Rockwell Medical (RMTI) announced that the company is reacquiring its distribution rights to its hemodialysis concentrates products from Baxter (BAX) and has agreed to terminate the exclusive distribution agreement dated October 2, 2014. Exclusivity and other provisions associated with the distribution agreement terminate November 9, 2022 and the remaining operational elements of the agreement terminate December 31, 2022. Rockwell is the second largest supplier of life-sustaining hemodialysis concentrates products to dialysis clinics in the United States. Under the exclusive distribution agreement, Baxter distributed and commercialized Rockwell’s hemodialysis concentrates products in the United States and certain other countries. Rockwell manufactured all hemodialysis concentrate products and provided customer service and order delivery to nearly all U.S. customers. Following the reacquisition of these rights, Rockwell will now be able to sell its hemodialysis concentrates products directly to dialysis clinics throughout the United States and around the world. Additionally, Rockwell will now be able to independently price its products, eliminate costs associated with manufacturing covenants, improve manufacturing efficiencies, realize the full benefits from those improvements, and develop, in-license, or acquire new products to develop a broader kidney care products portfolio. This will improve Rockwell’s overall profitability and set the company on a positive growth trajectory. Collectively, this affords Rockwell the opportunity to expand its leadership position within a large market opportunity, which currently is valued at $380M and is anticipated to grow to approximately $500M by 2026 in the United States alone. Rockwell will pay Baxter a fee for the reacquisition of its distribution rights. This fee will be payable in two equal installments on January 1, 2023 and April 1, 2023. To ensure that customer needs continue to be met after January 1, 2023, Baxter and Rockwell are working closely together to transition customers’ purchases of Rockwell’s hemodialysis concentrates from Baxter to Rockwell. With the completion of this transaction, along with the company’s expanded partnership with DaVita (DVA) announced earlier this year, and the launch of a number of new growth initiatives, Rockwell expects to achieve profitability in 2024. If successful, the company expects that its cash balance will be sufficient to fund operations going forward, thereby reducing its reliance on funding operations through raising money in the capital markets.
Published first on TheFly
