What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-04-08 compared with 2021-03-31 · 197 added, 256 removed, 501 unchanged (47% of the section changed)

Our website is included as an inactive textual reference only and nothing on the website is incorporated by reference into this Annual Report on Form 10-K.

Unless otherwise indicated in this Annual Report on Form 10-K “we,” “our,” “us,” the “the Company,” "Rockwell," “Rockwell Medical” and other similar terms refer to Rockwell Medical, Inc., together with its consolidated subsidiaries.

Unless otherwise indicated in this Annual Report on Form 10-K “we,” “our,” “us,” “the Company,” "Rockwell," “Rockwell Medical” and other similar terms refer to Rockwell Medical, Inc., together with its consolidated subsidiaries.

You are advised to read this Annual Report on Form 10-K in conjunction with other reports and documents that we file from time to time with the Securities and Exchange Commission (“SEC”).

3 unchanged sentences

The address of the SEC’s website is http://www.sec.gov.

OVERVIEW OF BUSINESS

Rockwell Medical is a commercial-stage, biopharmaceutical company developing and commercializing our next-generation parenteral iron technology platform, Ferric Pyrophosphate Citrate ("FPC"), which we believe has the potential to lead to transformative treatments for iron deficiency in multiple disease states, that we believe could reduce healthcare costs and improve patients’ lives.

We are also one of the two major suppliers of life-saving hemodialysis concentrate products to kidney dialysis clinics in the United States.

We have two novel, FDA approved therapies, Triferic and Triferic AVNU, which are the first two products developed from our FPC platform.

We are marketing both products to kidney dialysis centers for their patients receiving dialysis.

In 2021, we intend to advance our FPC platform strategy by starting a Phase II trial for the treatment of iron deficiency anemia in patients outside of dialysis, who are receiving intravenous ("IV") medications in the home infusion setting.

The trend toward providing medical care, including the delivery of medicines, at home make the home infusion market a rapidly growing area of healthcare.

We believe that the home infusion setting is a natural path for expansion of our platform as many of the patients suffer from diseases that are associated with iron deficiency and anemia.

In our R&D pipeline, we are also investigating FPC’s impact in the treatment of hospitalized patients with acute heart failure, with the potential to begin another Phase II program in these patients in 2022.

We are the second largest supplier of hemodialysis concentrates in the United States, with a reputation for excellent service, quality, and reliability.

We believe that this reputation, which is based on over 25 years of service to the kidney dialysis centers, combined with about $60 million in annual revenue, approximately 300 dedicated employees, expertise in manufacturing and logistics and the added expertise in pharmaceutical development and commercialization brought to the Company by recent additions to our management team, gives us a solid foundation on which to grow.

At Rockwell Medical, we are dedicated to replacing the currently inadequate standard of care for treatment of iron deficiency in acute and chronic disease by leveraging our proprietary FPC platform technology.

Our proprietary drug platform, FPC, is a next-generation parenteral iron therapeutic.

We believe our FPC platform has several advantages over other parenteral iron therapies.

Importantly, it provides iron that is immediately available for critical body processes once it is administered.

It has been demonstrated to be safe and well-tolerated, with a safety profile similar to placebo.

Iron deficiency can develop into a serious medical condition that is often overlooked and undertreated in several illnesses because it is hard to treat.

It is a common comorbidity in many disease states, such as end-stage kidney disease, chronic kidney disease, acute heart failure, cancer and multiple chronic gastrointestinal conditions.

Iron deficiency impacts patients’ health in many ways, including anemia, organ dysfunction, slower recovery, diminished energy and reduced quality of life.

Strategy Evolution and Overview

Rockwell Medical has evolved its strategy over the past year to develop into a more medically-, scientifically- and data-driven company.

We believe future clinical, regulatory and commercial success require the right people with the right

experience to navigate us to the right data.

There has been an evolution of both our management and board, providing us with greater relevant experience.

In particular, we have added board members and employees with significant medical and commercial experience in iron deficiency anemia and the dialysis sector, drug development and commercialization, small-cap public company finance and management and clinical nurse educator patient support.

We believe these changes support an improved execution of our strategy to generate data that will support future commercial growth, fair reimbursement and regulatory approvals.

Our strategy is to accelerate Rockwell’s growth by creating and developing pharmaceutical products based on our FPC technology for disease states where patients can benefit the most from an effective treatment for iron deficiency, while concurrently refining our dialysis business to drive incremental growth and efficiencies.

We plan to leverage and build on the foundation provided by our current dialysis business serving kidney dialysis centers by developing a pipeline of additional potential drug therapies in multiple disease states.

We’ve preliminarily identified three disease states where we believe FPC may have the biggest impact.

Dialysis Business:

We are the second largest supplier, and one of the two major suppliers of hemodialysis concentrates in the United States.

We manufacture, sell and deliver hemodialysis concentrates, which are used to maintain human life by removing toxins and balancing electrolytes in the dialysis patient’s bloodstream.

We have core capabilities in manufacturing hemodialysis concentrates in three facilities, totaling 159,000 square feet, located in Michigan, Texas and South Carolina.

We also have core capabilities in the logistics of delivering these products to dialysis clinics throughout most of the United States.

Our first two branded products from our FPC platform, Triferic ® (dialysate) and Triferic AVNU ® (IV), are used to maintain hemoglobin in patients undergoing hemodialysis.

We are building on our reputation and industry presence by commercializing then to medium and small dialysis organizations.

We began commercializing Triferic and Triferic AVNU in the United States in the second half of 2019 and in early 2021, respectively.

Our strategy for increasing Triferic adoption is to continue to generate data in clinics showing the benefits of Triferic in real world protocols.

In addition, we expect to study Triferic use with the innovations that we believe have the potential to change future medical practices (e.g.

introduction and adoption of HIF-PHIs as described below).

We believe that positive data from these studies would better position Triferic for long-term growth.

We are developing strategic alliance partners for development, regulatory approval and commercialization of Triferic outside of the United States.

Home Infusion Program:

We are initiating a clinical trial program of FPC for the treatment of iron deficiency anemia in the home-infusion setting.

Many patient groups requiring home infusion therapies suffer from chronic diseases that are associated with a high incidence of iron deficiency and anemia.

Home infusion represents a large and rapidly-growing segment of healthcare where we believe FPC may have distinct advantages over currently available iron replacement therapy options.

Pipeline Development:

We are investigating the use of our FPC platform for the treatment of hospitalized patients with acute heart failure.

We believe that FPC may deliver rapidly bioavailable iron to the heart and improve cardiac energetics.

This effect could help patients recover faster, resulting in shorter hospital stays and fewer 30-day re-admissions, which would be a meaningful reduction healthcare costs and human suffering.

General Information

8 unchanged sentences

We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other company.

Our Growth Strategy

We plan to accelerate our growth by combining the solid foundation, strength and reputation of our dialysis business with the high-growth potential from therapeutics derived (or generated) from our FPC platform in multiple disease states where patients can benefit the most from an effective treatment for iron deficiency.

In parallel with continually seeking to drive incremental growth and efficiencies in our dialysis business unit, our strategy is to accelerate the growth of our business in large, higher-margin markets by creating and developing pharmaceutical products based on our proprietary FPC technology that address iron deficiency in patients who are currently under-treated.

OVERVIEW OF BUSINESS

Rockwell Medical is a commercial-stage, biopharmaceutical company developing and commercializing our next-generation parenteral iron technology platform, Ferric Pyrophosphate Citrate ("FPC"), which we believe has the potential to lead to transformative treatments for iron deficiency in multiple disease states, reduce healthcare costs and improve patients’ lives.

We are also one of the two major suppliers of life-saving hemodialysis concentrate products to kidney dialysis clinics in the United States.

We have two novel, FDA approved therapies, Triferic and Triferic AVNU, which are the first two products developed from our FPC platform.

We market both products to kidney dialysis centers for their patients receiving dialysis.

In late 2021, we filed an IND with the United Stated Food and Drug Administration ("FDA") with the goal to advance our FPC platform strategy by conducting a Phase II trial for the treatment of iron deficiency anemia in patients outside of dialysis, who are receiving intravenous ("IV") medications in the home infusion setting.

The trend toward providing medical care, including the delivery of infused medications at home, make the home infusion market a rapidly growing area of healthcare.

We believe that the home infusion setting is a natural path for expansion of our platform as many of the patients suffer from diseases that are associated with iron deficiency and anemia.

In our R&D pipeline, we are also investigating FPC’s impact in the treatment of hospitalized patients with acute heart failure.

At Rockwell Medical, we are dedicated to enhancing the currently sub-optimal standard of care for treatment of iron deficiency in acute and chronic disease by leveraging our proprietary FPC platform technology.

Our proprietary drug platform, FPC, is a next-generation parenteral iron therapeutic.

We believe our FPC platform has several advantages over other parenteral iron therapies.

Importantly, it provides iron that is immediately bioavailable for critical body processes once it is administered.

It has been demonstrated to be safe and well-tolerated, with a safety profile similar to placebo in clinical trials.

Iron deficiency can develop into a serious medical condition that is often overlooked and undertreated in several illnesses.

It is a common comorbidity in many disease states, such as end-stage kidney disease, chronic kidney disease, acute

heart failure, cancer and multiple chronic gastrointestinal conditions.

Iron deficiency impacts patients’ health in many ways, including anemia, organ dysfunction, slower recovery, diminished energy and reduced quality of life.

We are the second largest supplier of hemodialysis concentrates in the United States, with a reputation for excellent service, quality, and reliability.

We believe this reputation, which is based on over 25 years of service to kidney dialysis centers, combined with approximately $60 million in annual revenue, approximately 300 dedicated employees, expertise in manufacturing and logistics and the added expertise in pharmaceutical development and commercialization brought to the Company by recent additions to our management team, gives us a solid foundation on which to grow.

Dialysis Business:

We are one of the two major suppliers of hemodialysis concentrates in the United States.

Over the past 25 years we have developed a core expertise in manufacturing and delivering hemodialysis concentrates.

Over the past 25 years we developed a core expertise in manufacturing and delivering hemodialysis concentrates.

Because these concentrates are used to maintain human life by removing toxins and balancing electrolytes in the dialysis patient’s bloodstream, we manufacture them under cGMP regulations as described below.

2 unchanged sentences

We employ approximately 300 people in the concentrates unit of our dialysis business.

The “Rockwell Medical” name has earned a reputation for dependability, quality and service within our customer base.

This reputation was further strengthened during the recent challenges presented, not only by the COVID-19 pandemic, but also by the multitude of recent natural disasters where our team has been challenged by hurricanes, flooding and freezing, while still meeting production demands.

Our dialysis business in concentrates and our growth opportunities with FPC technology are synergistic.

We are leveraging our leadership position in the dialysis sector to commercialize our first two FPC-based products, Triferic and Triferic AVNU, which are indicated for the replacement of iron to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease.

We commercialize the Triferic products ourselves in the United States, and are partnering with established local pharmaceutical companies for the regulatory approval and commercialization outside of the United States.

Although we have an excellent reputation for dependability and service within the dialysis sector, with concentrates and Triferic, our growth opportunities for both in the US dialysis market are challenged by the consolidated ownership of dialysis clinics, a capitated reimbursement model and the demographics of the patient population.

We believe that the Company has earned a reputation for dependability, quality and service within our customer base.

This reputation was further strengthened during the recent challenges presented, not only by the COVID-19 pandemic, but also by supply chain disruptions due to recent natural disasters, in which our team has been challenged by hurricanes, flooding and freezing, while still meeting production demands.

During the recent shortage in dialysis concentrates, the Company was able to fill the supply gaps for many clinics because they had not received deliveries of certain products from other suppliers.

We believe that our dialysis business in concentrates and our opportunities with FPC technology are synergistic.

We scaled back our commercial organization in 2021, but we are working to maintain our current customer base in the United States while we seek a commercialization partner.

We are also seeking to partner with established local and regional pharmaceutical companies for regulatory approval and commercialization in markets outside of the United States.

Despite our market position, we believe that our growth opportunities for our concentrates business and Triferic in the US dialysis market are challenged by the consolidated ownership of dialysis clinics, a capitated reimbursement model and the demographics of the dialysis patient population.

The two largest dialysis organizations treat approximately 72% of the patients in the United States.

One manufactures its own concentrates and IV iron and we already supply concentrates to the other.

Through our partnership with Baxter International, we currently supply concentrates to a significant percentage of the small and medium sized dialysis organizations.

In a sector, such as kidney dialysis, with capitated reimbursement for the dialysis procedure and all included inputs, new product success depends on compelling data demonstrating improved patient outcomes and/or pharmacoeconomics versus the current standard of care in practice in the clinics.

Once Medicare determined that Triferic and Triferic AVNU would be reimbursed under the fixed bundled rate, market adoption became more dependent on the generation of these data, which were not required for the drug's approval from the FDA.

Notwithstanding the growth limitations mentioned above, we have made progress and continue to be confident that Triferic has the potential to be the treatment of choice for the maintenance of hemoglobin in dialysis patients.

Toward this end, we have increased our efforts in generating real world data in clinics with current protocols, which we believe will help with the adoption of Triferic and Triferic AVNU as these results are developed and disseminated over time.

In addition, we believe the hemodialysis industry may experience a great deal of change over the next several years.

We plan to take the steps necessary to generate the data necessary to potentially allow Triferic and Triferic AVNU to benefit from these new innovations, such as the potential approval of a class of drugs, known as hypoxia-inducible factor prolyl hydroxylase inhibitors ("HIF-PHIs"), as well as the new, solid-state dialysis equipment in development.

We plan to study Triferic in combination with these potential new innovations as they become available.

A key element of our dialysis business strategy is to also improve the strength of our concentrates business by creating efficiencies and enhancing our manufacturing and transportation operations.

We have launched projects to identify ways to improve the overall profitability of these core operations.

Specifically, we are reviewing our entire supply chain to identify opportunities for improvement, prioritizing initiatives that will have the largest impact on long-term efficiency, profitability and growth.

One manufactures its own concentrates and IV iron, and we have an existing agreement to supply concentrates to the other.

Through our partnership with Baxter Healthcare Corporation, a subsidiary of Baxter International, Inc.

("Baxter"),we currently supply concentrates to a significant percentage of the small and medium sized independent dialysis organizations.

In a sector like kidney dialysis, with capitated reimbursement for the dialysis procedure and all included inputs, new product success depends on compelling data demonstrating improved patient outcomes and/or pharmacoeconomics versus the current standard of care in practice in the clinics.

Once Medicare determined that Triferic and Triferic AVNU would be reimbursed under the fixed bundled rate for dialysis treatment, market adoption became more dependent on the generation of these data, which were not required for the drug's approval by the FDA.

Notwithstanding the growth limitations mentioned above, we continue to believe that Triferic has the potential to be an important option for the maintenance of hemoglobin in dialysis patients.

To this end, we have continued our efforts in generating real world data in clinics with current protocols, which we believe will help with the adoption of Triferic and Triferic AVNU as these results are developed and disseminated over time.

In addition, we are seeking a partner to help us further commercialize Triferic.

A key element of our dialysis business strategy is to also improve the strength of our concentrates business by creating efficiencies and enhancing our manufacturing and transportation operations and to fully recoup manufacturing and shipping expenses so that this business has the potential to be profitable.

To date, our concentrates business has operated at a loss, with the loss accelerating recently as inflationary pressures have increased our manufacturing and operating costs, while we have limited ability to pass these costs along to certain customers.

We have undertaken discussions with our largest customers to renegotiate our existing supply contracts in an effort to improve the profitability of this business line.

On April 6, 2022, we entered into a strategic arrangement with our long-time partner, DaVita, Inc.

("DaVita"), a leading provider of kidney care, to

allow the Company to stabilize its concentrates business.

The strategic intent of this agreement is to make sure Rockwell Medical is on stable financial footing because it is one of the two major suppliers of dialysis concentrates in the U.S.

The amended agreement provides a stronger financial arrangement, encompassing pricing, cost sharing and joint efforts in supply chain improvement and cost cutting, with the goal of having the Company’s concentrates business operate profitably in the future.

In addition to the amended agreement, DaVita entered into an agreement pursuant to which it will invest up to $15 million in preferred stock in two equal tranches.

The first tranche of $7.5 million was funded on April 7, 2022.

The second $7.5 million tranche is to be funded subject to the Company raising $15 million additional capital by June 30, 2022.

We are also in discussions with our other major customer to renegotiate certain terms of that agreement.

In addition, we are reviewing our entire supply chain to identify opportunities for improvement, prioritizing initiatives that will have the largest impact on long-term efficiency, profitability and growth.

Home Infusion:

Our accelerated growth strategy is to go beyond our foundational business in dialysis by leveraging the efficacy and safety data from Triferic.

We are planning to develop an FPC-based therapeutic for iron deficiency to be given in the home infusion setting.

The number of patients served by home infusion therapy has grown from approximately 800,000 in 2010 to over 3,000,000 in 2019.

The home infusion setting is expected to continue this rapid expansion, which has been further supported in the COVID-19 environment.

Our strategy is to go beyond our foundational business in dialysis by leveraging the efficacy and safety data from Triferic in new therapeutic settings.

Subject to having sufficient capital resources, we are planning to develop an FPC-based therapeutic for iron deficiency to be delivered in the home infusion setting.

The number of patients served by home infusion therapy grew from approximately 800,000 in 2010 to over 3,000,000 in 2019.

The home infusion setting is expected to continue this rapid expansion, which has been accelerated by the COVID-19 environment.

Many patient groups requiring home infusion therapies suffer from diseases that are associated with an incidence of iron deficiency and anemia.

For example, it is estimated that 40%-55% of all home parenteral nutrition patients are iron deficient (see Market Opportunity below).

We believe, based on our data with hemodialysis patients, FPC as a home infusion therapy for iron deficiency anemia may have distinct advantages over currently available iron replacement therapy options (see Platform Technology below).

Based on feedback received in March 2021 from the FDA, we plan on initiating a Phase 2 clinical study in home infusion patients with iron deficient anemia during the second half of 2021 to confirm the dose and duration of FPC treatment.

We expect data from the trial in the second half of 2022 (see Clinical Pipeline below).

For example, it is estimated that 40%-55% of all home parenteral nutrition patients are iron deficient.

We believe, based on our data from hemodialysis patients, FPC as a home infusion therapy for iron deficiency anemia may have distinct advantages over currently available iron replacement therapy options (see Platform Technology below).

Based on further feedback received in December 2021 from the FDA, we have made plans to initiate a Phase 2 clinical study in home infusion patients with iron deficient anemia to confirm the dose and duration of FPC treatment.

We expect to commence this study in 2022, subject to having sufficient working capital to fund this study, and would expect to have top-line data from the trial approximately 12-18 months following commencement of the study (see Clinical Pipeline below).

Pipeline Development

5 unchanged sentences

If so, these outcomes would translate into a meaningful reduction in healthcare costs and human suffering.

We expect to communicate with the FDA in 2021 regarding a development pathway for this indication.

We continue exploring other potential patient populations for application of our technology.

We are considering disease states where patients can benefit the most from an effective treatment for iron deficiency, and where the development path, cost estimates and reimbursement are the most favorable.

Platform Technology - Ferric Pyrophosphate Citrate

3 unchanged sentences

All components of FPC are normal constituents in the blood.

Importantly, FPC has already been shown to be efficacious in clinical trials and is well-tolerated with over one million doses administered to date.

Importantly, FPC has already been shown to be efficacious in clinical trials and is well-tolerated with over 1.6 million doses administered to date.

The first two formulations based upon the FPC platform received approval for the replacement of iron to maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease ("HDD-CKD").

18 unchanged sentences

FPC has demonstrated an excellent safety profile.

No reported instances of anaphylaxis or other serious adverse events have been received during more than 1.2 million doses administered.

No reported instances of anaphylaxis or hypersensitivity events have been received during more than 1.2 million doses administered.

Triferic may be administered even to patients with history of allergic reactions to IV iron.

We are actively evaluating additional indications for potential development (see "Pipeline" below).

We currently commercialize Triferic, Triferic AVNU and our dialysis concentrates portfolio of products.

We partner with Baxter Healthcare Corporation, a subsidiary of Baxter International, Inc.

("Baxter"), for commercialization of our concentrates products in the United States and certain other countries.

We currently sell Triferic, Triferic AVNU and our dialysis concentrates portfolio of products.

We partner with Baxter for commercialization of our concentrates products in the United States and certain other countries.

We partner with Nipro Medical Corporation for our concentrate products in certain countries not included in our Baxter agreement, as described below.

5 unchanged sentences

As one of the two major suppliers in the United States, our dialysis concentrate products are used to maintain human life by removing toxins and replacing critical nutrients in the dialysis patient’s bloodstream.

In 2020, we estimate that we supplied approximately 27% of the United States domestic market with dialysis concentrates, with the majority of our sales are being made in the United States.

In 2021, we estimate that we supplied approximately 27% of the United States domestic market with dialysis concentrates, with the majority of our sales in the United States.

We also supply dialysis concentrates to distributors serving a number of foreign countries, primarily in the Americas and the Pacific Rim.

19 unchanged sentences

Ancillary Products

We offer certain ancillary products to selected customers including cleaning agents, 6% bleach for disinfection, citric and descale, filtration salts and other supplies used by hemodialysis providers.

We offer 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.

Our Triferic Portfolio

Triferic - The First and Only FDA-Approved Therapy to Replace Iron and Maintain Hemoglobin.

Triferic (dialysate) and Triferic AVNU (IV) are currently the only FDA-approved therapies indicated to replace iron and maintain hemoglobin in adult hemodialysis patients.

7 unchanged sentences

Hemodialysis-related blood loss averages about 1g to 1.5g of elemental iron annually, not taking into consideration possible blood losses from dialyzer clotting or bleeding from surgical procedures related to vascular access.

We believe Triferic addresses an important unmet need in the treatment of ongoing iron losses and anemia in ESKD patients.

We believe Triferic addresses an important medical need in the treatment of ongoing iron losses and anemia in ESKD patients.

Triferic’s unique mode-of-action (see “Platform Technology” above) distinguishes it from traditional macromolecular IV iron because Triferic donates iron to transferrin, immediately, and completely, as soon as it enters the blood, providing immediately bioavailable iron to the body.

The iron bound to transferrin is transported to the bone marrow to facility the body’s manufacture of hemoglobin.

The iron bound to transferrin is transported to the bone marrow to facilitate the body’s manufacture of hemoglobin.

Triferic delivers approximately 5 mg to 7 mg of iron to the bone marrow with every hemodialysis treatment and maintains hemoglobin without increasing iron stores (ferritin).

2 unchanged sentences

We believe that Triferic, due to its unique mechanism of action, facilitates both potential clinical and cost-saving benefits.

Triferic is an innovative iron therapy that replaces the ongoing iron losses that routinely occur in the vast majority of hemodialysis patients.

Our first formulation of the drug is delivered via the dialysate, which is an innovative mode of delivery that we believe adds a convenience factor for the dialysis units.

Triferic is an innovative iron therapy that replaces the ongoing iron losses routinely occurring in the vast majority of hemodialysis patients.

Our first formulation of the drug is delivered via the dialysate, which is an innovative mode of delivery we believe that adds a convenience factor for the dialysis units.

The first presentation of Triferic (dialysate) is a liquid, single-patient dose, which was approved by the FDA in 2015.

1 unchanged sentence

We built a commercial organization for our Triferic products and launched both Triferic products in the United States in May 2019.

CRUISE Studies

In 2013, we successfully completed two pivotal Phase 3 efficacy trials, called CRUISE-1 and CRUISE-2, for Triferic.

The CRUISE studies were identical single-blind, placebo controlled, parallel group, multi-center studies comparing Triferic delivered via hemodialysis bicarbonate concentrate to a placebo group receiving standard hemodialysis solution, with approximately 600 subjects split evenly between the two studies and treatment arms.

Oral or IV iron supplementation was

withheld, and ESA doses were held constant.

Both CRUISE studies successfully met their primary endpoint, demonstrating a statistically significant difference in hemoglobin concentrations between the placebo group and Triferic.

Triferic also met key secondary endpoints including maintenance of hemoglobin, maintenance of reticulocyte hemoglobin and increase in serum iron pre-to-post treatment without an increase in ferritin.

A supportive clinical trial, called the PRIME study, demonstrated that Triferic (dialysate) significantly reduced the need for ESA and IV iron during dialysis compared to the placebo arm dialyzed using conventional dialysate.

The PRIME study was a nine-month, prospective, randomized, placebo-controlled, double-blinded, multi-center study in the United States that randomized patients equally to dialysate containing Triferic versus conventional dialysate.

A total of 103 patients received the blinded study drug (52 Triferic and 51 placebo).

A blinded central anemia management group facilitated ESA dose adjustments, and IV iron was administered according to the approved indication and product labeling when ferritin levels fell below 200 µg/L.

Both groups successfully kept their hemoglobin concentrations within the target range.

At the end of treatment, there was a significant 35% reduction in prescribed ESA dose in patients treated with Triferic compared with the placebo patients.

In a subgroup of ESA hypo-responsive patients—those on more than 13,000 units of epoetin per week—patients needed 74% less ESA in the Triferic group compared to the placebo group at the end of treatment.

According to data from Dialysis Outcomes and Practice Patterns Study, a study of hemodialysis practices in the United States, hypo-responsive patients, as defined in the PRIME study, represent more than 20% of the dialysis population.

Finally, overall patients treated with Triferic in this study used 51% less IV iron than those treated with the placebo.

In January 2014, we completed our long-term safety study for Triferic which was a prospective, randomized, double-blinded, placebo-controlled, crossover, multicenter, multinational, Phase 3 study with an enrollment of 718 hemodialysis patients in the United States and Canada.

This large-scale long-term safety study, coupled with the successful Phase 3 CRUISE studies, dosed over 100,000 Triferic administrations and demonstrated a safety profile similar to placebo.

We scaled back our commercial organization in 2021, but we are working to maintain our current customer base in the United States while we seek a commercialization partner.

Reimbursement

Triferic (dialysate) received a reimbursement J-code on January 1, 2016 from the Centers for Medicare & Medicaid Services (“CMS”), providing that it would be reimbursed for administration to dialysis patients within the existing fixed-price “bundle” of payments that CMS provides to dialysis providers.

In June 2018, the Company determined, based on feedback provided from CMS’s Innovation Center (“CMMI”), that Triferic (dialysate) was unlikely to obtain add-on reimbursement in the near term.

In June 2018, the Company determined, based on feedback

provided from CMS’s Innovation Center (“CMMI”), that Triferic (dialysate) was unlikely to obtain add-on reimbursement in the near term.

As a result, the Company changed its commercialization strategy to plan for the commercial launch of Triferic (dialysate) with reimbursement within the bundle of payments to dialysis providers, while continuing to develop Triferic AVNU (IV).

2 unchanged sentences

We also developed Triferic AVNU, an IV formulation of Triferic, for use by hemodialysis patients in the United States as well as international markets.

Triferic AVNU was developed pursuant to a Special Protocol Assessment (“SPA”) with the FDA.

As part of the SPA, the FDA agreed that an equivalence approach would be acceptable for Triferic AVNU.

As a result, rather than conducting additional safety and efficacy trials, the FDA agreed that our NDA would be acceptable, if we were able to show equivalence between Triferic AVNU and Triferic (dialysate) by comparing pharmacokinetic (“PK”) parameters of total iron and transferrin-bound iron of Triferic AVNU to Triferic (dialysate).

The formal equivalence study was completed during 2018, and Triferic AVNU met bioequivalence criteria compared with Triferic (dialysate).

Triferic AVNU was approved by the FDA on March 27, 2020.

The approval and commercial availability of Triferic AVNU is an important advance for the portfolio given that Triferic AVNU can be administered to any hemodialysis patient regardless of the type of bicarbonate technology, or machine technology including hemodiafiltration, used.

Triferic AVNU can be administered to any hemodialysis patient regardless of the type of bicarbonate technology, or machine technology including hemodiafiltration, used.

Use of Triferic (dialysate) is limited to clinics that use a central loop or liquid jugs to deliver bicarbonate.

However, Triferic AVNU must be delivered at every dialysis session via slow IV infusion, over 3-4 hours, which may be logistically challenging for some clinics.

In November 2018, CMS issued interpretive guidance on the availability of Medicare reimbursement for certain products indicated to treat renal disease.

Under this guidance, Triferic (dialysate) is ineligible for add-on reimbursement under the CMS Transitional Drug Add On Pricing Adjustment (“TDAPA”) program.

However, based on that guidance, we believed that Triferic AVNU would remain eligible for add-on reimbursement, so long as it was approved by the FDA on or after

January 1, 2020.

In October 2019, CMS revised its guidance to significantly limit the eligibility of new products for TDAPA to only certain NDA types, as classified by the FDA.

Based on the guidance issued by CMS in 2019, Triferic AVNU is not eligible for add-on reimbursement and will be reimbursed within the “bundle,” as with Triferic (dialysate).

We are also continuing to research other presentations of, and delivery methodologies for, Triferic for potential application in ESKD patients within the dialysis sector in an effort to maximize the commercial potential of Triferic.

Furthermore, we intend to initiate clinical studies that would assess Triferic with new prolyl hydroxylase inhibitors in the clinical setting (See Clinical Development and R&D below).

Once a new prolyl hydroxylase inhibitor is available for use, we expect to initiate a study of Triferic to maintain hemoglobin levels.

Triferic AVNU is not eligible for add-on reimbursement and is reimbursed within the “bundle,” as with Triferic (dialysate).

MARKETING, SALES AND INTERNATIONAL

Market Opportunity

The United States hemodialysis market is currently the largest market in the world for dialysis products.

As of 2018, there were an estimated 551,000 hemodialysis patients.

The United States dialysis market is currently the largest market in the world for dialysis products.

As of the end of 2019, there were an estimated 566,600 patients treated with some form of dialysis.

Hemodialysis is the primary treatment modality for ESKD employed in the United States, with approximately 87% of all dialysis patients receiving in-center hemodialysis.

There were an estimated 485,000 in-center hemodialysis patients in the United States, representing approximately 73 million treatments annually.

We do not currently compete in the other two segments, peritoneal, representing approximately 10% of the total patients, or home dialysis, representing approximately 2% of the total patients.

There were an estimated 492,000 in-center hemodialysis patients in the United States in 2019, representing approximately 74 million treatments annually.

We do not currently compete in the other two segments, peritoneal dialysis, representing approximately 11% of the total patients, or home dialysis, representing approximately 2% of the total patients.

Hemodialysis treatments are primarily performed in freestanding clinics and in some hospitals.

LDO = Large Dialysis Organization MDO = Mid-sized Dialysis Organization SDO = Small Dialysis Organization

Based on a global market study published by a major dialysis products manufacturer, the global ESKD population receiving some form of treatment was estimated to be over 3.2 million patients at the end of 2017 with the overall global patient population growing approximately 6% annually.

Data from USRDS and the European Renal Association indicates that there are

more than two million patients undergoing hemodialysis globally.

According to international data collected by the United States Renal Data System ("USRDS"), the global ESKD population receiving some form of treatment was estimated to be approximately 2.7 million patients at the end of 2019 with an average yearly growth rate over the previous 10 years of 7.4%.

Data from USRDS and the European Renal Association indicates that there are more than two million patients undergoing hemodialysis globally.

According to the National Kidney Foundation, 10% of the worldwide population is affected by chronic kidney disease and millions die each year because they do not have access to affordable treatments.

We have observed that the ESKD patient population in the United States has grown steadily over the past several decades and we expect the United States dialysis population to grow approximately 3% annually over the next several years.

The Asia-Pacific market is projected to experience rapid growth in both the incidence of kidney disease and total treatment in the ESKD population over the next decade.

We have observed that the prevalent ESKD patient population in the United States has grown steadily over the past several decades, with an average yearly growth rate of >3% from 2009 - 2019.

Growth rates slowed in 2020 and 2021 due to an increase in deaths associated with the COVID-19 pandemic, however we expect a more typical growth rate of approximately 3% per year to resume in 2022 and persist over the next several years.

The Asia-Pacific region is projected to experience rapid growth in both the incidence of kidney disease and total treatment in the ESKD population over the next decade.

One common side-effect of dialysis treatments is iron deficiency anemia.

The great majority of hemodialysis patients receive dialysis treatment three times per week, or approximately 153 times per year.

Most patients have their dialysis treatment performed at a free-standing clinic for permanent loss of kidney function.

These are commonly referred to as “chronic” patients.

Patients that have their treatment performed at hospitals for temporary loss of kidney function are typically referred to as “acute” patients.

The small percentage of chronic patients that receives their treatment at home are referred to as “home” dialysis patients.

The majority of hemodialysis patients receive dialysis treatment three times per week, or approximately 153 times per year.

Most patients who have their dialysis treatment performed at a free-standing clinic have permanent loss of kidney function.

These are commonly referred to as “chronic” dialysis patients.

Patients that undergo dialysis in hospitals for temporary loss of kidney function are typically referred to as “acute” dialysis patients.

The small percentage of chronic dialysis patients that receives their treatment at home are referred to as “home” dialysis patients.

In each setting, a dialysis machine dilutes concentrated solution, such as Rockwell’s concentrate products, with purified water.

11 unchanged sentences

HDD-CKD patients have abnormalities in iron metabolism caused by ongoing blood loss during the hemodialysis treatment, repeated blood draws to follow laboratory parameters and a limited diet.

Furthermore, absorption of iron from the diet and mobilization from body stores is reduced due to increases in a peptide called hepcidin.

Furthermore, absorption of iron from the

diet and mobilization from body stores is reduced due to increases in a peptide called hepcidin.

Hepcidin is the master regulator of iron uptake and distribution and is elevated in patients with inflammation, such as ESKD patients on dialysis.

13 unchanged sentences

Since macromolecular IV iron has been the only therapy available for hemodialysis patients for over 30 years, it has been commonly used off-label in hemodialysis patients in a proactive manner for maintaining iron balance and preventing the development of iron deficient state.

When iron-carbohydrate complexes are administered intravenously to hemodialysis

patients, a significant portion of the iron is sequestered, therefore, the dose needed to deliver sufficient iron to the bone marrow far exceeds the amount of iron lost, causing progressive and cumulative tissue iron overload with concomitant elevation of serum ferritin levels.

In summary, we believe that cumulative tissue iron overload caused by high doses of macromolecular IV iron over time may lead to complications such as infections and cardiovascular disease, which are potentially hazardous to patients’ long-term health.

Furthermore, the carbohydrate moiety in IV iron complexes is thought to be responsible for anaphylactic reactions occasionally seen in IV iron complexes.

HIF-PHI Opportunity

A class of drugs, known as hypoxia-inducible factor prolyl hydroxylase inhibitors ("HIF-PHIs"), are in development for a variety of indications, including the treatment of anemia for patients with chronic kidney disease.

HIF-PHIs are designed to stimulate erythropoiesis and manage iron utilization, and can be administered orally.

Certain HIF-PHI compounds, including roxadustat and vadadustat, have reached or completed Phase 3 development in the United States, and an NDA for roxadustat was submitted in the United States in December 2019 and remains pending FDA review.

If approved, HIF-PHIs could potentially offer a more convenient alternative to injectable ESAs for treatment of anemia in CKD patients, while potentially increasing iron availability for hemoglobin synthesis.

Based on published presentations of data from a roxadustat trial, we believe the introduction of HIF-PHIs may be an opportunity for us to establish Triferic as a preferred therapy for iron replacement with this new class of drugs.

Based on our understanding of the trial, Triferic given at each dialysis could be sufficient for the iron needs of the average roxadustat dialysis patient (see Clinical Pipeline below for more information on our study plans).

When iron-carbohydrate complexes are administered intravenously to hemodialysis patients, a significant portion of the iron is sequestered, therefore, the dose needed to deliver sufficient iron to the bone marrow far exceeds the amount of iron lost, causing progressive and cumulative tissue iron overload with concomitant elevation of serum ferritin levels.

In summary, we believe that cumulative iron overload in tissues caused by high doses of macromolecular IV iron over time may lead to complications and introduce risk to a dialysis patient's long-term health.

Furthermore, the carbohydrate moiety in IV iron complexes is thought to be responsible for anaphylactic reactions occasionally seen with clinical use.

Home Infusion

3 unchanged sentences

Many patient groups requiring home infusion therapies suffer from chronic diseases that are associated with a risk of iron deficiency and anemia.

As an example, one group in particular at high risk for developing iron deficiency anemia (“IDA”) is patients who require parenteral nutrition.

As an example, one group in particular at high risk for developing iron deficiency anemia (“IDA”) is patients who require parenteral nutrition (food or supplements delivered through a “feeding tube” or via intravenous delivery).

It is estimated that 40-55% of all patients on parenteral nutrition are iron deficient.

4 unchanged sentences

Diseases commonly requiring infusion therapy include infections that are unresponsive to oral antibiotics, cancer and cancer-related pain, dehydration, gastrointestinal diseases or disorders which prevent normal functioning of the gastrointestinal system, and more.

A recent National Home Infusion Association (NHIA) study found that in 2019 home infusion and specialty providers cared for more than 3 million patients in the United States, representing a 300% increase since the last industry study in 2008.

A recent National Home Infusion Foundation ("NHIF") report found that in 2019 home infusion and specialty providers cared for more than 3 million patients in the United States, representing a 300% increase since the last industry study in 2008.

Until the 1980s, patients receiving infusion therapy had to remain in the inpatient setting for the duration of their therapy, which often lasted for several hours.

5 unchanged sentences

For many patients, receiving treatment at home or in an outpatient infusion suite setting is preferable to inpatient care.

A thorough patient assessment and home assessment are performed before initiating infusion therapy at home to ensure that the patient is an appropriate candidate for home care (Source:

A thorough patient assessment and home assessment are performed before initiating infusion therapy at home to ensure the patient is an appropriate candidate for home care (Source:

www.nhia.org).

4 unchanged sentences

In addition to these factors, COVID-19 and its impact has accelerated existing trends.

We believe the home infusion sector will continue to grow in the future.

Growth will be driven by:

(1) high rates of patient demand, and satisfaction with services, (2) site of care optimization programs driving by commercial payers, (3) legislation to expand coverage for Medicare beneficiaries and (4) a robust pipeline of specialty IV treatments.

We believe the home infusion sector will continue to grow in the future, driven by:

(1) high rates of patient demand, and satisfaction with services, (2) site of care optimization programs driven by commercial payers, (3) legislation to expand coverage for Medicare beneficiaries and (4) a robust pipeline of specialty IV treatments.

Iron Deficiency Anemia In Home Infusion

IDA is a common comorbidity for many different types of patients with diseases that are treated with home infusion therapy.

The following home infusion therapies are provided to patients for the treatment of diseases that may be associated with a risk of iron deficiency anemia.

Applicability of FPC will depend on length of therapy, prevalence of iron deficiency, and acceptability of alternative therapies such as traditional IV iron loading or oral iron.

NHIA Infusion Industry Trends Report 2020.

Hwa YL, Rashtak S, Kelly DG, and Murray JA.

Iron deficiency in long-term parenteral nutrition therapy.

Busti E, et al.

Anemia and iron deficiency in cancer patients.

Role of iron replacement therapy.

Pharmaceuticals 2018, 11, 94

Beale A, et al.

Iron Deficiency in Acute Decompensated Heart Failure.

2019, 8, 1569.

Kaitha S, et al.

Iron deficiency anemia in inflammatory bowel disease.

World J Gastrointest Pathophysiol.

von Haehling S, et al.

Iron Deficiency in Heart Failure.

It is recommended that patients receiving home parenteral nutrition be screened regularly for anemia.

7 unchanged sentences

For home parenteral nutrition (“HPN”) patients specifically, there is a significant opportunity for FPC for home infusion and an unmet need for effective proactive iron maintenance therapy.

There are approximately 113,000 HPN patients annually, of which 83,000 patients require short-term care (averaging 45 days) and 30,000 patients require long-term care.

The NHIF estimates there are approximately 113,000 HPN patients annually, of which 83,000 patients require short-term care (averaging 45 days) and 30,000 patients require long-term care.

An estimated 36% to 55% of such patients are iron deficient and the majority of patients have a negative iron balance due to low/no dietary iron absorption and inflammation.

The current treatment for these patients is daily infusions of parenteral nutrition

supplements, which last for 8 to 12 hours per day.

The current treatment for these patients is daily infusions of parenteral nutrition supplements, which last for 8 to 12 hours per day.

Traditional parenteral iron is infrequently used due to risk of hypersensitivity and concerns regarding incompatibility with lipids.

Oral iron is also considered to be inadequate due to patient inability to absorb.

Oral iron is also considered to be inadequate due to patient inability to absorb or unwanted side effects.

We believe that the inadequacy and burden of current treatments presents an opportunity for our FPC pipeline.

We believe FPC is uniquely suited for use as a home infusion therapy:

We believe FPC may be suited for use as a home infusion therapy:

• Home infusion clinicians are hesitant to recommend macromolecular IV iron supplementation at home due to the potential for severe hypersensitivity risk - however rare.

FPC has been demonstrated to have a safety profile similar to placebo in prospective randomized clinical trials.

FPC has been demonstrated to have a safety profile similar to placebo in prospective randomized clinical trials in hemodialysis patients.

• Treatment with loading doses of traditional IV iron therapy can temporarily address iron deficiency, but iron deficiency may persist due to inflammation.

9 unchanged sentences

In August 2019, we signed a new Products Purchase Agreement (the "Products Purchase Agreement") with DaVita.

The Products Purchase Agreement provides for an increase in the product sale prices relative to the prices charged for products under the previous agreement with DaVita.

In March 2020, we entered into a Second Amendment to the Exclusive Distribution Agreement with Baxter (the “Second Amendment”).

The Second Amendment provides for, among other things, a commitment by Rockwell to maintain a specified manufacturing capacity for Baxter, a cap upon the net amount of reimbursable transportation expenses and modified extension terms.

The Products Purchase Agreement with DaVita provided for an increase in the product sale prices relative to the prices charged for products under the previous agreement with DaVita.

On April 6, 2022, we entered into an amendment to the Products Purchase Agreement under which we agreed to a price increase, effective May 1, 2022, as well as the pass-through of certain costs, determined on a quarterly basis.

Certain costs are subject to a cap.

The Amendment will provide us with the potential to operate the concentrates business profitably in the future, subject to cost containment activities to be undertaken by the Company.

We also supply dialysis concentrates to distributors serving a number of foreign countries, primarily in the Americas and the Pacific Rim.

Nipro Medical Corporation is our primary distributor of our dialysis concentrates in certain countries in Latin America that are not covered under the Baxter Distribution Agreement.

Nipro Medical Corporation is our primary distributor of our dialysis concentrates in certain countries in Latin America that are not covered under the Distribution Agreement.

Dialysate concentrates accounted for approximately 98.3% of our 2021 revenue.

3 unchanged sentences

The dialysis provider market is considerably consolidated, with the top 10 provider organizations treating approximately 90% of in-center hemodialysis patients.

We market and sell Triferic (dialysate), Triferic AVNU directly to these medium-sized, and independent dialysis chains.

We market and sell Triferic (dialysate),

Triferic AVNU directly to these medium-sized, and independent dialysis chains and are currently searching for a commercial partner within the United States to continue the commercialization these products into the market.

Triferic (dialysate).

We have assembled a sales and marketing leadership team and a field-based sales team to support the commercialization of Triferic (dialysate) in the United States.

The team consists of sales and marketing leaders who have extensive experience selling and marketing products within the ESKD marketplace.

This leadership is supported by experienced sales representatives responsible for effectively promoting the product within the United States and clinical nurse educators and medical science liaisons responsible for supporting the integration of Triferic (dialysate) and Triferic AVNU into United States dialysis clinics.

We believe this sales force is appropriately sized for marketing Triferic to the nephrology community within the United States.

Our initial target customers include selected medium and small sized dialysis chains and independent dialysis centers.

The launch of Triferic (dialysate) has enabled us to engage with key customers in the dialysis industry regarding the potential

clinical and pharmacoeconomic benefits of Triferic and is providing us with valuable experience to support our future commercial and medical initiatives.

We significantly scaled back our field-based sales team that supported the commercialization of Triferic (dialysate) in the United States in August 2021.

Our initial target customers included selected medium and small sized dialysis chains and independent dialysis centers.

The launch of Triferic (dialysate) enabled us to engage with key customers in the dialysis industry regarding the potential clinical and pharmacoeconomic benefits of Triferic and is providing us with valuable experience to support our future commercial and medical initiatives.

Triferic AVNU (IV) .

3 unchanged sentences

The kidney dialysis market in the U.S.

is a concentrated market, where two companies service 73% of the patients.

The dialysis procedure, including all inputs, is reimbursed under capitated reimbursement, which means it is a fixed price.

is a concentrated market, where two companies service approximately 74% of the patients.

The dialysis procedure, including all inputs, is reimbursed under capitated reimbursement model at a fixed rate.

This means any new product success depends on compelling data demonstrating improved patient outcomes and/or pharmacoeconomics versus the current standard of care in practice in the clinics.

Once it was determined by Medicare that Triferic would be reimbursed under the fixed bundled rate, market adoption became dependent on the generation of these data, which were not required for approval from the FDA.

We have made progress and continue to be confident that Triferic has the potential to be the treatment of choice for the maintenance of hemoglobin in dialysis patients.

Toward this end, we have increased our efforts in generating real world data in clinics with current protocols, which we believe will help with the adoption of Triferic as these results are created and disseminated over time.

In addition, we believe the hemodialysis industry may experience a great deal of change over the next several years.

We plan to take the steps necessary to generate the data necessary to potentially allow Triferic to benefit from these new innovations, such as the potential approval of a class of drugs, known as hypoxia-inducible factor prolyl hydroxylase inhibitors ("HIF-PHIs"), as well as the new, solid-state equipment in development.

We plan to study Triferic in combination with these potential new innovations as they become available (see Clinical Pipeline below).

We have made progress and continue to be confident that Triferic has the potential to be an important option for the maintenance of hemoglobin in dialysis patients.

To this end, we have increased our efforts in generating real world data in clinics with current protocols, which we believe can help with the adoption of Triferic as these results are created and disseminated over time.

We are also seeking a commercialization partner that can help us market Triferic on a larger scale.

International Dialysis.

Our strategy for growth includes the expansion of Triferic sales outside the United States by licensing it to key partners for development and/or commercialization.

Partnering in these regions allows us to better leverage the development, regulatory, commercial presence and expertise of business partners to accelerate sales of our products throughout the world.

To date, we have established partnerships in China, India, Korea, Canada, Peru and Chile.

Partnering in these regions allows us to better leverage the development, regulatory, commercial presence and expertise of business partners to increase sales of our products throughout the world.

To date, we have established partnerships in China, India, Korea, Turkey, Peru and Chile.

We continue to pursue international licensing opportunities in other countries and regions.

1 unchanged sentence

Wanbang estimates there are almost 600,000 patients receiving hemodialysis in the People’s Republic of China and it is expected to become the largest ESRD market in the world over the next several years.

Wanbang recently enrolled patients in a Phase III trial.

Wanbang is currently enrolled patients in a Phase III trial.

If approved, Wanbang will commence commercialization of Triferic following the regulatory approval (for more information see Clinical Development below).

We have licensed the commercialization rights for Triferic (dialysate) for the Indian market to a wholly-owned subsidiary of Sun Pharmaceutical Industries Ltd.

We have licensed the commercialization rights for Triferic (dialysate) in India to a wholly-owned subsidiary of Sun Pharmaceutical Industries Ltd.

(together, “Sun Pharma”).

1 unchanged sentence

Sun Pharma has submitted the NDA for Triferic in India and is currently working with the Indian Central Drugs Standard Control Organization for the optimal regulatory path for approval of Triferic (dialysate) in India.

A Joint Alliance Committee, comprised of members from the Company and Sun Pharma, will guide the development and execution for Triferic (dialysate) in India.

A Joint Alliance Committee, comprised of members from the Company and Sun Pharma, continues to guide the development and execution for Triferic (dialysate) in India.

Sun Pharma will be responsible for all clinical, regulatory and commercialization activities.

2 unchanged sentences

Jeil has recently submitted the NDA for both Triferic (dialysate) and Triferic AVNU with the goal of being able to commercially launch Triferic (AVNU) in 2022.

We have also executed a distribution agreement to market our Triferic products in Canada with RMC Health Care Inc.

In January 2022, Jeil received approval by the Ministry of Food and Drug Safety (MFDS) of the Republic of Korea for formulations:

Triferic Injection (AVNU) and Triferic Dialysate with the goal of being able to commercially launch Triferic AVNU in 2022.

In 2021 Drogsan Pharmaceuticals, a leading pharmaceutical company in Turkey, entered into an exclusive license agreement with Rockwell Medical for the rights to commercialize Triferic AVNU in Turkey.

The agreement also allows for Drogsan to negotiate further geographic expansion into the surrounding region.

Drogsan submitted their application for Triferic AVNU in January 2022.

We filed for regulatory approval of Triferic AVNU (IV) in May of 2020, and if approved and granted favorable placement on both national and providence formularies, we would be entitled to receive a transfer price based on our partner’s sales price in Canada.

It is estimated that approximately 17,000 patients are receiving hemodialysis in Canada.

In 2021 we terminated our distribution agreement with our commercial partner in Canada.

We are now seeking a new commercialization partner in that market.

In 2017, we licensed the liquid formulation of Triferic (dialysate) to Quimica Europea in Peru.

5 unchanged sentences

Concentrates:

In territories that are not governed under our agreement with Baxter, our primary distributor is Nipro Medical Corporation which distributes our concentrates products within the LATAM region;

however, we also sell through independent sales agents, distributors and direct.

In territories that are not governed under our agreement with Baxter, our primary distributor is Nipro Medical Corporation which distributes our concentrates products within the Latin American region;

however, we also sell through distributors and directly to dialysis clinics.

We currently operate 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.

2 unchanged sentences

In August 2019, we signed a new Products Purchase Agreement with DaVita, with an initial term expiring on December 31, 2023.

Certain costs are subject to a cap.

The Amendment will provide us with the potential to operate the concentrates business profitably in the future, subject to cost containment activities to be undertaken by the Company.

In October 2014, we 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 our concentrate products in the United States, a commitment by Rockwell to maintain a specified manufacturing capacity for Baxter, a cap upon the net amount of reimbursable transportation expenses and modified extension terms.

Our domestic customer contracts for the supply of dialysis concentrate products that permitted assignment to Baxter without consent have been assigned to Baxter.

As a result, for 2020 and 2019, our direct sales to Baxter aggregated approximately 25% and 27% of sales, respectively, and we had a receivable from Baxter of $1.6 million and $2.0 million as of December 31, 2020 and 2019, respectively.

Our domestic customer contracts for the supply of dialysis concentrate

products that permitted assignment to Baxter without consent were assigned to Baxter.

As a result, for 2021 and 2020, our direct sales to Baxter aggregated approximately 26% and 25% of sales, respectively, and we had accounts receivable from Baxter of $3.5 million and $1.6 million as of December 31, 2021 and 2020, respectively.

Another customer, Nipro Medical Corporation, accounted for 8% and 7% of our sales in 2021 and 2020, respectively.

7 unchanged sentences

Dialysis Concentrate Solutions and Dialysis Products Market Competition

In the United States, our principal competitor for concentrate products is Fresenius Medical Care NA (“Fresenius”), a vertically integrated manufacturer and marketer of dialysis devices, drugs and supplies and operator of dialysis clinics, which has substantially greater financial, technical, manufacturing, marketing, and research and development resources than us.

Fresenius, through its Fresenius Kidney Care division, operates approximately 2,600 clinics and treats approximately 37% of the in-center hemodialysis patients in the United States.

5 unchanged sentences

We expect to differentiate Triferic (dialysate) and Triferic AVNU for iron maintenance therapy for hemodialysis patients based on its unique mode of action, clinical benefits, ability to lower treatment cost for providers, ease of administration and excellent safety profile.

Historically, macromolecular IV iron have been used to treat iron deficiency anemia, and currently, the drug Venofer® is generally regarded as having dominant market share in dialysis over other Macromolecular IV iron drug products, such as Sanofi’s Ferrlecit®.

Historically, macromolecular IV iron products have been used to treat iron deficiency anemia, and currently, the drug Venofer® has a dominant market share in dialysis over other macromolecular IV iron drug products, such as Sanofi’s Ferrlecit®.

Venofer® is owned by Switzerland-based Vifor Pharma Management Ltd.

Vifor also markets Ferinject® which is primarily used to treat anemia in a non-dialysis setting.

Vifor also markets Injectafer® which is primarily used to treat anemia in a non-dialysis setting.

Fresenius has a sublicense agreement that allows Fresenius to distribute Venofer® to the dialysis market in the United States and Canada.

Other macromolecular IV iron competitors include Actavis’ generic macromolecular IV iron drug, Nulecit®.

Since macromolecular IV iron products are indicated for repletion therapy and not explicitly for iron maintenance therapy, they are not technically direct competitors to Triferic.

Macromolecular IV iron products are indicated for repletion therapy and not explicitly for iron maintenance therapy.

The molecular structures, modes-of-action and FDA-approved clinical indications are different.

Both therapies are needed to treat dialysis patients, where Triferic is given at every dialysis treatment to maintain iron levels, macromolecular IV iron are intended to be administered only to treat excessively low (or absolute) iron deficiency.

Accordingly, as Triferic gains market share, we expect Macromolecular IV iron use will decline.

Both therapies are needed to treat dialysis patients, where Triferic is given at every dialysis treatment to maintain iron levels, macromolecular IV iron is intended to be administered only to treat excessively low (or absolute) iron deficiency.

Accordingly, if Triferic gains market share, we expect macromolecular IV iron use will decline.

The markets for drug products are highly competitive.

21 unchanged sentences

CLINICAL PIPELINE

Home Infusion

The FDA has provided feedback on our proposed clinical development plans which we intend to incorporate into the next iteration of clinical protocols and FDA correspondence and dialogue.

FDA has accepted our proposed development strategy to pursue an approval via the 505(b)(1) pathway as a novel NDA for FPC for treatment of IDA in adult patients.

The FDA further agreed with our approach to cross-reference non-clinical pharmacology and toxicology from our prior INDs and does not foresee the need for additional studies in these areas.

We have incorporated feedback provided by FDA from our pre-IND meeting and initial IND submission to further clarify study design, patient selection and study endpoints for our Phase II study of a FPC for treatment of IDA in adult patients receiving home infusion therapies.

Triferic portfolio

Rockwell plans to conduct a study to evaluate the efficacy, safety and compatibility of Triferic and roxadustat for the maintenance of hemoglobin in HDD-CKD patients.

The primary objective of the study will be to evaluate the efficacy of roxadustat-Triferic in maintaining erythropoiesis in adult patients with chronic kidney disease receiving hemodialysis.

Efficacy will be measured primarily by the change from baseline in hemoglobin (Hgb).

Secondary objectives will include:

the efficacy of roxadustat-Triferic as compared to roxadustat alone based on Hgb response and level during the study, the need for IV iron use in subjects treated with roxadustat-Triferic as compared to roxadustat alone, and the efficacy of roxadustat-Triferic based on Hgb response in inflamed subjects (stratify).

Commencement of the study is pending FDA approval of roxadustat and its commercial availability in the United States.

As of March 2021, the FDA has recommended an advisory panel review the new drug application for roxadustat.

Real World Data

2 unchanged sentences

As part of this program we are collecting data from sites that are purchasing Triferic (dialysate) in the United States so that we can assess the impact of Triferic (dialysate) on various clinical and pharmacoeconomic measures.

Results from a study, conducted by New York University and reported in Critical Care Medicine, showed $296,000 in cost savings from Triferic.

Results from a study, conducted by New York University and reported in Critical Care Medicine, showed $296,000 in an annual pharmacy cost savings from Triferic.

The study, which was independent of Rockwell, reviewed the effects of long-term use of Triferic in a large outpatient dialysis clinic, and showed substantial cost savings due to reductions in ESA and macromolecular IV iron use without impacting patient safety and hemoglobin targets.

In a retrospective data review of 100 patients that were followed before and after implementation of Triferic dialysate, there was a relative reduction in average weekly ESA dose of 26.4%, total use of IV iron replacement therapy decreased with a relative reduction in the use of all iron products (iron sucrose 65.7%, sodium ferric gluconate 98.2%) while anemia targets were met.

This clinic determined that the reduction of these agents resulted in a net savings of more than $296,000 in one fiscal year.

This clinic determined that the reduction of these agents resulted in a net pharmacy savings of more than $296,000 in one fiscal year.

Pediatric Study

9 unchanged sentences

Under the Wanbang Agreement, Wanbang is responsible for all clinical development costs required to support the approval of Triferic in China.

Recruitment in this study is ongoing.

We have received regulatory guidance from the European Medicines Agency (“EMA”) regarding the clinical studies that are needed to file for approval of Triferic AVNU in Europe.

At the present time, we do not intend to

commence these clinical studies, absent finding a development partner in Europe or raising additional capital.

At the present time, we do not intend to commence these clinical studies, absent finding a development partner in Europe or raising additional capital.

We may request additional guidance depending on the uptake of Roxadustat after its approval and launch in the EU.

Home Infusion

The FDA has feedback on our proposed clinical development plans which we intend to incorporate into the next iteration of clinical protocols and FDA correspondence and dialogue.

FDA has accepted our proposed development strategy to pursue an approval via the 505(b)(1) pathway as a novel NDA for FPC for treatment of IDA in adult patients.

The FDA further agreed with our approach to cross-reference non-clinical pharmacology and toxicology from our prior INDs and does not foresee the need for additional studies in these areas.

We plan to take advantage of the early consultation opportunities provided by FDA in a pre-IND meeting to further clarify study design, patient selection and study endpoints for our Phase II study of a FPC for treatment of IDA in adult patients receiving home infusion therapies.

We currently expect to have this meeting and be able to initiate the clinical trial in the second half of this year.

Other Therapeutic Product Candidates in Development

5 unchanged sentences

Iron uptake, and thereby the clinical benefit during a hospital stay, is limited by the bioavailability for current traditional macromolecular IV iron.

FPC uniquely suited for hospitalized acute heart failure – 200mg of immediately bioavailable iron can be delivered during an average 5-day hospital stay (equivalent to over 1 gram of currently available traditional macromolecular IV iron).

FPC is uniquely suited for hospitalized acute heart failure – 200mg of immediately bioavailable iron can be delivered during an average 5-day hospital stay (approximately equivalent to over 1 gram of currently available traditional macromolecular IV iron).

We expect to request advice from the FDA in second half of 2022 to review a proposed clinical development program, starting with a mechanistic clinical proof of concept study that would determine if FPC administration can impact myocardial energetics and cardiac function.

4 unchanged sentences

We have established an organizational structure and quality system procedures to ensure our device products are designed and produced to meet product quality requirements and FDA guidelines.

The Grapevine, TX facility is certified to ISO 13485:2016.

Dialysis products are manufactured and tested using validated equipment and defined process controls to ensure rigorous conformance to specifications.

1 unchanged sentence

Our concentrates are labeled per FDA Unique Device Identifier ("UDI") code requirements to ensure traceability of distributed products.

Our quality program activities also include assessments of suppliers of raw materials, packaging components and finished goods, and quality management reviews designed to inform management of key issues that may affect the quality of products, assess the effectiveness of our quality systems and identify areas for improvement.

Our quality program activities also include assessments of suppliers of raw materials, packaging components and finished goods, and quality management reviews

designed to inform management of key issues that may affect the quality of products, assess the effectiveness of our quality systems and identify areas for improvement.

Drug Manufacturing

1 unchanged sentence

These contract manufacturers are FDA registered drug manufacturing establishments.

We follow defined procedures to qualify manufacturers of our products and to review and approve all manufactured products to ensure compliance with FDA cGMP

We follow defined procedures to qualify manufacturers of our products and to review and approve all manufactured products to ensure compliance with FDA cGMP regulations.

We ensure our CMOs have established robust quality systems and employ validated processes to ensure the quality and compliance of our drug products to their specifications prior to distribution.

The raw materials and packaging materials for our hemodialysis concentrates, the components for our hemodialysis kits and the ancillary hemodialysis products distributed by us are generally available from several potential suppliers.

The raw materials for our concentrate products consist primarily of chemical ingredients and packaging components, all of which meet or exceed the requirements of United States Pharmacopeia (“USP”).

Key raw materials for our hemodialysis concentrates include citric acid USP, calcium chloride USP, dextrose USP, glacial acetic acid USP, magnesium chloride USP, potassium chloride USP, sodium bicarbonate hemodialysis grade USP and sodium chloride USP, as well as key packaging components such as bottles, caps, bags, boxes and labels.

There are multiple potential suppliers for each of these raw materials.

The raw materials for our concentrate products consist primarily of chemical ingredients which meet or exceed the requirements of United States Pharmacopeia (“USP”).

Key raw materials used in our hemodialysis concentrates include USP grade sodium chloride, calcium chloride, magnesium chloride, potassium chloride, dextrose, citric acid, glacial acetic acid, and sodium bicarbonate.

Key packaging components include bottles, caps, bags, boxes, and labels.

We generally negotiate pricing and approximate material quantities for our chemicals on an annual basis and utilize blanket purchase orders with monthly release schedules to meet our needs for production.

7 unchanged sentences

The majority of our domestic dialysis concentrate products are delivered through our subsidiary, Rockwell Transportation, Inc., which operates a fleet of trucks used to deliver products to our customers.

Rockwell distribution and delivery will continue to operate under the Distribution Agreement on behalf of Baxter for domestic business.

Rockwell distribution and delivery operates under the Distribution Agreement on behalf of Baxter for domestic business.

MATERIAL AGREEMENTS

10 unchanged sentences

The Distribution Agreement also requires Baxter to meet minimum annual purchase levels, subject to a cure period and certain other relief, in order to maintain its exclusive distribution rights.

The minimum purchase levels increase each year over the term of the Distribution Agreement.

The minimum purchase levels increase each year over the term of the Distribution

Purchases in any calendar year that exceed the minimum may be carried forward and applied to future years’ minimum requirements.

The Distribution Agreement, as amended by the Second Amendment, also contains provisions regarding our obligations to maintain specified manufacturing capacity and quality levels.

We continue to manage customer service, transportation and certain other functions for our current customers.

We manage customer service, transportation and certain other functions.

For customer service, Baxter pays us an amount equal to our related costs plus a slight mark-up for these services.

2 unchanged sentences

The fee payable in connection with construction of the facility will be reduced to the extent that the facility is not operational within 12 months after the start of construction.

Except for any leased components, we will own and operate the facility when completed.

Except for any leased components, we would own and operate the facility when completed.

Either party may terminate the Distribution Agreement upon the insolvency or material breach of the other party or in the event of a force majeure.

1 unchanged sentence

If Baxter terminates the Distribution Agreement under the discretionary termination or the price increase provisions, it would be subject to a limited non-compete obligation in the United States with respect to certain products for a period of two years.

Pursuant to the Distribution Agreement, we received an upfront fee of $20 million in October 2014.

If a “Refund Trigger Event” occurs prior to December 31, 2021, we would be obligated to repay 25% of the upfront fee and any paid portion of the facility fee.

A “Refund Trigger Event” means any of the following:

(i) a change of control of the Company involving any of certain specified companies;

(ii) a termination by Baxter due to the Company’s bankruptcy or breach, or due to price increases that exceed the stated thresholds;

(iii) a termination by either party due to a force majeure;

(iv) settlement or adjudication of any claim, action or litigation relating to a covered product that materially and adversely affects Baxter’s commercialization of the product;

and (v) any regulatory action or ruling relating to a covered product that materially and adversely affects Baxter’s commercialization of the product.

The Distribution Agreement may be extended for an additional five years by Baxter if Baxter achieves a specified sales target and pays an extension fee of $7.5 million.

10 unchanged sentences

The Charak Amendment amends the royalty payments due to Charak under the 2002 Agreement such that the Company is liable to pay Charak royalties on net sales by the Company of products developed under the license, which includes the Company’s Triferic product, at a specified rate until December 31, 2021 and thereafter at a reduced rate from January 1, 2022 until February 1, 2034.

Additionally, the Company shall pay Charak a percentage of any sublicense income during the term of the agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid patent claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid patent claim, on a country-by-country basis.

In addition, the Company is required to pay Charak a percentage of any sublicense income during the term of the agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid patent claim, on a country-by-country basis, and not be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid patent claim, on a country-by-country basis.

Also pursuant to the Charak MSA, the Company and Charak entered into a Commercialization and Technology License Agreement Triferic IV, dated as of October 7, 2018 (the “IV Agreement”), under which Charak granted the Company an exclusive, sublicensable, royalty-bearing license to SFP for the purpose of commercializing certain intravenous-delivered products incorporating SFP for the treatment of iron disorders worldwide for a term that expires on the later of February 1, 2034 or upon the expiration or termination of a valid claim of a licensed patent.

The Company is liable to pay Charak royalties on net sales by the Company of products developed under the license at a specified rate until December 31, 2021.

From January 1, 2022 until February 1, 2034, the Company is liable to pay Charak a base royalty at a reduced rate on net sales and

an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis.

The Company shall also pay to Charak a percentage of any sublicense income received during the term of the IV Agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and no be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis.

From January 1, 2022 until February 1, 2034, the Company is liable to pay Charak a base royalty at a reduced rate on net sales and an additional royalty on net sales while there exists a valid claim of a licensed patent, on a country-by-country basis.

Company shall also pay to Charak a percentage of any sublicense income received during the term of the IV Agreement, which amount shall not be less than a minimum specified percentage of net sales of the licensed products by the sublicensee in jurisdictions where there exists a valid claim, on a country-by-country basis, and no be less than a lower rate of the net sales of the licensed products by the sublicensee in jurisdictions where there exists no valid claim, on a country-by-country basis.

Also pursuant to the Charak MSA, the Company and Charak entered into a Technology License Agreement TPN Triferic, dated as of October 7, 2018 (the “TPN Agreement”), pursuant to which Charak granted the Company an exclusive, sublicensable, royalty-bearing license to SFP for the purpose of commercializing worldwide certain Total Parenteral Nutrition (TPN) products incorporating SFP.

4 unchanged sentences

GOVERNMENT REGULATION

We are regulated by the FDA under the Federal Food, Drug and Cosmetics Act, as well as by other federal, state and local agencies.

We are 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.

We hold several FDA product approvals including for both drugs and medical devices.

The testing, manufacture and sale of our hemodialysis concentrates and the ancillary products we distribute are subject to regulation by numerous governmental authorities, principally the FDA and corresponding state and foreign agencies.

Under the Federal Food, Drug, and Cosmetic Act, as amended (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.

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.

Noncompliance with applicable requirements can result in, among other things, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure of the government to grant pre-market clearance or pre-market approval for devices, withdrawal of marketing clearances or approvals and criminal prosecution.

We are developing and commercializing selected drug candidates, such as Triferic, Triferic AVNU and other candidates utilizing the FPC Platform.

We are developing and selling selected drug candidates, such as Triferic, Triferic AVNU and other candidates utilizing the FPC Platform.

The development and regulatory approval process for new drugs and additional indications for approved drugs includes preclinical testing and human clinical trials and is lengthy and uncertain.

16 unchanged sentences

It usually takes approximately one year to obtain approval after filing the request, and may take substantially longer.

Our hemodialysis concentrate products and other ancillary devices are subject the FDA 510(k) requirements.

510(k) clearance generally is granted when the submitted information establishes that a proposed device is “substantially equivalent” in terms of safety and effectiveness to a legally marketed device that is not subject to premarket approval.

A legally marketed device is a “pre‑amendment” device that was legally marketed prior to May 28, 1976 (for which a PMA is not required), a device that has been reclassified from Class III to Class I or II, or a device which has been found substantially equivalent through the 510(k) process.

The FDA in recent years has been requiring a more rigorous demonstration of substantial equivalence than in the past, including requiring clinical trial data in some cases.

For any devices that are cleared through the 510(k) process, modifications or enhancements that could significantly affect safety or effectiveness, or constitute a new or major change in the intended use of the device, will require new 510(k) submissions.

It usually takes from three to six months from the date of submission to obtain 510(k) clearance, and may take substantially longer.

If human clinical trials of a device are required, whether for a 510(k) submission or a PMA application, and the device presents a “significant risk,” the sponsor of the trial (usually the manufacturer or the distributor of the device) will have to file an investigational device exemption (“IDE”) application prior to commencing human clinical trials.

11 unchanged sentences

We are also subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection, fire hazard control, transportation and disposal of hazardous or potentially hazardous substances.

Our hemodialysis concentrate products and other ancillary devices are subject the FDA 510(k) requirements.

We have 510(k) clearance from the FDA to market hemodialysis concentrates in both liquid and powder form.

51 unchanged sentences

The Best Pharmaceuticals for Children Act (“BPCA”) provides NDA holders a six-month extension of the marketing exclusivity or patent protection for a drug if certain conditions are met.

Conditions for exclusivity include the FDA’s determination that information relating to the use of a new drug in the pediatric population may produce health benefits in that population, the FDA making a written request for pediatric clinical trials, and the applicant agreeing to perform, and reporting on, the requested clinical trials within the statutory timeframe.

on, the requested clinical trials within the statutory timeframe.

Applications under the BPCA are treated as priority applications, with all of the benefits that designation confers.

26 unchanged sentences

2029 expiration date in U.S.

and foreign (Europe, Japan and Canada) for the synthesis and formulation of our pharmaceutical grade formulation of our Triferic product.

and 2028 expiration date in foreign (Europe, Japan and Canada) for the synthesis and formulation of our pharmaceutical grade formulation of our Triferic product.

In the United States, this patent is listed in Orange Book.

European patent validated in 28 European states (not included in total).

Two European patents validated in 3 European states (not included in total).

Granted patents validated in 28 European states (not included in total).

Pending patents for solid particulate formulation for preparing dialysate, if issued, will expire in 2036.

One European patent validated in 3 European states (not included in total).

European patent validated in 12 European states (not included in total).

6 unchanged sentences

We believe that our compensation and benefit programs are appropriately designed to attract and retain qualified talent.

Employees receive an annual base salary and are eligible to earn performance-based cash bonuses.

Employees receive an annual base salary and are eligible to earn a performance-based merit increase and cash bonuses.

To create and maintain a successful work environment, we offer a comprehensive package of additional benefits that support the physical and mental health and wellness of all of our employees and their families.

1 unchanged sentence

We are committed to a safe workplace for our employees and have implemented health and safety management processes into our operations.

In response to the COVID-19 pandemic, we have implemented additional safety measures for the protection of our employees, including work-from-home measures for applicable employees and additional cleaning and protective measures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business