Good day, ladies and gentlemen, and welcome to the Rockwell Medical 2018 Q4 and Year End Results Call. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the call over to Judy DiClemente from In-Site Communications. Ma'am, please begin..

statements about the timing and success of our planned NDA submission for IV Triferic; the potential market opportunity for IV Triferic and other Rockwell products; pricing and reimbursement status for IV Triferic, Dialysate Triferic and other Rockwell products, including eligibility for add-on reimbursement under TDAPA; liquidity and capital resources; expected duration of Rockwell's existing working capital plans; and plans and timing relating to the planned commercialization of Triferic; and the timing and success of our efforts to renegotiate economic terms of our concentrates business.

Forward-looking statements are subject to numerous factors that could cause actual results to differ from our anticipated results.

These include the factors described in our Form 10-K and are updated in our periodic reports, including our most recent quarterly report on Form 10-Q, which is available on the SEC's website at www.sec.gov and through a link on our website located at www.rockwellmed.com.

The forward-looking statements made on this call are made as of the date of this call, and we disclaim any intent to publicly update these forward-looking statements to reflect subsequent events or circumstances. This conference call can be accessed on Rockwell Medical Investor Relation's webpage.

This call is being recorded on March 14, 2019 for audio rebroadcast and can also be accessed on the same webpage. The call will be followed by a question-and-answer session. At this time, I would like to turn the conference call over to Rockwell's CEO, Stuart Paul.

Stuart?.

Dialysate Triferic and IV Triferic. And during the second quarter of 2019, we expect to launch Dialysate Triferic in the U.S. and file a new drug application for IV Triferic. More details on that later. This market is large and therefore, constitutes a sizable opportunity for us. In the U.S.

alone, there are more than 500,000 end-stage renal disease patients, who receive more than 70 million in-center hemodialysis treatments each year. Today, sales of anemia therapies, ESAs, and IV irons, top over $4 billion. This is why we're so excited about our Triferic portfolio.

Triferic offers a more physiologic approach to iron replacement and hemoglobin maintenance.

And unlike traditional IV iron products, it bypasses the liver offering a safe and gentle uptake and it binds immediately to transferrin, which transports the iron to the bone marrow for red blood cell production without buildup in the liver or other organs or tissues.

And this is a key differentiator compared to current IV iron products that I discussed earlier. Furthermore, because of its unique mechanism of action, we believe Triferic has the potential to offer better pharmacoeconomic outcomes for dialysis clinics.

In our ESA-sparing PRIME clinical study, we demonstrated 35% ESA reduction in Triferic patients compared with a placebo arm at nine months, and a 74% ESA reduction in ESA hyporesponsive patients compared with the placebo at nine months.

And we believe the hypo-responder segment, which as defined in the PRIME study accounts for more than 20% of the hemodialysis patients in the U.S. presents an attractive opportunity for the adoption of Triferic. And importantly, the hemoglobin level was maintained throughout the study.

And we also showed 51% less traditional IV iron use among Triferic patients compared with the placebo arm, with no increase in ferritin levels. These are very significant findings and they support our enthusiasm for the upcoming product launch.

And so compared with the existing standard of care for anemia management, we believe Triferic offers a better risk-benefit profile. And in addition to its proven safety profile and unique mechanism of action, Triferic has the potential to offer hemodialysis clinics a strong pharmacoeconomic proposition.

We continue to work with clinics that have trialed Triferic to harness available data to advance a publication strategy on health economic outcomes related to Triferic. And as a result, we're extremely excited about Triferic, and we have multiple formulations that we think will offer unique alternatives to dialysis clinics and patients.

Our initial formulation, which we call Dialysate Triferic, consists of both a powder packet presentation and a liquid presentation. The powder packet presentation is mixed with liquid bicarbonate in the water rooms that are prevalent at dialysis clinics in the U.S.

The bicarbonate solution is then transported to patients through a central loop system at the dialysis clinic, meaning that all patients in the clinic can receive Triferic. Each powder packet provides enough Triferic for the treatment of 10 patients.

And we also have a liquid ampoule presentation of Dialysate Triferic that can be administered to a single patient through the bicarbonate solution at the bedside, without going through the central loop system. We intend to launch both presentations of Dialysate Triferic during the second quarter of 2019.

Our next formulation, which we call IV Triferic, can be administered to patients directly through the blood line during their dialysis treatment. We expect to file an NDA for IV Triferic during the second quarter of 2019, which would put us on track for an approval decision in the first half of 2020.

We believe the infrastructure we are building for the launch of Dialysate Triferic and the activities we'll be undertaking during 2019 will lay the groundwork for our potential launch of IV Triferic next year, if approved.

To build and execute our rollout of Triferic, we've assembled an outstanding team with broad industry and promised experience, these executives will be instrumental to our success, and we've been hard at work preparing for our upcoming launch.

Our launch activities for the Triferic franchise, specifically Dialysate Triferic, have progressed over the last several months. There are several activities we needed to conduct to prepare for this launch, including market and pricing research, and the development and execution of a production plan for fresh finished goods.

We're also spending a significant amount of time engaging with key opinion leaders as well as commercial and medical advisory boards to educate and build awareness around Triferic and its key advantages. We've been building a commercial team in the field that is already in the process of preparing targeted accounts for launch.

Our focus for 2019 will be on delivering compelling medical education around Triferic and beginning the process of converting clinics to commercial use of the product.

We fully expect that Triferic has the potential to become the standard of care over the course of the next several years due to the advantages that we've discussed, but we expect that it will take some time for us to educate providers about changing their existing anemia management practices.

Looking at the Dialysate Triferic launch more specifically, our approach will be multipronged. First, we plan to focus on the dialysis centers that have participated in the Triferic trial program.

And more broadly, we plan to target the launch of Dialysate Triferic to selected medium-sized, small and independent dialysis organizations that make up approximately 25% of the U.S. market. At launch, we expect to have a team of sales, marketing, medical professionals onboard, and we expect to ramp to approximately 25 people by the end of this year.

For those dialysis centers that are seeing Triferic for the first time, we would expect the conversion cycle, several months. Importantly, the team we're building will gain valuable experience with the product and our customers during 2019 and be better positioned to support the launch of IV Triferic in 2020.

Now, let me turn to the next formulation in our Triferic portfolio, IV Triferic, which has the same unique mechanism of action as Dialysate Triferic and offer several additional benefits. From a regulatory standpoint, the FDA views IV Triferic as a new dosage form and routed administration, and therefore, it requires a separate NDA.

IV Triferic was developed under a special protocol assessment with the FDA, which means that the FDA pre-agreed to the trial design, clinical endpoints and statistical analyses of our studies. As part of the SPA, the FDA agreed that an equivalence approach would be acceptable for IV Triferic.

In other words, rather than running additional safety and efficacy trials, our NDA would be acceptable for review if we are able to show bioequivalence between IV Triferic and Dialysate Triferic by comparing PK parameters of total iron and transferrin-bound iron of IV Triferic to Dialysate Triferic.

In PK studies that were completed last year, IV Triferic demonstrated bioequivalence with Dialysate Triferic. We will be presenting the data from this study at the Annual Dialysis Conference in Dallas on March 18th.

We held a pre-NDA meeting with the FDA in June of 2018, during which the FDA agreed that the equivalence study was adequate for submission of an NDA. No other material issues were raised regarding our studies and the potential NDA filing during the meeting.

And based on the data from the equivalent study and feedback received during that pre-NDA meeting, we plan to submit our NDA to the FDA for approval in the second quarter of this year, with an anticipated PDUFA date in the first half of 2020. We're excited about the additional benefits and potential offered by IV Triferic.

First, it offers dialysis clinics another option for administering Triferic to patients. And while some centers may prefer the convenience of the dialysate formulation, others are likely to view IV Triferic as a better solution, based on their workflow for anemia protocols.

And second, if approved on or after January 1, 2020, we believe IV Triferic will be eligible, subject to CMS approval, for the recently announced CMS transitional drug add-on payment adjustment, or TDAPA, which provides that new therapies approved beginning in 2020 are eligible for separate payments for a period of 24 months.

We believe separate reimbursement for IV Triferic in the U.S. would help remove certain hurdles to adoption and make Triferic more appealing to dialysis clinics from a financial point of view. Finally, we believe the global market opportunity for IV Triferic is larger than that of Dialysate Triferic.

And the reason for this is that in many large international markets such as Europe, China and Japan, dialysis clinics predominantly use dialysis monitors that utilize dry bicarbonate cartridges. And since Dialysate Triferic must be mixed with liquid bicarbonate prior to use, it's simply not compatible with these monitors.

On the topic of reimbursement, we've spent a great deal of time consulting with experts to gain clarity around TDAPA and the final payment rule that was published last November by CMS.

As previously disclosed, we expect Dialysate Triferic will be reimbursed by Medicare within the bundle base rate for dialysis providers, meaning that it will not be reimbursed separately. Accordingly, we're finalizing our market and pricing research to determine the optimal product pricing for Dialysate Triferic.

We plan to launch commercial sales of Dialysate Triferic in the second quarter, and even within the bundle, we believe we can achieve attractive margins while making the product affordable for a broad reach of patients.

More importantly, we believe Triferic has the potential to shift the paradigm for anemia management and dialysis, and it needs to get into the hands of clinicians and patients who require it the most.

As we begun to educate leading KOLs about the advantages of Triferic, there is a great deal of enthusiasm about the clinical and pharmacoeconomic advantages that Triferic offers and the potential paradigm shift in managing anemia within this population.

For IV Triferic, as mentioned previously, we believe that we will be eligible for TDAPA or reimbursement for Medicare outside the bundle for a period of 24 months, subject to review and approval by CMS.

The final rule for the ESRD prospective payment system that was published in November of 2018 by CMS states that all new renal dialysis drugs approved after January 1, 2020 are eligible for TDAPA reimbursement at ASP plus 0%.

According to CMS, to qualify as a new drug, a product must be approved by FDA under Section 505 of the Federal Food Drug and Cosmetic Act or Section 351 of the Public Health Service Act, be commercially available and have a HCPCS application submitted for a J-code as well to be designated by CMS as a renal dialysis service, which includes injectable drugs.

We believe that IV Triferic can meet these threshold criteria, and therefore, will be eligible for TDAPA. We are currently engaging with CMS and regulatory consultants to assist us with positioning IV Triferic optimally for TDAPA in a 2-year window of separate payments, after which it would likely go into the bundle.

Turning to the development of Triferic outside the United States, we've made significant progress, specifically working with our partner in China, Wanbang Biopharmaceuticals. We have initiated 2 PK studies, one of which has completed dosing and the other, which is approximately halfway through enrollment.

These studies are being conducted as part of the clinical trial plan that was approved by the CFDA in early 2018, and we expect that these studies will likely be completed in the coming months. Following completion of these studies and in collaboration with our partner, we expect to have the equivalent of a pre-NDA meeting with the CFDA.

And assuming a positive outcome from that meeting, we would expect our partner, Wanbang, to file for regulatory approval sometime later this year, with a potential approval by late 2020.

While our original license agreement covers Dialysate Triferic, our partner has certain rights to new Triferic therapeutics, and we are in the process of working on adding IV Triferic to the agreement.

And as I said previously, we believe IV Triferic is also a significant opportunity in China, since that market is largely online by bicarbonate generation. We expect that the meeting with CFDA later this year will also help clarify the regulatory pathway for the approval of IV Triferic in China.

China represents a large market opportunity, with more than 400,000 hemodialysis patients. And our current agreement with Wanbang provides for up to $35 million of regulatory and sales-based milestone payments, beginning with the approval of Triferic in China plus an attractive transfer price and double-digit royalty.

Moving on to our other international activities, we expect to file for regulatory approval for Triferic in Canada in 2019. Our distribution agreement there provides us with an opportunity to realize a majority of the economics on sales of Triferic in Canada.

We're also excited that in January of this year, we received our first international approval for Dialysate Triferic in Peru, and we expect to launch with our partner in Q3 of this year to address the population of more than 11,000 hemodialysis patients in Peru.

We're looking forward to further expansion in Latin America and are awaiting our next approval in Chile. Going forward, our international priorities are to identify partners for IV Triferic in key unpartnered regions, most notably Europe and Japan. In Europe, there are more than 350,000 hemodialysis patients.

During 2018, we reached an agreement with EMA on the parameters for a Phase III study to support regulatory approval in Europe. The study would include a primary endpoint linked to ESA-sparing, which could provide additional important pharmacoeconomic data.

At this time, we do not intend to initiate the study until we have reached an agreement with a partner for Europe. In Japan, we're also in active discussions regarding a license for Triferic. Japan is another attractive market with a hemodialysis patient population of more than 300,000.

We expect that these partnership agreements, if completed, would include a mix of upfront payments, milestone payments and royalties payable to us.

While much of the attention today is directed at the opportunities that lie ahead for Triferic, let me now turn to Rockwell's concentrate business, which accounts for substantially all of the $16.9 million we generated in revenues in Q4 of 2018.

We now see supplies significant -- well, we now supply significant amounts, I should say, of concentrates to key players in the dialysis industry, including Baxter and DaVita, and we believe these relationships give us entree to further development opportunities with both companies around our therapeutic portfolio.

We're also currently exploring opportunities to improve the economics of the concentrate business to achieve operational efficiencies and to reach new customers, both in the U.S. and internationally. Last quarter, there were a number of questions also regarding the future of Calcitriol.

Let me share that we have completed a full market assessment for Calcitriol in the United States, including the review of pricing, manufacturing costs, capacity and demand. And after careful consideration, we have concluded that launching Calcitriol in the United States is not in the best interest of Rockwell at this time.

Simply put, at this time, we do not see an opportunity in the U.S. to generate meaningful revenues as a profit margin -- with a profit margin that makes sense. And accordingly, we're reserving against our remaining Calcitriol inventory of approximately $700,000.

Going forward, we will continue to evaluate market conditions and we're engaged in ongoing discussions with our Chinese partner about developing and launching Calcitriol in that market. I will now turn the call over to our CFO, Angus Smith, to review our financials.

Angus?.

Thank you, Stuart. Let me start by reviewing our financial results for the fourth quarter of 2018. Sales for the fourth quarter of 2018 were $16.9 million compared to sales of $14.8 million for the fourth quarter of 2017.

The increase of $2 million was primarily due to an increase in sales for international use and increased revenue from distribution and management fees billed to Baxter as well as increase to product sales to both Baxter and DaVita.

Gross profit for the fourth quarter of 2018 was $1.2 million compared to a gross loss of $1.2 million in the fourth quarter of 2017. Gross profit was negatively impacted by inventory reserves related to Triferic of $300,000 in the fourth quarter of 2018 compared to $2.7 million in the fourth quarter of 2017.

The year-over-year improvement in gross profit was due primarily to this lower inventory reserve and an increase in sales volume, partially offset by higher distribution costs and higher variable costs due to the increase in sales volume.

Selling, general and administrative expenses were $7.9 million for the fourth quarter of 2018 compared with $5.9 million for the fourth quarter of 2017.

The $2 million increase was primarily due to increases in stock-based compensation and higher consulting expenses, recruiting fees, bonus and insurance expenses, offset by lower legal and annual reporting expenses.

Research and product development expenses were $1.6 million for the fourth quarter of 2018 compared with $2.1 million for the fourth quarter of 2017. The decrease in fourth quarter -- in the fourth quarter of 2018 was largely related to lower clinical trials and product testing expense for Triferic, partially offset by higher labor costs.

Research and product development expenses for the fourth quarter of 2018 also included a $700,000 inventory write-down for Calcitriol. Research and development expenses licensed to the acquired were $1.1 million in the fourth quarter of 2018 compared to zero in the fourth quarter of 2017.

The expenses in this category relate to the master services and IT agreement and related agreement entered into with Charak LLC and Dr. Ajay Gupta in October 2018. Net loss for the fourth quarter of 2018 was $9.4 million or $0.17 per basic and diluted share compared to a net loss of $9 million or $0.18 per basic and diluted share in 2017.

Cash used in operating activities was $5.8 million for the fourth quarter of 2018. And as of December 31st, 2018, the company had total liquidity of $33.5 million, consisting of cash and cash equivalents of $22.7 million and available for sale investments of $10.8 million. Working capital as of December 31st, 2018, was $33.6 million.

With that, I will now turn the call back to Stuart..

Thank you, Angus. Let me reiterate that Rockwell today has a management team, Board of Directors and a scientific advisory board that is capable and ready to take Triferic forward and address the unmet medical needs of hemodialysis patients around the world.

We have worked tirelessly to prepare a go-forward, long-term business plan for the commercialization of Triferic, which we believe has the potential to shift the paradigm on therapeutic care in the hemodialysis space and to add value for our shareholders. We will now open the call to questions.

Operator?.

[Operator Instructions] And our first question comes from the line of David Bouchey of IFS Securities. Your line is now open..

Thank you. Good morning, guys. I'll try and keep my -- I got a lot of questions, but I'll try to keep them to a minimum so that other people get a chance to ask. The first thing I want to do is just kind of get a clarification from you in terms of the Calcitriol decision.

And I know that in previous management had estimated that there might be $40 million to $50 million worth of peak sales for Calcitriol in the U.S. It was being marketed as a lowest cost, lowest dose active vitamin D.

And part of the advantages that the company had talked about were the fact that its margins were going to be in the range of 40% or more.

So, I'm not looking for a comparison between the two management styles, but can you tell me what has changed in those numbers so that you don't want to launch Calcitriol anymore?.

Yes, David. Hi, it's Angus. Thank you for the question. And good morning. It's a great question. What I'll say is we've done a deep dive from a financial perspective. We've had conversations with customers. We've assessed our manufacturing capabilities.

And what we've concluded based on the feedback that we've received is that the prevailing market prices for a product like Calcitriol are, in many cases, lower than our manufacturing costs. And obviously, from a business standpoint, it doesn't make a whole lot of sense to launch into a market like that.

So we've done a lot of work comparing the dose equivalency of Calcitriol to similar products that are on the market and an adjusted price for that as well. And again, it just doesn't get us to where we think we need to be from a margin standpoint. So, with that in mind, at this point, we're deciding not to launch it in the U.S.

As Stuart mentioned, we'll continue to evaluate the market for Calcitriol in the U.S., and we're also continuing dialogue with our partner in China, Wanbang, about the potential market for Calcitriol there..

Okay. And a little clarification on the Chinese partnership.

I believe, Stuart, did you just say that the next available milestone would be for approval for Triferic in China?.

Correct..

Okay..

It's Stuart. So great to speak with you. We're moving forward with our partner, Wanbang Pharmaceuticals. So it is imminent that we'll complete the clinical studies in the coming months. And based upon the next discussion with CFDA, we think there is a good potential to be in position to file -- Wanbang would file in China later in the year.

So on a conservative basis, we're looking toward late 2020, hopefully, to see a potential approval in China. Those would be the relevant milestone dates..

Okay. And my next question is about the study that you have to do in the European Union in order to get approval for IV Triferic, and the primary endpoint is going to be ESA-sparing.

So, do you anticipate this trial to be similar in size and scope to the PRIME trial, which was a randomized comparative trial with a little more than 100 patients?.

Yes, David, thanks for the question. It's Angus. I think we are still -- we've had discussions with EMA about what the endpoint needs to look like in Europe and it's around the ESA dose. We haven't gotten to the stage yet, where we've drafted formal protocols and things of that nature.

I think that will all become more clear as we advance our partnership discussions. And I think whoever we choose as a partner in the EU will have a say in how those studies ultimately get designed. So I think at this stage, it would be premature to comment exactly on kind of how those trials will be designed and the scope and size..

Well, what I'm kind of getting at is do you have an estimate for how much that trial might cost?.

Yes. Again, probably ballpark, we haven't given guidance out obviously, at this stage. And as I said before, it's probably preliminary to comment on exactly what the cost of that study would be, which we saw there's a fair bit work to do with partners to help draft that protocol and get a sense for what that trial could look like..

All right. And there's been some speculation that there might be a contractual change in your dialysate supplies, in particular to DaVita that there might be more of a switch to -- from GranuFlo to CitraPure.

Can you comment upon what you might expect to see in the coming year in terms of your sales to DaVita?.

Well, we're not going to give specific guidance on the actual sales levels at this stage, but I will say that we're in discussions with DaVita around the entire concentrate portfolio going forward. We think we have opportunities to address pricing and margin as well as logistics improvements.

We think CitraPure is a great product for DaVita and other dialysis providers in the United States market, so we're going to continue to look at expanding our focus with CitraPure. We think CitraPure works beautifully with Triferic as well and sets the table for a very nice potential for paradigm shift and become part of the standard of care.

So, that's the vector that we're on. And those discussions with DaVita, I think, are going very well, and would just say with the team that we've assembled, we have much experience from prior company environments and in terms of working with DaVita and setting up a successful win-win type of a scenario around future product protocols..

Excellent. And lastly, let me address some concerns about the Triferic launch.

Do you anticipate continuing to sell the powder version of Triferic as well as the liquid version after you launch the IV version of Triferic? Are there any concerns about potential cannibalization? Or how would you address that?.

Dave, I would just say that we're not going to rule anything out at this point, but we think that we will find certain accounts that have a desire for use of the liquid presentation with certain patients and certainly, those that gravitate more with the central loop model for the powder packet. We think there's a place for all three.

It might turn out that one of the products ends up to be a little bit more niche than the other, going forward. But we work actively around market and account segmentation and account preferences.

And certainly, as we -- even on a prelaunch basis, have quite a bit of interaction with our target accounts, there are very interesting and different perspectives as to which version they would prefer.

And so with the IV model is great for those that really want to have the least interference with workflow and economics in the center because you can administer right at the patient bedside. And there's going to be a place, we think, for all three. I think down the road, IV Triferic though, is really going to be the dominant part of our mix..

Okay.

So that's something that's going to evolve over time then?.

Yes, I would say. And I think just -- I don't underestimate the challenge of just educating KOLs and nephrologists in general, there's a lot of work we have in front us here to do to make that happen.

The good news is that as they come under the tent and begin to really understand the mechanistic action and the differences between the current standard of care, there's a lot of excitement. So we really need to build that base.

And this is not something that happens overnight, right? It is going to take a year to change standard of care in an industry setting that has been somewhat fixed on a current standard of care that's been in place for quite some time.

So it will take time, and -- but we're very focused on this, and think we'll see continuous uptake and improvement for the portfolio..

Okay. Now, I have had some investors call me with concerns that the dialysate version of Triferic could impact the IV version of Triferic in terms of whether you get separate J-codes or not.

Can you offer some assurances on the call to investors? What are your beliefs that, that won't happen?.

Okay. So I know that's a big question of a lot of the investors out there. So let me just start by saying, look, there's no guarantees, right? There are no guarantees. However, however, we have met with CMS several times. We've reviewed our reimbursement plans for IV Triferic.

We reviewed our entire reimbursement portfolio for the ampoule, the powder packet and IV going forward with CMS.

We've also reviewed with top tier legal firms and expert consultants, who are deeply experienced and with a practice in the health care regulatory compliance and reimbursement arenas, and they've helped us align and present our IV Triferic reimbursement strategy to CMS.

More specifically, I would say that TDAPA applies to -- obviously, as I said earlier, it applies to new pharmaceuticals approved under the FDA 505 regulatory designation for new therapeutics approved post 1/1 of 2020.

You need to have a newly approved drug, must be commercially available, you have to apply for -- get a HCPCS for the -- submitted for separate J-code. And we believe we meet all the key criteria as laid out by CMS. We've discussed this with CMS.

So, we're also aware of other therapeutics that had similar molecular entities and are -- and have had success in establishing separate J-codes.

And so when you look at the entire picture, we're doing everything we can to affect the separate J-code, okay? There are no guarantees in this world, but we have a lot of experience on the team and with our extended group of advisory people, and we feel pretty good about the backdrop right now on that basis. .

Okay.

Can you say who specifically in CMS you've been dealing with?.

Well, I'd rather -- really rather not get into specific names of individuals..

Okay.

Well this is the last question, I promise, and I want to just ask you, do you have a timeline in mind for when you might begin to access the oncology support of care market with the IV version of Triferic?.

All right. Well, great question. I think, obviously, we believe there are opportunities outside of hemodialysis.

But right now, we're focusing all near-term efforts on dialysate and IV Triferic in hemodialysis and as well as improving our concentrate business, right? We're going to continue to evaluate investments and expanding the Triferic franchise into new indications, such as peritoneal dialysis; TPN, total parenteral nutrition; and/or oncology.

But for now, those things -- those investments are all in the back burner, I would say..

All right. Thank you. And I'll get out of the queue now. Thanks..

Great to talk with you, Dave. Thanks so much..

And our next question comes from the line of Robert McNamara, a private investor. Your line is now open..

Hi, gentlemen. I want to just follow up on some of David's questions, if I could.

When you're looking at the risk reward scenario, since you just said there's no guarantee on the separate J-code and also there was comments about what's potentially having multiple products in the market at the same time, how do you sort of come to ascertain the risk reward? And how are you looking at the pricing difference? And if you could give us some ballpark estimates in terms of the pricing for both the powder pack formulation as well as the IV..

Thanks, Robert. It's Angus. I'll start and Stuart can chime in. I think the most important thing here is that the Triferic needs to get on the market. This is a therapeutic that has the potential as Stuart said; to shift the paradigm in a way that anemia is managed in this population.

And we really think it -- patients and clinical benefit from the availability of this therapeutic. So at the end of the day, that's the primary motive here. From a pricing standpoint as Stuart mentioned, we are continuing to conduct our pricing research, both for the dialysate formulation as well as the IV formulation.

And once that's complete, we'll be able to give a little more color on what the pricing is going to look like for those therapeutics..

I would just -- Angus, good comments. I would just add that we don't underestimate the amount of work to really drive medical education in 2019.

That's really one of our primary focus points for the year, is to really begin to get the idea of what this is, the mechanism, the entire modality in terms of the treatment and the potential for shifting the paradigm out there to KOLs and I -- and to providers in general, in the dialysis space. So, we actually have a lot of work to do.

I don't underestimate the amount of work. This is a product that's been on the shelf for a number of years already. It's time to get it out there, and it's time to get it, as Angus said, into the hands of patients and clinicians who needed the most. And that's our perspective.

Working with significant experts in reimbursement, we've really torn into this, and we all come out on the same page, we literally do, that it's best to move forward with the dialysate version in market and start to build now and then shift and get into gears with IV once approved, if approved, and really continue to align all the components of the TDAPA model and the requirements of the TDAPA model with CMS.

I mean, we are in active discussions with CMS, and so they are quite up to speed with where we want to go and the strategy here for all of our portfolio. So that's what I would say..

And so as a follow-up to that, as you said with Calcitriol and concentrate, you've talked to customers, you've been in discussions, when you're launching the powder pack version initially, what are your expectations in terms of DaVita presenting as the larger corporations taking on the product in the powder form versus the IV? How are you looking at the market as you move forward with the initial launch? And also, if you could give us a little better timing in terms of when in the second quarter you would anticipate the launch occurring?.

Yes. No, great question. So what I would tell you is again, we have a franchise of Triferic products here, some approved and others about to file.

I would say that with respect to larger sophisticated dialysis organizations like the DaVitas of the world and so forth, and I would say the very large ones, let's just say, there is a significant premium on in-center workflow, in-center protocols, not disturbing those protocols, and basically outlining and launching therapeutics that can complement those protocols in a very non-disruptive way.

And so with that in mind, the way we think about the market is let's get Dialysate Triferic out into the medium and into the single size dialysis player segments and really start to work with our KOLs around the broader discussions with partners like DaVita. DaVita is a great partner for Rockwell, obviously.

And as I said, myself, my team and I have known DaVita from other environment that -- Baxter, Gambro, my past. I think we have a very open, good discussion.

DaVita is a very committed partner to Rockwell, and I think that we can all view DaVita as a very strategic partner, based on the fact that we're at the table continuously with them on the concentrate side of the house.

So, I think going forward, the segmentation of the market will allow for us to map our products into the right segments and ensure that we pair the products with the right parts of the marketplace, do it accordingly. So we've got a lot of marketing research that's been done and focus on our marketing team to ensure that we really hit this correctly..

So, is it fair to say that the initial powder launch, considering there are very different protocols for applying that product into practice with the mixing and so forth, that your initial target for 2019 at least in the powder launch would be more focused on maybe 15% to 20% of the market at best, since Fresenius and DaVita account for 30% and then you have U.S.

renal, ARA and a few others that are larger practices as well? Is that a fair estimate that you'd be looking at that also, considering in addition to protocols clearly, the commercial dialysis clinics are very motivated or focused on their own profitability?.

Yes. No, I would say 25% of the market essentially, when you look at the medium-sized chain players and you look at the single independent space, looking at about 25% of the market there.

So, yes, I would say that our target -- those are our target segments on launch with dialysate as we build experience, get our field teams, which consist of sales as well as medical science liaisons, who will continue to spend time scientifically, medically, clinically on the paradigms around anemia management to give them time to build up capabilities and strength and speed in the field and experience, in terms of helping to roll out Triferic.

Dialysate is the tip of the iceberg. You look at this from a classic marketing point of view, this is a golden opportunity to get out in market and really start to see the market well with potentially, a paradigm-shifting therapy, right? So our view is you want to do that sooner than later. So those target segments are very important to us.

We also think that they're not insignificant, 25% of the market is certainly a great place to put our toe in the water and begin to launch.

And then of course, all of the -- as I mentioned earlier, all of the sites that have been involved in this on the trial program initially, will be in that first year of the launch as well in terms of segmentation targeting..

Okay. I have two quick follow-up questions. I appreciate the time. One, very briefly, are you able to provide the patent numbers or tell us which patents were actually licensed or part of the Gupta agreement? Because it appears that when one goes into the U.S. PTO website, it's difficult to find any valid patents that are still out there.

And then my other follow-up is on the last conference call, Stuart, you had guided to having data from the sample program beginning of this year, end of last year, what's the update on having that data as you talk about generating all the pharmacoeconomic data to go out and market powder? And then I'll get back in queue..

All right. Yes. Thank you for the question. It's Angus. On the question of the patent numbers and the Charak license, we're actually going to be filing that agreement as an exhibit to our 10-K, and so all that will be in the exhibit list. It's a mix of issued patents and pending patents around the world.

And the way the agreement is structured is there's a higher royalty rate, so long as there is a -- for a period of time and then so long as there are valid and issued patents and a lower royalty rate, if we would ship here, where there -- if there are no valid and issued patents. And again, all that will be disclosed in the exhibit to our 10-K.

And the second question.

Well, can you repeat the second question?.

The second question was related to the sample program data that Stuart had mentioned we should have had probably by now..

Yes. No, fair question. We're still in the process of going through it and calling out the data. And we are basically getting our -- we're still in the process frankly, of getting our arms around it. And our plan is to take it forward in certain publication venues and potentially, conference, congress presentations as we move forward.

So more to come on that still, but we just kind of clocked that program when I came in the door, and we've been still getting our arms around the data. And so more to come there..

And I'm sorry, but real quick.

So the sample program, you're still -- is there a timing on that as to when we can have that data?.

I would say that certain elements of the data might start to come, the midpart of the year. We're in the final stages of pulling together what we have there. And again, as I said, getting it into publication strategy is our prime objective right now.

So, we might not see some of those publications until the beginning part of next year, but that would be timely from the standpoint of our anticipated IV Triferic approval. So that's the way we're looking at it..

And ladies and gentlemen, that's all the time we have for questions today. I'll now turn the call back to the Rockwell Medical team for closing remarks..

Okay. Thank you all for joining us today. We're very happy that you were able to be with us and wish you all well. And we'll be in touch with you on the next call. Thanks again..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program, and you may all disconnect. Everyone, have a wonderful day..