Rockwell Medical, Inc. (RMTI) Q1 2020 Earnings Report, Transcript and Summary

Good afternoon, ladies and gentlemen, and thank you for standing by. And welcome to the Rockwell Medical 2020 First Quarter Results Call. At this time, all participants’ lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ms. Claudia Styslinger, Investor Relations. Please go ahead, ma’am.

Welcome to Rockwell Medical’s first quarter 2020 earnings results call. This is Claudia Styslinger of Argot Partners, the Investor Relations representative for Rockwell Medical. Joining me from Rockwell Medical on today’s call are Dr. Russell Ellison, President and Chief Executive Officer; Angus Smith, Chief Financial Officer; Dr. Marc Hoffman, Chief Medical Officer; and Tim Chole, Vice President of Marketing. 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. Accordingly, you should not place undue reliance on these forward-looking statements. 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 page. This call is being recorded on May 11, 2020 for audio rebroadcast and can also be accessed on the same webpage. At this time, I would like to turn the conference call over to Rockwell’s Chief Executive Officer, Dr. Russell Ellison. Russell?

Thank you, Claudia. Good afternoon, everyone, and thank you for your time today. It is an honor to be with you in my new role as President and CEO or Rockwell Medical, in addition to my continuing role on the Board of Directors. My charge as CEO is to maximize the potential on our 2 FDA approved products Triferic Dialysate and Triferic AVNU for patients and shareholders by developing Rockwell Medical into a more medically- and scientifically-driven company, which will drive adoption of our products in dialysis and the strategic identification and pursuit of new indications for Triferic and other diseases. I look forward to providing you with an update on our business on our call. Today, we will address our commitment to the hemodialysis community, particularly in light of the COVID-19 pandemic; findings from the Triferic real-world data and retrospective analysis; progress on the commercialization of our 2 FDA approved products; other pertinent corporate updates and a review of our financials; and then, we’ll open up to Q&A. Before we dive in, I want to give you some perspective as to why I joined Rockwell and my vision for the future. Through my role as a Consultant and Board Member, I’ve gained in-depth knowledge of Rockwell and its product. Based on this knowledge and my decades of medical and executive experience in pharma and biotech, I am particularly excited about the potentially transformational attributes of our ferric pyrophosphate citrate or FPC technology platform. As you know, Triferic is the first commercial product from our FPC platform. And I believe Triferic is unlike any other iron product in the market today. It delivers 100% immediately bioavailable iron for patients, unimpeded by inflammation. By virtue of this mechanism of action, I believe our FPC platform holds the potential to deliver meaningful clinical and pharmacoeconomic benefits to patients and healthcare providers, thereby transforming the way iron deficiency is managed across the globe in multiple therapeutic indications. My charge is to actualize this potential of our FPC technology, for patients and for shareholders. And I see opportunity in 2 areas. The first is the ability to transform the way anemia is managed for hemodialysis patients. We now have 2 FDA approved formulations with Triferic for hemodialysis patients that provide us with unique opportunity. I’ve spent a lot of time in the dialysis industry in my career and based on my experience, I believe our Triferic portfolio has the potential to become the standard of care over time. And as I look to the future, my goal is to build and leverage the medical capabilities that Rockwell is establishing, to help accelerate the adoption of Triferic in the hemodialysis setting, because decision making in dialysis is underpinned by medical, scientific, and pharmacoeconomic data. Generating additional clinical and pharmacoeconomic data, including data from our real-world data program will be a critical part of the plan. And we are in fact collecting data on an ongoing basis from the increasing number of clinics. I’m pleased that we are in a position to give investors the first readout from this real-world data program on the call today. Further, I believe that over the course of the next 12 to 24 months, the management of anemia in hemodialysis is going to change, starting with the anticipated introduction next year of HIF-PHIs, which are an alternative to erythropoietin stimulating agents. During my career, I’ve been involved in the development of various therapeutic products including HIF-PHI. And based on my experience, I believe Triferic is well positioned to participation alongside HIF-PHIs to provide a more reliable and physiologic treatment of anemia in hemodialysis patients. The secondary where I see exciting potential for value creation is through the development of ferric pyrophosphate citrate molecule or FPC to treat other medical conditions with unmet clinical needs. I believe that the same attributes that make the molecule attractive in the hemodialysis setting, should enable it to transform the way iron deficiency is managed in a variety of disease states. We have gained a wealth of experience from developing and commercializing Triferic in hemodialysis, which I believe will prove extremely valuable as we look to move into new therapeutic areas outside of the dialysis setting. To that end, we have launched the strategic initiatives to identify and prioritize other therapeutic indications for future development. This is a very exciting project for us. As we look to build out the technology platform and address other disease states where iron plays a critical role. Our call today will be focused on the promise of our business in hemodialysis. And later this year, we will be presenting to you the disease states we intend to explore with information on the commercial potential, clinical feasibility and on the projected time and cost to clinical proof of concept and value creation. I’m joined on the call today by Angus Smith, our Chief Financial Officer; Dr. Marc Hoffman, our Chief Medical Officer, who joined the company in November 2019, as part of our efforts to enhance our medical capabilities; and by Tim Chole, Vice President of Marketing. Tim joined us in December 2019 and has more than 20 years’ experience in marketing life-science products, including traditional IV iron products. Underlying our commitment to the hemodialysis community is our dialysis concentrates business. We are the number 2 supplier of these products in the U.S., from which we generate more than $60 million in annual revenue. While Triferic is clearly the growth and profit driver for our business going forward, the concentrates business allows us to develop and harvest relationships with key customers in the industry and is paving the way for discussions we are having with customers on Triferic. Our response in the face of the COVID-19 pandemic has helped strengthen our relationships with these customers. And I am incredibly proud of the way our organization has rallied over the last 2 months to deliver on our commitment to our customers, which I’ll discuss. The other innovative part of our commitment to dialysis is Triferic, the only FDA approved therapy in the U.S. indicated to replace iron and maintain hemoglobin in hemodialysis patients during each dialysis treatment. It has unique and differentiated mechanism of action, which has the potential to benefit patients and the healthcare system. Triferic delivers iron immediately and maintains hemoglobin in hemodialysis patients without increasing ferritin levels with a safety profile comparable to placebo, and is not associated with iron overload and toxicity. We now have 2 unique formulations of Triferic that our FDA-approved. Triferic Dialysate, which we launched in May 2019 and we were excited to announce their FDA approval of Triferic AVNU or IV Formulation just a few weeks ago. Triferic AVNU enhances the Triferic platform, and that it provides patients with greater access to our innovative therapeutics by expanding administrative options for clinicians, and is an excellent formulation for the development of new indications. We plan to introduce Triferic AVNU in the United States later this year. As I mentioned earlier, I’m proud of the way our company has responded to the COVID-19 pandemic. And I want to say a few word about the impact of the virus on our industry and business. As everyone knows, the world is facing an unprecedented challenge and managing the crisis. The dialysis industry has faced some unique challenges in the face of the pandemic, because many patients are already carrying multiple comorbidities, and patient lives are quite literally dependent on the treatment they receive 3 times per week. Furthermore, one of the downstream impacts of COVID-19 can be multiple organ failure, including kidney failure, and this has put further stress on both acute and outpatient dialysis clinics. At times like this, our role in supporting healthcare providers and patients is absolutely critical. While we are still in the middle of the crisis, and it’s hard for us to predict the timing of when the world returns to a new normal, let me offer a few thoughts on the impact to our business. First, we’ve seen no disruption to our supply chain for either concentrates or Triferic. In fact, we’ve been able to work with our customers to fulfill small pockets of higher demand for our concentrates, where certain clinics are seeking to build safety stock in the face of the crisis or facing shortages on certain products from other suppliers. Second, because of the fragile nature of dialysis patients, clinics have more or less closed the doors to non-essential vendors including our sales representatives, and nurse educators, and have paused any significant change in protocols to focus on managing the crisis. This has impacted our ability to continue the promotion of and the medical education efforts for Triferic, though, we have been working to continue our efforts virtually where possible. We are also closely evaluating the potential impact of the COVID-19 outbreak across the globe on our regulatory clinical development timeline, particularly in China and in India. Finally, I’d like to applaud the efforts of all essential workers. And those on the frontlines working in dialysis clinics to ensure patients receive their life saving therapies. In particular, I am proud of the extraordinary efforts of our manufacturing and distribution employees who come to work every day to make sure that we are following through on our commitments to the dialysis industry and patients and standing with the industry in the face of the crisis. Now turning to some of the highlights of the first quarter, net sales were $15.9 million, representing our highest sales since Q4 2018. For Triferic Dialysate, we ended the quarter with nearly 2,000 patients on therapy, representing nearly 300,000 annualized treatments. Our active and committed evaluation programs for Triferic Dialysate now represent 36 independent and small dialysis organization clinics, a 260% increase from December 31, 2019, and Tim will provide additional details on the launch metrics later in the call. The first quarter also saw 2 significant events for Rockwell Medical. The FDA approval of Triferic AVNU, as I’ve mentioned, and our licensing of Triferic rights in India to Sun Pharma. We were also thrilled to add Bob Radie to our Board of Directors, Bob’s significant executive, commercial, business development and clinical development experience will be a great asset to Rockwell Medical, as we execute on our business plan. Finally, I want to highlight the progress we’ve made in building out our real-world data program for Triferic. Through my work on the board, and since I’ve joined the company as CEO, it’s become clear that our commercial team can benefit from additional tools to supplement our clinical trial data to demonstrate the potential benefits of Triferic. One of these tools that is frequently requested by prospective customers is the real-world experience of other customers, particularly as it relates to clinical and pharmacoeconomic measures. We’ve continued to add clinics to the program, and we now have 12 clinics from which we are collecting data, a 50% increase from December 31, 2019. With this in mind, I am excited to say we are ready to present the first readout from our real-world data program on this call. And I hope this will be the first of many updates on this front. With that, let me turn the call over to our Chief Medical Officer, Dr. Marc Hoffman to review the data. Marc?

Thank you, Russell. I’m excited to be presenting the initial readout from our real-world data program today. As Russell mentioned, the collection analysis and presentation of real-world data is incredibly important for Rockwell. But first, let me put this in the context of the overall program. As Russell mentioned, we are now collecting data from 12 dialysis clinics in the U.S. and one of my top priorities since joining the company has been to develop a plan to collect and analyze these data. We believe that the output from this program has the potential to enhance the commercial, medical and business development discussions that are critical to driving adoption for Triferic across the globe in years to come. Today’s presentation is just the first of what we hope will be several meaningful readouts from this program. Today, I will be presenting data from an independent dialysis clinic that adopted Triferic in early 2017. The clinic has approximately 65 patients at any given point in time and provided us with various clinical, lab, drug utilization and quality of life metrics for their patients before and after they adopted Triferic. We are presenting data from a baseline period of 3 months prior to their switch to Triferic to 18 months following the adoption of Triferic. In randomized well-controlled clinical trials like those used to generate registration data, patients are selected using highly specific eligibility criteria, which are not fully reflective of real-world practice. In contrast, real-world data is uncontrolled and unfiltered. The data presented here is all-comer data representing the real-world experience at this site. This is not constrained by clinical trial protocols or schedules, or any patient selection criteria, nor did Rockwell have any input into the clinics and immune management practices. In fact, it included patients who would traditionally be considered outliers in data analysis; for example, patients with an active infection, bleed or patients who are [party] [ph] hospitalization. To assure objectivity in our observations, all data and graphs were developed by an independent statistician. It is important to note that the results represented here were observed that a single independent clinic of approximately 65 patients and may not be representative of results are different practices and procedures were used. At a high level, what we’ve observed through the analysis is that following the adoption of Triferic, the clinic saw a substantial reduction in ESA utilization at 15 to 18 months, and more than 70% reduction in traditional IV iron utilization. Against the background of these reductions, we also observed stable to increase in hemoglobin levels, the decrease in missed treatments and improvements in key quality of life indicators. Turning to the specifics of ESA utilization, we looked at the change in the average weekly dose per patient. Of note, we saw 16% reduction in the average weekly ESA dose per patient in the fifth quarter following transition to Triferic and increasing to 23.2% reduction in the average ESA dose per patient, per week, during the sixth quarter following the transition. This in a clinic that uses a long-acting ESA, [low erythropoietin] [ph] alpha for anemia, where those changes are infrequent, and which may contribute to the elapsed time to change in utilization. We also looked at the change in traditional IV iron dosing, both total and on a per patient, per week basis. This particular clinic utilizes sodium ferric gluconate as their traditional IV iron product. What we observed was fairly rapid, large and sustained decline in traditional IV iron utilization in the first quarter following the adoption of Triferic. We observed the 74% reduction in the average dose per patient, per week. Furthermore, during this period, serum ferritin levels decreased by over 13% in the first year, and greater than 16% compared to baseline at the end of the observation period. In terms of hemoglobin, during the baseline period, patients had every hemoglobin within the target range of 10 to 11 grams per deciliter within 6 months of Triferic adoption, hemoglobin levels increased to 10.5 grams per deciliter, and continued to rise to 10.8 grams per deciliter throughout the observation period. These changes are noteworthy as they occur concurrently with observed reductions in both IV iron and ESA utilization. And importantly, studies have shown that improvements in hemoglobin levels for hemodialysis patients are associated with improvement in quality of life. We also looked at the trend in missed dialysis treatments by patient. Importantly, missed treatments can have a significant impact on clinic profitability, as clinics lose out on the revenue from a patient visit, but have fixed labor and facility costs that they are forced to absorb. During the observation period, the average number of patient visits per quarter was 2,475 clinic visits per quarter. What we observed is that following the switch to Triferic, there was a reduction in the percentage of total potential missed treatments from 7.9 during the baseline period to 4.3 by the sixth quarter following the switch. A reduction of 45% in total missed treatments in the sixth quarter following the switch. Finally, we were very fortunate that this clinic was able to provide us with quality of life measures pursuant to the KDQOL-36 tool that was adopted by CMS. Not all clinics are able or willing to provide these data to us. So this presented us with the unique opportunity to look at trends and quality of life measures following the adoption of Triferic. Importantly, studies have shown that a patient’s perception of their physical and mental function is closely tied to patient outcomes. To provide you with a little more detail on what is measured as part of the KDQOL-36. This is validated instrument which measures patient’s perceptions of quality of life across 5 different axis. Physical and mental summaries, which measures general health activity limits, ability to accomplish desired tests, depression and anxiety, energy level and social activities. The burden of kidney disease assesses how much kidney disease interferes with daily life. Problems of kidney disease assesses symptoms associated with their underlying disease, such as sore muscles, itchier dry skin, or lack of appetite and feeling washed out or drained. Finally, effects of kidney disease on daily life, measures the impact of their disease on day-to-day life, such as their ability to work around the house or travel. Each of the KDQOL-36 kidney targeted scales are scored on a 100 point scale, with higher scores indicating better quality of life. We observed improvements on each of the component scores, and on the composite score year-over-year. The dialysis outcomes and practice patterns study, DOPPS, looks at patients who are on dialysis around the world. While this data is highly subjective, DOPPS found a strong correlation between how people feel their quality of life and how well they do on dialysis. So today, we presented data from a single independent dialysis clinic prior to in 12 to 18 months after the introduction of Triferic into their anemia management protocol. The strengths of this study are the unbiased data extraction from the electronic medical record, allowing the examination of longitudinal hemoglobin, ESA and IV iron as used in the uncontrolled setting. The study is limited by its observational nature. This observational study demonstrates that following implementation of Triferic Dialysate at each treatment, the clinic maintained hemoglobin concentration and reduced traditional IV iron use by more than 70%. Additionally, ESA use decreased by greater than 20% over time, and there are trends for improvements in patient outcomes, as well as a reduction in this treatments. The results presented cannot be generalized to other dialysis clinic settings with a different patient mix, but interestingly, are consistent with the observations in the controlled clinical trials for Triferic, CRUISE and PRIME. Rockwell is collecting and committed to analyzing data from an increasing number of clinics to further strengthen our database of real-world data. With that, I’ll hand the call over to Tim Chole to discuss commercial metrics and Triferic AVNU launch plan. Tim?

Thanks, Marc. I’m Tim Chole, Vice President of Marketing at Rockwell. I joined the company in December 2019. I’ve spent more than 23 years in the pharmaceutical and medical device industry, including some experience serving as marketing head for the IV iron portfolio at Watson pharmaceuticals, where we launched Ferrlecit, a traditional IV iron product that’s used to treat anemia and dialysis patients. So with that introduction, I’ll dive into some of the details of our Triferic Dialysate metrics for the first quarter. As of March 31, 2020, we had nearly 2,000 contracted patients on therapy are representing approximately 300,000 annualized treatments. In the quarter, we signed 4 new contracts with dialysis clinics to adopt Triferic Dialysate. The conversion to new contracts, particularly from our MDO contract were impacted by the emergence of the COVID-19 pandemic in the U.S. in March. With our MDO customer, we had 8 clinics trained on Triferic administration and approved for adoption in mid-March that held off on converting, so that as for all dialysis clinics, they could focus on protocols to protect their staff and patients in the face of the COVID crisis. And we had another 4 clinics in the queue for administration training in March that were not able to complete the training due to the pandemic. Our active or committed evaluation programs with independent dialysis clinics and small dialysis chains now represent 36 clinics and more than 2,250 patients. That’s a 260% increase from December 31, 2019. So we’re very pleased with the strong performance of the program during the first quarter. And the increase in the number of clinics committed to these programs is largely attributable to the progress we’re making with prospective customers who own multiple clinics. Evaluation programs have now been active for 3 full quarters since product launch, and allow clinics to sample the Triferic Dialysate for 3 month period. Our clear observation today is that a significant majority of the clinics you’ve gained experience with Triferic tend to stay with our product, as evidenced by the 75% conversion rate from evaluation programs on to commercial contracts. And while COVID-19 has presented challenges to commercial companies throughout our including our company, we have equipped our field force with tools to continue to communicate virtually with customers. So between the substantial growth in our evaluation programs, and our continued efforts to maintain communications with our customers, we expect to see a reacceleration of adoption of Triferic as the COVID-19 pandemic begins to resolve and U.S. states reopen for business. Next, I’ll turn to Triferic AVNU or IV Formulation of Triferic. As Russell mentioned earlier, we were thrilled to announce the FDA approval of Triferic AVNU in March. With this approval Triferic AVNU joins Triferic Dialysate as the only FDA-approved products indicated to replace iron and maintain hemoglobin in adult patients with hemodialysis-dependent chronic kidney disease. Triferic AVNU is designed for intravenous administration to adult hemodialysis patients, and enhances the Triferic platform by providing patients with greater access to our innovative therapeutic by expanding administration options for clinicians. The therapy allows dialysis centers to administer Triferic to patients regardless of the mode of bicarbonate delivery being used. And thus is more appropriate in cases where the hemodialysis clinic is using dry bicarbonate. In terms of the launch plan for Triferic AVNU, we are beginning our outreach to prospective customers to increase awareness of the impending launch. Currently, this includes reaching out to customers who have expressed interest in Triferic already in the past, but have been unable to adopt it due to their use of dry bicarbonate technology. We’re also starting to engage with dialysis organizations that we have existing established contracts with for Triferic Dialysate to set the stage for adding Triferic AVNU to those agreements. So that their clinics who utilize dry bicarbon systems can have access to Triferic. At the same time, of course, we are preparing integrated marketing communications and educational programs that we will launch to signal commercial availability of products later this year. In parallel, we are manufacturing both sample and commercial product with the final FDA-approved label and brand name. We waited for the approval to manufacturer rather than manufacturing product at risk. And in the end, this decision saved us several hundred thousand dollars in potential inventory write-offs. Once we have the product available, we will apply the learnings from our launch of Triferic Dialysate and initiate evaluation programs for prospective customers expect to be in a position to initiate these programs during the third quarter. Evaluation programs will be nearly identical to what we’ve rolled out for Triferic Dialysate. Clinics will have access to free samples for 3 months. During the 3 months, we’ll schedule lab reviews with the clinics at 30, 60 and 90 days to evaluate the impact of Triferic, while also assuring proper training and education of the clinic staff. In parallel, we’ll begin to negotiate commercial contracts with the clinics so that we are ready to onboard them as paying customers once their 3 month evaluation is complete. Accordingly, following the launch of the evaluation programs in Q3, we plan to commence commercial sales of Triferic AVNU in the fourth quarter of 2020, as the first targeted clinics for early adoption reached that 3-month completion point in their valuation program. In terms of reimbursement, we continue to anticipate the Triferic AVNU will be reimbursed within the ESRD bundle that has been established by CMS for Medicare patients. It is also increasingly prevalent for Medicaid patients. But importantly, we believe the cost structure for Triferic AVNU enables us to make an attractive gross margin, while ensuring that this transformational therapy is broadly accessible to the patients who need it most. We look forward to providing more detail on our commercial plans and progress in the coming months. And with that, I will turn it over to Angus Smith, our CFO for a review of our first quarter financials. Angus?

Thank you, Tim. Turning now to our first quarter results. The more fulsome description of our results can be accessed in both the press release we issued this afternoon, as well as our 10-Q filing for the quarter. And I would encourage investors to read our detailed disclosures for a more complete understanding of our financial results. I’d like to start by highlighting our liquidity position as of the end of the first quarter, which is as strong as it has been in several years. During the fourth quarter of last year, we embarked on a plan to position the company to improve our balance sheet and provide us with capital we need to execute on our business plan, and achieve the milestones that we believe will create shareholder value. To that end, we were successful in attracting over $30 million of capital to Rockwell during the first quarter, most of which was non-dilutive. We ended the quarter with cash, cash equivalents and investments available for sale of $48.9 million, compared to approximately $26 million on December 31, 2019. Cash used in operating activities was $6.5 million during the first quarter of 2020. The balance sheet was strengthened by a debt financing agreement with Innovatus Capital Partners announced in March 2020, as well as the underwritten public offering of the company’s common stock in February 2020 for gross proceeds of approximately $8.1 million before deducting underwriting discounts. We drew $22.5 million on the loan facility at closing and have access to another $12.5 million, subject to the satisfaction of certain milestones and conditions. Additionally, we have approximately $35 million remaining under our at-the-market equity offering facility, pursuant to which we may sell, at such times and amounts that we deem appropriate, shares of common stock to support our business plan, subject to certain restrictions on use. Turning to the income statement, net sales for the first quarter of 2020 were $15.9 million, an increase of 2%, compared to net sales of $15.6 million for the first quarter of 2019. The increase was primarily due to an increase in U.S. product sales of Triferic Dialysate as a result of the commercial launch in May 2019. Cost of sales in the first quarter of 2020 was $14.7 million, resulting in a gross profit of $1.1 million, compared to cost of sales at $14.6 million and a gross profit of $1 million during the first quarter of 2019. Gross profit increased in the first quarter of 2020 compared to the first quarter of 2019, due primarily to an increase in U.S. product sales of Triferic Dialysate as a result of the commercial launch in May 2019. Operating loss for the first quarter of 2020 improved to $8.1 million from $8.8 million in the first quarter of 2019. The improvement in operating loss was driven primarily by a reduction in operating expenses, which included a $1 million reduction in selling and marketing expenses, a $900,000 reduction in G&A expenses, partially offset by a $1.3 million increase in R&D expenses. The decline in our sales and marketing expenses year-over-year are largely a result of the upfront investments we made during the first quarter of 2019 to support the launch of Triferic Dialysate, and were partially offset by our continuing investments in our sales and marketing infrastructure for Triferic. The decrease in G&A expenses was driven primarily by a reduction in legal cost associated with various litigation matters that have now been settled and lower stock-based compensation and consulting costs. By the way, the increase in R&D expenses reflects the investments we are making to enhance our medical platform and generate data to support our Triferic and FPC platform, including the data that we presented earlier on this call. Net loss in the first quarter of 2020 was $8 million or $0.12 per basic and diluted share, compared to a net loss for the first quarter of 2019 of $8.7 million or $0.15 per basic and diluted share. An additional area that is important to our company going forward is our international and business development activities for Triferic. A significant objective to the company is to increase access to Triferic in international markets. And as we do this, we see an opportunity to create value for our shareholders. Importantly, we believe that real-world data that we are generating for Triferic, some of which was presented on the call earlier today, has the potential to help us accelerate some of the business development discussions we are having around the globe. During the first quarter, we entered into exclusive license and supply agreements with Sun Pharma for the rights to commercialize Triferic in India. India is a potentially attractive market for Triferic with over 120,000 hemodialysis patients. As a next step, we expect Sun Pharma will meet with regulators in India to determine a pathway to regulatory approval, which may or may not require a clinical study. We initially expected this meeting to occur in April, but it has been postponed during the COVID-19 outbreak and will hopefully occur during the second quarter. In China, we are working diligently with our partner, Wanbang Biopharmaceutical to initiate a trial for Triferic to support a filing for regulatory approval. We expect that this study will be initiated later this year, pending the resolution of the COVID-19 outbreak in China. Access to hemodialysis in China has continued to increase at a rapid rate in recent years with over 600,000 hemodialysis patients in China, making it the largest single market in the world. We remain excited about the potential for Triferic in China and we expect to participate meaningfully in the commercial opportunity if Triferic is approved with an effective royalty in the low- to mid-20% range of product sales. We’re also on the cusp of filing our new drug submission for Triferic AVNU in Canada, which is facilitated by the recent approval of Triferic AVNU in the U.S. In South America, we are awaiting a regulatory approval decision for Triferic Dialysate in Chile and progressing towards the commercial launch of Triferic Dialysate in Peru with our distribution partner there. In both of these markets, we received a transfer price on Triferic sold to the distributor. We are also continuing discussions for licensing Triferic in other geographies, such as Europe and Japan. And as I mentioned, we expect to leverage some of the real-world data that was presented on this call and discussions with prospective partners to highlight potential pharmacoeconomic and health-economic benefits that may be observed with Triferic. We believe that both of these markets will require clinical studies for Triferic to facilitate regulatory approval, and accordingly, the due diligence and discussions we are having are inherently more complex in some of the markets where we are already partnered. I’ll now turn the call back to Russell. Russell?

Thank you, Angus. I’ll now open up the line to questions.

Hi. Thanks for taking my questions and congratulations on the progress during the quarter. Firstly, can you talk about where you see IV Triferic with Dialysate Triferic fitting into the treatment paradigm, once they are both launched? Any change from the prior strategy? And then, secondly, how should we think about revenue conversion once the trial period with the clinics are over? Would these clinics be converting their whole operations to your product? Or would it be just for certain patients? Thank you.

Yeah, thanks a lot. I didn’t quite catch your second question. But Marc will take your first one – sorry, Tim will take your first one, and then, perhaps after that, if you could repeat the second part of your question.

Great. This is Tim. Yes, I’m happy to take the question. So, thank you for that question. We believe the opportunity for IV Triferic or Triferic AVNU is significant. About 25% of the current U.S. market, we estimate utilizes solid bicarbonate systems, which is about 20 million hemodialysis treatments per year. And that number is increasing as clinics shifts to machines that use solid bicarb technology. And that’s really where we will be focusing for promotion of Triferic AVNU for patients that are treated there. Our current customers are all using liquid bicarbonate with Triferic Dialysate. And they’re quite happy with the convenience that they get from this formulation and mixing with our powder packet. And we don’t anticipate those customers to be interested in the IV formulation. So really, we separate these 2 target markets and look at this as incremental opportunity for Triferic AVNU.

And what was the second part of your question? I’m sorry about that.

So post the evaluation programs that you have implemented are clinics shifting the standard operating procedure to cross to Triferic or would this be on a sort of patient-by-patient basis, where they decide to go forward with Triferic?

I’ll take this. Actually, they’re shifting to have – with rare exceptions, to have multiple managements of iron going on in the same clinic. It’s ergonomically difficult for them. So they do like to be consistent across all patients unless there is a specific medical reason for a given patient not to do it; hence, the idea of the Evaluation Program and hence the idea of having protocols created for that clinic by that clinic to use Triferic. And it’s those protocols that have been somewhat delayed by the COVID epidemic, because they’re so focused on preventing infection in their staff and their patients and the protocols around that.

Great, thank you very much.

Okay.

Thank you. And our next question comes from Ram Selvaraju with HC Wainwright. Your line is open.

Hi, this is Blair Cohen on for Ram. Just one for me, what is the receptivity been like thus far for Triferic AVNU among physicians and dialysis providers?

Tim?

Yeah, sure. Thanks for that question. So we have many customers that have expressed interest in Triferic AVNU. And as I mentioned, we are just beginning to create awareness of this product, following the FDA approval amongst our customer base. The interest really is coming from customers that utilize exclusively solid bicarbonate technology and have a strong interest in Triferic. The benefits it can bring because of its unique pharmacokinetic profile, but haven’t been able to use the product. So we do have a pipeline of customers that are interested for that reason. And again, now with Triferic AVNU as soon as we start the evaluation programs, we’ll be able to start using it. So receptivity has been good. And again, we’re just starting to generate awareness about the approval, and expand our efforts and talking to customers in preparation for the evaluation programs.

Perfect. Thanks, guys.

Thank you. And I’m showing no further questions. I’d like to turn the call back to Dr. Ellison for closing remarks.

Yes, thank you. And thanks, everybody, for participating. It’s been a privilege to present our quarterly update to you. And I want to thank my colleagues, Marc, Tim and Angus for their participation, and you for your time and attention. And I look forward to the next opportunity to update you on our company. Have a great day and stay safe.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.