowa. Rockwell delivers the majority of its hemodialysis concentrates products and mixers to dialysis clinics throughout the United States and internationally utilizing its own delivery trucks and third-party carriers. Rockwell has developed a core expertise in manufacturing and delivering hemodialysis concentrates, and has built a longstanding reputation for reliability, quality, and excellent customer service. In addition to its primary focus on hemodialysis concentrates, Rockwell has a proprietary parenteral iron product, Triferic (ferric pyrophosphate citrate (FPC)), which is indicated to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease. While Rockwell has discontinued commercialization of Triferic in the United States, the company has established several international partnerships with companies seeking to develop and commercialize Triferic outside the United States and is working closely with these international partners to develop and commercialize Triferic in their respective regions. Additionally, Rockwell continues to evaluate the viability of its FPC platform and FPC's potential to treat iron deficiency, iron deficiency anemia, and in different therapeutic settings. Strategy Rockwell Medical focuses on innovative, long-term growth strategies that enhance its products, its processes, and its people, enabling the company to deliver exceptional value to the healthcare system and provide a positive impact on the lives of hemodialysis patients. Rockwell’s strategy focuses on growing the company's revenue-generating business, which includes its hemodialysis concentrates and international partnerships for Triferic, pausing further investment in capital-intensive pharmaceutical development programs, and achieving profitability to put the company in a stronger and more stable financial position. Hemodialysis Concentrates The company’s hemodialysis concentrates products are used to sustain a patient's life by removing toxins and balancing electrolytes in a dialysis patient’s bloodstream. Rockwell's products are vital to vulnerable patients with end-stage kidney disease. The company is an established leader in manufacturing and delivering high-quality hemodialysis concentrates and dialysates, along with certain ancillary products, to dialysis providers and distributors in the United States and abroad. All of the company’s concentrate products are manufactured according to Association for the Advancement of Medical Instrumentation (AAMI) guidelines and the FDA's Current Good Manufacturing Practice (cGMP). The company’s concentrate products are diluted with purified water on-site at the clinic in the dialysis machine, creating dialysate, which works to clean the patient’s blood. A key element of the company’s dialysis business strategy going forward is to improve the strength of its concentrates business. Products In addition to using concentrate products during every in-center treatment, a dialysis provider also uses other products, such as blood tubing, fistula needles, dialyzers, drugs, specialized component kits, dressings, cleaning agents, filtration salts, and other supplies, some of which the company sells. CitraPure Citric Acid Concentrate The company’s CitraPure Concentrate is citric acid-based, and 100% acetate-free, in contrast to the acetate-based products used for many years. CitraPure has been shown to not promote inflammation associated with acetate-based products and the reduction in inflammation is beneficial to improving patient outcomes. Citrate acts as an anticoagulant and has been shown in clinical studies to reduce the need for heparin during dialysis treatment (CitraPure is not indicated for heparin sparing). CitraPure is packaged as a liquid acid concentrate in 55 gallon drums and one-gallon jugs sold in cases of four, and as a dry powder acid concentrate for use with the company’s Dry Acid Concentrate Mixer in 25 gallon cases. Dri-Sate Dry Acid Concentrate The company’s Dri-Sate Concentrate is its acetic acid-based product. Dri-Sate is packaged as a dry powder acid concentrate for use with its Dry Acid Concentrate Mixer in 25 gallon cases. RenalPure Liquid Acid Concentrate The company’s RenalPure Liquid Concentrate is its acetic acid-based product and is packaged in 55 gallon drums and cases of four one gallon jugs. Dry Acid Concentrate Mixer The company’s Dry Acid Concentrate Mixer is designed for its CitraPure and Dri-Sate Dry Acid products and enables the clinic to mix acid concentrate on-site. Clinics using its Dry Acid Concentrate products realize numerous advantages. RenalPure and SteriLyte Bicarbonate Concentrate RenalPure bicarbonate is a dry powder mixed on-site at the clinic and is packaged for bulk and individual treatment and SteriLyte bicarbonate is a liquid packaged in cases of four one-gallon jugs and is used mainly in acute care settings. Ancillary Products The company offers certain ancillary products to selected customers, including cleaning agents, 6% bleach for disinfection, citric acid descale, filtration salts, and other supplies used by hemodialysis providers. Sales and Marketing: On April 6, 2022, the company amended its agreement with its long-time partner, DaVita, Inc. (DaVita), a leading provider of kidney care, to enable it to stabilize its concentrates business. Rockwell is able to sell its hemodialysis concentrates products directly to dialysis clinics throughout the United States and around the world. The company also supplies dialysis concentrates to distributors serving a number of foreign countries, primarily in the Americas and the Pacific Rim. Nipro Medical Corporation is the primary distributor of the company’s dialysis concentrates in certain countries in Latin America. Customers The company operates in one market segment, the hemodialysis market, which involves the manufacture, sale and distribution of hemodialysis products to hemodialysis clinics, including pharmaceutical, dialysis concentrates, dialysis kits and other ancillary products used in the dialysis process. DaVita, accounted for 46% of the company’s concentrate sales in 2022. In August 2019, the company entered into the Products Purchase Agreement with DaVita, with an initial term expiring on December 31, 2023. In October 2014, the company entered into the Distribution Agreement with Baxter, which was amended in June 2017 and March 2020, pursuant to which Baxter received exclusive distribution rights for its concentrate products in the United States, a commitment by Rockwell to maintain a specified manufacturing capacity for Baxter. Nipro Medical Corporation, accounted for 7% of the company’s sales in 2022. Competition In the United States, the company’s principal competitor for concentrate products is Fresenius Medical Care NA (Fresenius). Distribution and Delivery Operations The majority of the company’s domestic dialysis concentrate products are delivered through its subsidiary, Rockwell Transportation, Inc., which operates a fleet of trucks used to deliver products to its customers. Rockwell agreed to provide certain services to a subgroup of Baxter's customers until March 31, 2023. Triferic The company’s first two branded products from its FPC platform, Triferic (dialysate) and Triferic AVNU, are indicated to maintain hemoglobin in patients undergoing hemodialysis. The company began commercializing Triferic and Triferic AVNU in the United States in the second half of 2019 and in early 2021, respectively. In addition, Rockwell established six international partnerships to develop and commercialize Triferic in China, India, Korea, Turkey, Peru and Chile. International Partnerships Rockwell continues to support its partners outside the United States who have exclusive license agreements to develop and commercialize Triferic in China, India, Korea, Turkey, Peru and Chile. Partnering in these regions allows the company to better leverage the development, regulatory, commercial presence, and expertise of business partners to increase sales of its products throughout the world. Quality Assurance and Control The company has established a Quality Management System (QMS), which defines systems and procedures used to assure quality in the design, manufacture, and delivery of its finished device and pharmaceutical products. The company utilizes Contract Manufacturing Organizations (CMOs) to manufacture and package its drug products for sale. These contract manufacturers are FDA registered drug manufacturing establishments. The company has engaged CMOs for the manufacture and packaging of Triferic. The company has one supplier for the active pharmaceutical ingredient (API) utilized in Triferic and one fill and finish vendor for the liquid formulation of Triferic (dialysate) and Triferic AVNU. Research and Development Pipeline FPC for home infusion is Rockwell's follow-up to Triferic and utilizes the FPC platform in the home infusion setting. In late 2021, Rockwell filed an IND application with the FDA for the treatment of iron deficiency anemia in patients, who are receiving medications in the home infusion setting. During the second quarter 2022, Rockwell provided the FDA with supplemental data to be used in Rockwell’s clinical studies and to clinically support the company’s IND application for home infusion. The FDA placed this program on Clinical Hold and requested that additional data related to the microbiology and short-term stability of this formulation be provided to support the application. During the third quarter of 2022, Rockwell conducted a microbial challenge and short-term stability study of FPC for Home Infusion, in accordance with FDA guidance, to support the company’s IND application. Preliminary results from the microbiology and short-term stability study indicated that the program would likely not meet the FDA’s requirements to support the IND application and would require significant capital expenditure and resources to support additional re-formulation work and conduct a Phase 2 study. As a result, Rockwell has put development work associated with FPC for Home Infusion on hold. Rockwell is also exploring FPC’s impact on the treatment of hospitalized acute heart failure patients, which affects more than one million people in the United States annually. Rockwell conducted a pre-IND meeting with the FDA in 2022 and will determine the path forward for FPC in acute heart failure as the Company works toward profitability. Material Agreements Distribution Agreement with Baxter Pursuant to the Exclusive Distribution Agreement dated October 2, 2014 (as amended, the Distribution Agreement), Baxter was the company’s exclusive agent for commercializing its hemodialysis concentrate and ancillary products in the United States to clinics other than DaVita and various foreign countries for an initial term of 10 years ending October 2, 2024. The company retained sales, marketing and distribution rights for its hemodialysis concentrate products for its international customers and in those countries in which it had an established commercial presence. In the fourth quarter of 2022, Rockwell reacquired its distribution rights to its hemodialysis concentrates products from Baxter and terminated the Distribution Agreement. Rockwell is required to pay Baxter a fee for the reacquisition of its distribution rights. This fee is payable in two equal installments on January 1, 2023 and April 1, 2023. Following the reacquisition of the distribution rights, Rockwell is able to sell its hemodialysis concentrates products to dialysis clinics throughout the United States and around the world. Baxter and Rockwell are working closely together to transition customers’ purchases of Rockwell’s hemodialysis concentrates from Baxter to Rockwell. Products Purchase Agreement with DaVita In August 2019, the company signed a Products Purchase Agreement (the Products Purchase Agreement) with DaVita. Pursuant to the Products Purchase Agreement, the company supplies certain DaVita dialysis centers with dialysis acid concentrate (i.e., CitraPure (Liquid and Dry Acid), Dri-Sate Dry Acid or RenalPure Liquid Acid) and bicarbonate (i.e., RenalPure Bicarbonate Powder or SteriLyte Liquid Bicarbonate) through December 31, 2023 (the Initial Term), subject to certain terms and conditions. Product License Agreements The company is a party to a Licensing Agreement between the company and Charak, LLC (Charak) dated January 7, 2002 (the 2002 Agreement) that grants the company exclusive worldwide rights to certain patents and information related to its Triferic products. Government Regulation The company is regulated by the FDA under the Federal Food, Drug and Cosmetic Act (the FD&C Act), as well as by other federal, state and local agencies. The company holds several FDA product approvals including for both drugs and medical devices. The testing, manufacture and sale of the company’s hemodialysis concentrates and the ancillary products it distributes are subject to regulation by numerous governmental authorities, principally the FDA and corresponding state and foreign agencies. Under the FD&C Act, and FDA regulations, the FDA regulates the pre-clinical and clinical testing, manufacture, labeling, distribution and marketing of medical devices and drugs. The company has developed and are developing drug candidates utilizing the FPC Platform. Any devices manufactured or distributed by the company pursuant to FDA clearances or approvals are subject to continuing regulation by the FDA and certain state agencies. As a manufacturer of medical devices for marketing in the United States, the company is required to adhere to regulations, including 21 CFR 820, which is commonly referred to as the Quality System Regulation, setting forth detailed cGMP requirements, which include testing, control and documentation requirements. The company must also comply with medical device reporting regulations which require that it reports to the FDA any incident in which its productsmay have caused or contributed to a death or serious injury, or in which its products malfunctioned and, if the malfunction were to recur, it would be likely to cause or contribute to a death or serious injury. The company is subject to routine inspection by the FDA and certain state agencies for compliance with cGMP requirements and other applicable quality system regulations. The company’s hemodialysis concentrate products and other ancillary devices are subject the FDA 510(k) requirements. The company has 510(k) clearance from the FDA to market hemodialysis concentrates in both liquid and powder form. In addition, the company has received 510(k) clearance for its Dry Acid Concentrate Mixer. The company must comply with the FD&C Act and related laws and regulations, including cGMP, to retain 510(k) clearances. The marketing of pharmaceutical products in the United States, such as Triferic, requires the approval of the FDA. The FDA has established regulations, guidelines and safety standards which apply to the pre-clinical evaluation, clinical testing, manufacturing and marketing of the company’s new iron maintenance therapy product and other pharmaceutical products. The results of product development and pre-clinical and clinical studies are submitted to the FDA as an NDA for approval. Trademarks Triferic, CitraPure, Dri-Sate, RenalPure, and SteriLyte are registered trademarks of Rockwell. Patents, Trademarks and Trade Secrets As of December 31, 2022, the company owned or had the rights to 30 issued patents (4 U.S. and 27 foreign) and 4 pending foreign applications. Patents and patent applications owned or licensed by it include claims to FPC in both dialysate and IV compositions, formulations and methods of making and parenteral nutritional compositions including Triferic. Research and Product Development Expense The company’s research and product development expenses were $3.1 million for the year ended December 31, 2022. Discontinued Operations In November 2022, the company announced that it discontinued its New Drug Applications (NDAs) for Triferic and Triferic AVNU in the United States. History Rockwell Medical, Inc. was founded in 1996. The company was incorporated in the state of Michigan in 1996 and re-domiciled to the state of Delaware in 2019.