Rockwell Medical, Inc. (RMTI) Q3 2019 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. And welcome to the Rockwell Medical 2019 Q3 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer and instructions will follow at that time [Operator instructions]. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms. Judy DiClemente. Please go ahead, madam.

Thank you, Katrina. Welcome to Rockwell Medical's third quarter 2019 earnings results call. This is Judy DiClemente of In-Site Communications, the Investor Relations representative for Rockwell Medical. Before we begin, I wanted to note that certain matters we will discuss may constitute forward-looking statements within the meaning of the federal securities laws. Words such as may, might, will, should, believe, expect, anticipate, estimate, continue, could, potential, predict, forecast, project, plan, intend or similar expressions or statements regarding intent, belief or current expectations are forward-looking statements. While Rockwell believes these forward-looking statements are reasonable, undue reliance should not be placed on any such forward-looking statements, which are based on information available to us on the date of this release and which are subject to inherent uncertainty. These forward-looking statements are based upon current estimates and assumptions and are subject to various risks and uncertainties, including without limitation, those set forth in Rockwell's SEC filings, many of which are beyond our control and subject to change. Actual results could be materially different. Risks and uncertainties include: statements about the unique J-code for the Triferic Powder Packet; timing and the success of our 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 CMS's recently announced final rule regarding eligibility for TDAPA; liquidity and capital resources; expected duration of Rockwell's existing liquidity and working capital; success of our recently announced commercialization plans for Dialysate Triferic; and the success of our efforts to maintain, grow and improve the profitability of our business. Rockwell expressly disclaims any obligation to update or alter any statements, whether as a result of new information, future events or otherwise, except as required by law. This conference call can be accessed on Rockwell Medical's Investor Relations webpage. This call is being recorded on November 8, 2019 for audio rebroadcast, and can also be accessed on the same webpage. Present on today's call are Stuart Paul, President and Chief Executive Officer of Rockwell Medical; Angus Smith, Chief Financial Officer of Rockwell Medical; and John McLaughlin, Chairman of Rockwell Medical's Board of Directors. Stuart and Angus will be available for a question and answer session immediately following the call. At this time, I would like to turn the conference call over to Rockwell CEO to Stuart Paul. Stuart?

Thank you, Judy, and good afternoon, everyone. And thank you for joining our call today. I'd like to start today by reminding everyone of Rockwell Medical's mission. We believe we have the potential to transform anemia management in a wide variety of disease states across the globe. And the first disease state that we're focused on is end-stage renal disease, or ESRD, specifically patients on haemodialysis. There are over 2 million people patients across the globe on hemodialysis and nearly 0.5 million in the United States alone. And we believe we have potential to significantly improve the lives of these patients. Now before we get started, I'd like to introduce the new Chairman of Our Board of Directors, John McLaughlin, for a few remarks. John joined our Board in early September, and was recently appointed Chairman. John has over 30 years of senior executive experience in the pharmaceutical industry, serving as CEO of PDL Biopharma for 10 years and Executive Vice President of Genetech. He's previously cofounded and sold, as well as served on the boards of a number of biotechnology and medical technology companies. So we are incredibly fortunate to have an executive of John's caliber on the board, and his experience and advice is already providing benefits to the company. With that, I'll hand the call over to John.

Thank you for the kind words Stuart. I joined this board because of Rockwell's products and team. I asked a lot of questions during the diligence process. And I couldn't be more excited about the answers I got. I joined because Triferic is a medically important therapeutic. Dialysis patients have difficult lives. Medical innovation in this field has been modest at best. The goal of our products is to improve the lives of those patients. If we do that, and we are working hard to develop data to further prove that safety and efficacy of the therapeutic, then its medical importance will make it commercially important, which in turn will create value for shareholders. Dialysis is a very cost sensitive environment. We're also working to develop data showing that the use of Triferic can reduce the need for other, in some cases, expensive medicines administered to these patients. Combined with the data we are collecting on reducing patient complications, we could potentially demonstrate cost savings for the healthcare system as a whole. We also don't want Rockwell's concentrate business to get lost in this discussion. It generates significant revenues and is a very valuable asset that increases the company's financial option. In my previous position, we invested over a billion dollars in pharmaceutical and medical device companies. A key investment criterion is the team. A good product but a weak team is a poor investment, and that's true no matter how good the product is. I applied that same criterion before investing my time in Rockwell. This is a smart, dedicated team. They are working incredibly hard to complete as quickly as possible many projects that should have been finished used years ago through no fault of this team. The fact of the matter is that some are done and more need to be completed. I know that it must be frustrating for our shareholders who've invested for years only to see steep declines in our share price, and hear that we need to do more work to make these therapeutically -- therapeutics medically and commercially important. We share your frustration and disappointment. But we are committed to making these treatments medically important for dialysis patients and commercially important for our shareholders. Unfortunately, the recent efforts of the Board and Management are not being reflected in the share price. We are working to improve our communication so shareholders have better visibility on our progress. To conclude, this is your money, the shareholders' money. We will be prudent students of your capital -- stewards of your capital, excuse me. And with that, let me hand the car back over to Stuart?

Thanks, John. Before I get into the details on the third quarter, I want to comment on our business as a whole and expand upon some of John's comments. We believe we have several valuable assets at Rockwell that will form the basis for the creation of shareholder value. First, we have a unique and differentiated therapeutic platform in Triferic that we believe provides us with significant growth potential over the next three to five years as we seek to disrupt the current standard of care. We believe there's also significant value inherent in our global rights to the Triferic portfolio, which has and will enable us to enter into value creating partnerships across the globe. And second, we have a base haemodialysis concentrates business with $60 million revenue run rate. We have long-term contracts with our two largest customers who represent more than 85% of our product revenues in this business. These contracts give us relatively strong visibility into our sales for the foreseeable future. In addition, this business is a strategic asset for us that gives us relationships with many of the key players in the dialysis industry, and provides us with a variety of financial alternatives as we move forward. And with these two core assets, we have a stable and well developed base to grow from over the next several years. As most of you know, Triferic is a completely novel therapy with a unique mechanism of action. And unlike the current standard of care, traditional IV irons and ESAs, Triferic delivers the iron and maintains the hemoglobin that haemodialysis patients need without increasing ferritin levels, and without the risks of chronic inflammation and adverse events. And we believe this represents one of the most innovative medical advancements in patient iron management in the last two decades. Our goal is to transform the way anemia is managed in ESRD. Once this transformation is complete, and at several points along the way, we expect to deliver significant value for the patients, the medical community, our employees and the shareholders that we serve. We've now built a number of very important relationships with key opinion leaders who understand and are as excited as we are about the transformational potential of Triferic. In fact, just last week at the American Society of Nephrology Kidney Week Conference in Washington, D.C., we sponsored a Triferic exhibitor spotlight presentation by Dr. Jay B. Wish, Chief Medical Officer for dialysis at Indiana University Health, entitled advances in haemodialysis associated anemia management, the benefits of physiologic iron replacement therapy. The presentation was very well attended and there was a great deal of enthusiasm around how Triferic and its various formulations is an important advancement that can benefit the large and growing population of people receiving hemodialysis treatments. And more broadly, we had a strong presence at ASN Kidney Weeks and had productive dialog with dialysis chains, clinicians, key opinion leaders, all about Triferic. We believe the buzz we created at ASN, along with the investments we continue to make in building a leading medical platform and in our commercial organization, will translate to tangible progress in the near and intermediate term. Turning to the third quarter. We are making positive progress in advancing our Triferic product portfolio. I hope that many of you were able to join us for our first quarterly business update call that we held on October 25th. Through a regular cadence of business updates, we intend to best share the progress we're making with our Triferic portfolio as we work to penetrate the anemia management market for dialysis patients. For those who may not have had the opportunity to listen to our business update, let me briefly share with you a couple of headlines that illustrates the positive progress we are seeing, now that we are completed our first full quarter of Dialysate Triferic sales in the United States. As of September 30, 2019, we had contracts with clinics, representing over 1,000 patients on therapy with 13 clinic accounts signed on as purchasing customers. We also had over 1,300 patients at more than 15 clinics involved in various stages of evaluation program. As a reminder, our evaluation program enables clinics to sample Triferic for a period that's generally up to three months, at which point, we begin contracting discussions. Our evaluation program is turning into a critical element of the sales cycle for Triferic. And we are thrilled about the conversion rate we have seen from this program to-date of over 75%. To further support the development and commercialization of Triferic across the globe, we are also strengthening our medical organization. The key elements of this plan include contracting with Centers of Excellence to adopt Triferic, collecting and analyzing real world data, enhancing our medical affairs capabilities and interacting with KOLs, and providing medical education to the dialysis community. As at the end of the third quarter, we had signed our first Center of Excellence, a leading academic institution to purchase Triferic. Contracted with seven clinics to collect real world data and establish formal advisory relationships with 10 key opinion leaders, an excellent start to our long term medical strategy. And as part of this overarching initiative, we plan to announce important additions to our medical organization and our Medical Advisory Board in the coming weeks, including several new world renowned experts in anemia and ESRD, who will be joining our advisory board. And we look forward to their perspectives and guidance as we continue to innovate our portfolio and drive adoption of Triferic. We will share more details with you as appropriate. While we're making very good progress, we're also realistic about the challenge involved in orchestrating a wholesale change in the way anemia is managed in haemodialysis patients. A transformation of this scale will take time to fully execute. But and our ultimate goal remains to establish Triferic as the standard of care over the next three to five years. And we have a solid start and we expect to ramp our growth of new accounts, patients on treatment and revenues at meaningful growth rates as we move forward. On October 31st, CMS issued the ESRD Prospective Payment System final rule for 2020, or the final rule. In the final rules, CMS reiterated their position from the proposed rule released in July that only certain new drug application types will be eligible for separate reimbursement or TDAPA starting next year. The final rule specifically states that Type 3 NDAs, as classified by the FDA, will not be eligible for TDAPA. Accordingly, our interpretation is that under the final rule, IV Triferic will not be eligible for TDAPA, despite the fact that it is an incredibly innovative therapeutic. To be clear, we believe TDAPA would have provided a significant benefit to IV Triferic uptake. Without TDAPA, we believe the launch curve for IV Triferic and the time to peak sales will be slower. However, this does dampen our enthusiasm for the Triferic portfolio, and we still have an incredible opportunity in front of us. We'll continue to invest in generating data to demonstrate the clinical, pharmacoeconomic and health economic outcomes associated with Triferic. And we believe this data will support our goal of disrupting the standard-of-care for anemia management over the next three to five years. And importantly, we believe the cost structure for Triferic enables us to make an attractive gross margin in the bundle, while making this transformational therapy broadly accessible to the patients who need it most. Before I hand the call over to Angus Smith, I want to emphasize that we as management are unhappy about the current share price, but we remain steadfast in our commitment to leverage our valuable assets to create value for all shareholders. So in conclusion, let me reiterate that we're aligning all of our resources, building a leading medical platform, as well as strong and highly skilled commercial capabilities, to achieve our goal across the Triferic portfolio, both in the U.S. and globally. Revenue in these early days is not necessarily a key indicator. Rather, we'll continue to focus on making progress on the adoption metrics, data initiatives and the engagement of KOLs. And if we do that, we believe the revenues will follow. I'll now turn the call over to our CFO, Angus Smith, to review our third quarter financials. Angus?

Thank you, Stuart. Before I discuss financial results for the third quarter of 2019, I would like to comment on a few key themes. First, we have valuable businesses here that we believe give us a solid foundation for growth and financial flexibility as we move forward. Second, over the last several quarters, we have made critical investments in our sales, marketing, medical and R&D efforts with the goal of ensuring the successful development and commercialization of our Triferic portfolio in dialysis. We believe these investments are required to enable us to build the foundation for a sustainable growth platform in the coming year as we execute on our business plans. Finally, we are at the very early stages of an organizational and financial transformation and we believe, we'll create value for our stakeholders. Turning to our third quarter results. Net sales for the third quarter of 2019 were $15.4 million compared to sales of $16.7 million during the three months ended September 30, 2018. Net sales of haemodialysis concentrates to dialysis providers and distributor in the U.S. and abroad were $15.2 million for the three months ended September 30, 2019. The decrease of $1.4 million was primarily due to lower sales to international customers offset by an increase in sales pursuant to company's contract with DaVita. International concentrate sales declined compared to the prior year due to the loss of volume by one of our distributors in certain Latin American countries, which in some cases we believe, was temporary in nature. We have worked with our distributor to regain access in some of these countries, and we are also engaging with them to expand access to our concentrates products in other Latin American countries. Net sales of Triferic were $166,000 for the three months ended September 30, 2019 compared to $68,000 for the three months ended September 30, 2018. For each of the three months ending September 30, 2019 and September 30, 2018, Triferic net sales included approximately $68,000 of deferred revenue recognized under the company's license and Peoples' Republic of China with Wanbang Biopharmaceutical. Triferic net sales for the three months ended September 30, 2019 also included approximately $98,000 of Triferic product sales to U.S. customers. Cost of sales during the third quarter of 2019 was $15.4 million compared to the cost of sales of $14.7 million during the third quarter of 2018. Gross profit decreased by $2 million in the third quarter of 2019 compared to the third quarter of 2018 due primarily to an increase in inventory reserve expense of $1.1 million and a reduction in gross profit for the company's concentrate business, partially offset by increase in gross profit from Triferic product sales. Operating loss for the third quarter of 2029 was $7.9 million compared to $5 million in the third quarter of 2018. The increase in operating loss was due to the decrease in gross profit that I just described, and increase in selling, marketing and R&D expenditures due to the investments we are making in our Triferic portfolio partially offset by a decline in our G&A expenditures. Selling and marketing expenditures were $1.8 million during the third quarter of 2019 compared with $100,000 during the third quarter of 2018. The increase in sales and marketing expense reflects the investments we are making in developing a commercial platform to support the commercial launch of Triferic. General and administrative expenses were $4.6 million during the three months ended September 30, 2019 compared with $6 million during the three months ended September 30, 2018. The decrease of $1.4 million is primarily due to a decrease in legal and other costs associated with various matters, including litigation activities stemming from the departure of certain executives and directors during 2018, partially offset by increases in insurance premiums and certain other costs. Research and product development expenses were $1.5 million for the third quarter of 2019 compared with $800,000 during the third quarter of 2018. The increase was due to the company's commitment to investing in and building our medical capabilities that we mentioned earlier, including generating data from studies and real world use of Triferic to support medical education and development efforts, as well as the expansion of the company's internal medical affair staff. We expect our research and product development expenses will increase in the future due to additional clinical development of Dialysate and IV Triferic, including the commencement of the pediatric trial for Triferic, and various medical initiatives that we have mentioned on this call. Net loss for the third quarter of 2019 was $7.9 million or $0.12 per basic and diluted share compared to net loss of $5 million or $0.10 per basic and diluted share in the third quarter of 2018. As of September 30, 2019, the company had total liquidity of $29 million, including $14.4 million of cash and cash equivalents and $14.6 million of investments available for sale. The total decrease in cash and investments for the quarter was approximately $6.2 million. And net cash used in operating activity for the third quarter of 2019 was approximately $6.9 million. As Stuart mentioned, we believe we have two valuable assets in Triferic and in our Concentrates business that provide us with financial flexibility as we move forward, including potential non-dilutive financing alternatives. I will now turn the call back to Stuart.

Thank you, Angus. In closing, let me reiterate our excitement about the prospects for our business. Triferic is a transformational therapeutic that we believe holds great promise, not only in ESRD but also in a wide variety of other disease states. We have made significant strides this year in bringing Triferic to market and in advancing the IV formulation toward FDA approval, and look to continue that progress as we execute on our strategic goals. Now, we'll open the call to questions. Operator?

[Operator Instructions] Your first question is from Brandon Folkes from Cantor Fitzgerald.

Congratulations on the progress in the quarter. Firstly, any additional color you can provide around the -- how we should think about the launch strategy for IV Triferic now you won't have TDAPA pricing? Should we still think of this as targeting larger clinics? And then I've got 1 follow-up after that.

Well, I think one of the important aspects about the launch of IV Triferic is that in haemodialysis treatments that use solid bicarbonate cartridges or bags, you're going to need to use IV Triferic. So we're targeting, I would say, all segments but particularly accounts that have a need for a solid cartridge or a solid bicarbonate solution. This will have a fairly significant application, both domestically and around the globe.

And then on your business update call, you talked about a longest sales cycle, that's understandable. And you've done a very good job in your conversion to-date. And my question is, in the data that you've mentioned that you're going to collecting. Is this purely related to fewer complications, or is it was it going to be an element of cost saving data around ESAs and IV iron usage? And then, if it is the latter as well, how should we think about the contrary to collect that data given what we saw in the prime study? Thank you.

So the fact is that it is complex to collect real world data, and these are the nature of the projects that we have ongoing right now. We have an array of inclusion-exclusion criteria, and I think I mentioned some of this on the business update call as well. And this can take a bit of time. But we want to make sure that we have an array of data around ESA and IV iron sparing on the top line, as well as cost saving data, hospitalizations. mistreatments, numbers of transfusions, et cetera between the different groups. And so from the standpoint of time, we believe that it does take a bit of time to collect this data. And so as soon as we get through the process, we'll be able to present the results.

Maybe one more if I can, just maybe directed towards Angus. It looked like, from my side, expense management was really good in the quarter. Any color in terms of how we should think about OpEx spending going forward? Thank you.

We haven't provided operating expense guidance, as you know. But a couple of highlights, I'll say, because I know what you're looking at. Our sales and marketing spend has come down a little bit as we've gone through the year. Obviously, as we launched Dialysate Triferic in the second quarter, we had to make a number of upfront investments to support that launch. And I think there's at least part of the reason why you saw some of the spends in sales and marketing be a little bit front loaded this year. On the R&D side, obviously, R&D has also been a bit lumpy as we've gone through this year. One of the main reasons for that is we had the $1.3 million NDA submission fee that we paid to the FDA back in back in Q2, we didn't have that during the third quarter. So we had, R&D spend with more or less in line with where we were in Q2 if you back out the NDA submission fee. We have said that we expect R&D expenses start to go up in it in the coming quarter as we continue the clinical development of IV and Dialysate Triferic, as well as work through the data initiatives that Stuart mentioned. And then G&A, the only other thing I mention is G&A, which we haven't covered. As I said, G&A has come down, because we started to put some of the litigation matters in the rearview mirror here. In Q2, we were fully approved for the deductible under our D&O insurance policy. So some of the noise that's been in our financial results, as a result of those litigation matters, has started to come out of our quarter-to-quarter fluctuation in G&A expense.

Next question is from Chris Raymond from Piper Jaffray.

I just wanted to circle back to the CMS final rule. You know Stuart, I guess, before this rule was made final, I know you guys talked a lot about to go either way. But you still sound kind of surprised even in your -- the language that you use, you very much disagree with the decision. I guess, maybe first of all, should we assume that there's no recourse? Like this is the last final word, there's no sort of appeal process? And then second, what is it -- is there any learning, I guess, in terms of trying to understand exactly where you kind of misread, I guess where CMS's head was with respect to this decision? Thanks.

Chris thanks, good to hear from you. And a tough decision, when you come -- when you take a look at the rule the way it was initially postured, one did not get the sense that Triferic was -- IV Triferic was going to be ineligible for TDAPA. And clearly, we just strenuously object to the use of the FDA, NDA classification scheme, which FDA themselves has essentially said is not representative of the true nature of innovation of the products they approve. So -- and we weren't the only group. There were numerous trade associations and support groups that also felt the same and sent letters. But at the end of the day, it is what it is. I wouldn't say we were surprised. I think that all the while we have modeled our business plans with the notion, as I mentioned, the strong margin that we have with Triferic. From the cost structure point of view, we believe we can still participate very profitably inside the bundle. And at the end of the day, I don't think it precludes continuing discussions with CMS. So when I came on board, my first order of business was to sit down with CMS and we opened -- reopened the door with CMS, I should say. And we kept that door open over the last year. I've been in there probably four or five times. And we have a dialog and they know our positions. And we want to work together on the spirit of innovation in this space. So I don't think it takes away from the nature of the innovation of Triferic and -- which is a very important drug for the space. So hopefully that helps.

It does. One more question. So just on the sort of cash and the runway, you've got going forward. I suppose some of this will come on your Q, but maybe tell us where you stand with respect to the ATM? How much was pulled down in the quarter, if any? And then maybe you've got a number of catalysts, like filings, for example, in China and Canada this year and some other catalysts. Are any of those associated with milestones? I think you mentioned proactively that you had some non-dilutive financing options. So any color you can give on exactly how to go about extending the runway would be great. Thanks.

So first, you asked about cash activity during the quarter, ATM usage. We did not use the ATM at all during the third quarter. The only activity you'll see from a financing point of view reflected in the third quarter is we had about a million dollars of net proceeds associated with the exercise of overallotment marketing financing that came in July, but like I said no use of the ATM. As we go forward, you know you asked about China and Canada. So the China license agreement we have, have a milestone, I think the first real milestone payment associated with that deal is due upon approval. And that's an $8 million milestone that's due on approval and in China, no meaningful milestones to speak of or Canada rather, no meaningful milestones to speak of. But look as we go forward, we think we've got a number of options at our disposal to finance our business plan. We've got two very valuable businesses, as we've mentioned on this call. We've got global rights to Triferic that through both existing and future partnerships has the potential to bring in capital. And we'll look at a variety of different alternatives to fund our business plans as we go forward.

Next question is from Raghuram Selvaraju from H. C. Wainwright. Your line is open.

This is Edward Marks on for Ram. I appreciate you taking the questions. Speaking of some of those international markets, I was wondering how marketing efforts are progressing in Latin America. And just wondering if you consider any stronger international marketing push for IV Triferic, considering in a lot of those markets, there's a higher need and some more favorable economics versus in the U.S.?

And I think, whether you're talking Latin America or around the world, it's been quite obvious to us that the opportunity for IV Triferic in the international markets is quite strong. Again, I think outside the U.S., in particular, there's been a heavy push toward the use of solid bicarbonate cartridges and solid bicarbon, and that just basically fits better with the IV Triferic model for infusion as opposed to using the dialysate version Triferic. Latin America is an attractive market for us. And of course, we distribute concentrates and are always looking at the strategy around leveraging relationships. We have an approval in Peru and we're expecting another one in Chile. And around the world, as Angus just mentioned, from Canada to China and a number of other markets, including Europe and Japan, we're in discussions with potential licensed partners. So I would say in a number of those markets, really the driver will be -- we anticipate the driver will be IV Triferic.

Two more questions, first just on the CMS ruling. I noticed that CMS was also discontinuing the erythropoiesis-stimulating agent monitoring policy. Just wondering how that might affect uptake of Triferic. And then sort of to build on one of the previous questions, I was just wondering in your conversations with CMS. What did they say exactly was lacking in the TDAPA appeal that led them to not grant any of that reimbursement for IV Triferic?

Thanks for the question. Its Angus speaking, I'll take the second question first. I mean, look, the CMS came out in the final rule they provided a lot of Q&A around everybody's comments and then what their response was. I think at the end of the day, they were stuck a bit between a rock and a hard place trying to obviously incentivize innovation, but at the same time limit costs, and I think what ultimately came out of the ruling. And there's a lot of the answers they gave to comments out there that it certainly feels like managing costs was a core part of what they're trying to do here. So they provided -- if you look at our comment letter and the Q&A document they put out that's affiliated with the final rule. So you can see they put specific comments against each of our comments. And so that's all out there how all out there, all out there in the public domain. Again, we think we've got an innovative product here. We're going to continue to do the work we need to do to prove that the real world data exercises that Stuart mentioned, and we're excited about that. And remind your first question.

I just noticed that the ESA monitoring policy was being discontinued as well through the CMS. And just wondering if that has any affect on Triferic uptake, going forward?

I don't -- I mean, again, it's Angus. From a financial point of view, I think what we're trying to show here is obviously if you can reduce the usage of ESA, which is hopefully what our real world data initiative yield for us. I mean, that obviously has a financial benefit. But ESAs also have a black box warning associated with cardiovascular complications. So I think reducing the usage of ESA, regardless of the CMS monitoring policy, has clinical and financial benefits that we think ultimately could benefit Triferic. So we're going to continue to look at that and look at the overall impact of Triferic from a clinical, pharmacoeconomic and health economic outcome perspective.

Okay, that makes sense. And I just wanted to make sure that that was still the case considering. And just as a final question on the base concentrates business, considering a lot of those are marketing focused for these Triferic launches that should be coming up, or have been ongoing. I was just wondering how we should think about the trending revenues for the things concentrates business. It seems to be pretty stable, but just as we go forward, if you could provide any guidance on that.

It's Angus, again. So if you look at the last three quarters or so, it has been fairly stable. Obviously, the year-over-year comparison is slightly unfavorable. We had pretty strong Q3 and Q4 of last year, and that was largely due to sales in the international markets. As I said in my prepared remarks, we've seen a little bit of a pullback in some of those markets, particularly in Latin America. But we're working with our partner and had worked with our partner to get back some of those volumes, and we'll continue to do that. So obviously a lot of the focus is on Triferic. But we think we've got a valuable business here in the concentrates and we're going to continue to work, both within the U.S. and globally, to try to expand that business and improve our margins. And I think you saw in the third quarter we signed a new 4.5 year contract with DaVita with a price increase, I think that's one more example of the types of things we'll continue to work on as we look to grow and improve the margin profile of that business.

I am showing there are no further questions at this time. I would now like to turn the conference back to Mr. Stuart Paul.

Okay. Thanks to all once again for joining us this afternoon.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and have a wonderful day. You may all disconnect.