Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | ROCKWELL MEDICAL, INC. | |
Entity Central Index Key | 1041024 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 50,269,383 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
ASSETS | ||
Cash and Cash Equivalents | $63,332,646 | $65,800,451 |
Investments Available for Sale | 19,997,509 | 19,927,310 |
Accounts Receivable, net of a reserve of $53,000 in 2015 and $52,000 in 2014 | 4,665,831 | 4,472,002 |
Inventory | 5,196,006 | 3,920,185 |
Other Current Assets | 813,503 | 587,201 |
Total Current Assets | 94,005,495 | 94,707,149 |
Property and Equipment, net | 1,401,292 | 1,496,912 |
Intangible Assets | 290,929 | 332,686 |
Goodwill | 920,745 | 920,745 |
Other Non-current Assets | 542,223 | 542,224 |
Total Assets | 97,160,684 | 97,999,716 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Accounts Payable | 5,137,855 | 5,294,515 |
Accrued Liabilities | 4,863,079 | 4,325,997 |
Customer Deposits | 338,792 | 183,890 |
Total Current Liabilities | 10,339,726 | 9,804,402 |
Deferred License Revenue | 18,999,293 | 19,492,520 |
Shareholders' Equity: | ||
Common Shares, no par value, 50,269,383 and 50,284,007 shares issued and outstanding | 251,766,056 | 249,018,189 |
Accumulated Deficit | -183,816,920 | -180,117,726 |
Accumulated Other Comprehensive Income (Loss) | -127,471 | -197,669 |
Total Shareholders' Equity | 67,821,665 | 68,702,794 |
Total Liabilities And Shareholders' Equity | $97,160,684 | $97,999,716 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
CONSOLIDATED BALANCE SHEETS | ||
Allowance for reserve, accounts receivable (in dollars) | $53,000 | $52,000 |
Common Shares, par value (in dollars per share) | $0 | $0 |
Common Shares, shares issued | 50,269,383 | 50,284,007 |
Common Shares, shares outstanding | 50,269,383 | 50,284,007 |
CONSOLIDATED_INCOME_STATEMENTS
CONSOLIDATED INCOME STATEMENTS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CONSOLIDATED INCOME STATEMENTS | ||
Sales | $13,883,961 | $12,963,652 |
Cost of Sales | 11,571,618 | 11,283,694 |
Gross Profit | 2,312,343 | 1,679,958 |
Selling, General and Administrative | 5,325,761 | 4,090,199 |
Research and Product Development | 799,591 | 4,615,197 |
Operating Income (Loss) | -3,813,009 | -7,025,438 |
Interest and Investment Income, net | 113,815 | 74,215 |
Interest Expense | 854,303 | |
Income (Loss) Before Income Taxes | -3,699,194 | -7,805,526 |
Net Income (Loss) | ($3,699,194) | ($7,805,526) |
Basic Earnings (Loss) per Share (in dollars per share) | ($0.07) | ($0.20) |
Diluted Earnings (Loss) per Share (in dollars per share) | ($0.07) | ($0.20) |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net Income (Loss) | ($3,699,194) | ($7,805,526) |
Unrealized Gain on Available-for-Sale Investments | 70,198 | 33,860 |
Comprehensive Income (Loss) | ($3,628,996) | ($7,771,666) |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | COMMON SHARES | ACCUMULATED DEFICIT | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | Total |
Balance at Dec. 31, 2014 | $249,018,189 | ($180,117,726) | ($197,669) | $68,702,794 |
Balance (in shares) at Dec. 31, 2014 | 50,284,007 | 50,284,007 | ||
Increase (Decrease) in Shareholders' Equity | ||||
Net (Loss) | -3,699,194 | -3,699,194 | ||
Unrealized Gain (Loss) on Available-for-Sale Securities | 70,198 | 70,198 | ||
Issuance of Common Shares | 918,884 | 918,884 | ||
Issuance of Common Shares (in shares) | 125,166 | |||
Stock Option Based Expense | 1,215,369 | 1,215,369 | ||
Restricted Stock Amortization | 2,077,215 | 2,077,215 | ||
Restricted Stock Tendered in Satisfaction of Tax Liabilities | -1,463,601 | -1,463,601 | ||
Restricted Stock Tendered in Satisfaction of Tax Liabilities (in shares) | -139,790 | -139,790 | ||
Balance at Mar. 31, 2015 | $251,766,056 | ($183,816,920) | ($127,471) | $67,821,665 |
Balance (in shares) at Mar. 31, 2015 | 50,269,383 | 50,269,383 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash Flows From Operating Activities: | ||
Net (Loss) | ($3,699,194) | ($7,805,526) |
Adjustments To Reconcile Net Loss To Net Cash Used In Operating Activities: | ||
Depreciation and Amortization | 207,858 | 257,761 |
Share Based Compensation- Employees | 3,292,584 | 2,174,212 |
Restricted Stock Tendered in Satisfaction of Tax Liabilities | -1,463,601 | |
Amortization of Debt Issuance Costs | 113,529 | |
Non-cash Interest Expense | 112,529 | |
Loss on Disposal of Assets | 2,424 | 1,662 |
Changes in Assets and Liabilities: | ||
(Increase) Decrease in Accounts Receivable | -193,829 | 477,866 |
(Increase) in Inventory | -1,275,821 | -110,180 |
(Increase) in Other Assets | -226,301 | -243,936 |
(Decrease) in Accounts Payable | -156,661 | -3,552,886 |
Increase (Decrease) in Other Liabilities | 691,984 | -1,790,208 |
Deferred License Revenue | -493,227 | |
Changes in Assets and Liabilities | -1,653,855 | -5,219,344 |
Cash (Used In) Operating Activities | -3,313,784 | -10,365,177 |
Cash Flows From Investing Activities: | ||
Purchase of Investments Available for Sale | -2,000,000 | |
Purchase of Equipment | -77,705 | -329,882 |
Proceeds on Sale of Assets | 4,800 | |
Cash (Used In) Investing Activities | -72,905 | -2,329,882 |
Cash Flows From Financing Activities: | ||
Proceeds from the Issuance of Common Shares and Purchase Warrants | 918,884 | 1,474,725 |
Cash Provided By Financing Activities | 918,884 | 1,474,725 |
Increase (Decrease) In Cash | -2,467,805 | -11,220,334 |
Cash At Beginning Of Period | 65,800,451 | 11,881,451 |
Cash At End Of Period | 63,332,646 | 661,117 |
Supplemental Cash Flow disclosure | ||
Interest Paid | $628,244 |
Description_of_Business
Description of Business | 3 Months Ended |
Mar. 31, 2015 | |
Description of Business | |
Description of Business | |
1. Description of Business | |
Rockwell Medical, Inc. and Subsidiary (collectively, “we”, “our”, “us”, or the “Company”) is a fully-integrated pharmaceutical company targeting end-stage renal disease and chronic kidney disease with innovative products and services for the treatment of iron deficiency, secondary hyperparathyroidism and hemodialysis. We are also an established manufacturer and leader in delivering high-quality hemodialysis concentrates/dialysates to dialysis providers and distributors in the United States and abroad. | |
We are currently developing unique, proprietary renal drug therapies. These novel renal drug therapies support disease management initiatives to improve the quality of life and care of dialysis patients and are designed to deliver safe and effective therapy, while decreasing drug administration costs and improving patient convenience and outcome. We have obtained global licenses for certain dialysis related drugs which we are developing and planning to market. | |
We manufacture, sell and distribute hemodialysis concentrates and other ancillary medical products and supplies used in the treatment of patients with End Stage Renal Disease, or “ESRD”. We supply our products to medical service providers who treat patients with kidney disease. Our products are used to cleanse patients’ blood and replace nutrients lost during the kidney dialysis process. We primarily sell our products in the United States. | |
We are regulated by the Federal Food and Drug Administration (“FDA”) under the Federal Drug and Cosmetics Act, as well as by other federal, state and local agencies. We obtained FDA approval of TrifericTM our branded dialysis iron maintenance therapy drug, in January 2015. We have also received 510(k) approval from the FDA to market hemodialysis solutions and powders and, to sell our Dri-Sate Dry Acid Concentrate product line and our Dri-Sate Mixer. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Summary of Significant Accounting Policies | ||||||
Summary of Significant Accounting Policies | ||||||
2. Summary of Significant Accounting Policies | ||||||
Basis of Presentation | ||||||
Our consolidated financial statements include our accounts and the accounts for our wholly owned subsidiary, Rockwell Transportation, Inc. All intercompany balances and transactions have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America, or “GAAP,” and with the instructions to Form 10-Q and Securities and Exchange Commission Regulation S-X as they apply to interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The balance sheet at December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. | ||||||
In the opinion of our management, all adjustments have been included that are necessary to make the financial statements not misleading. All of these adjustments that are material are of a normal and recurring nature. Our operating results for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. You should read our unaudited interim financial statements together with the financial statements and related footnotes for the year ended December 31, 2014 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 includes a description of our significant accounting policies. | ||||||
Revenue Recognition | ||||||
We recognize revenue at the time we transfer title to our products to our customers consistent with generally accepted accounting principles. Generally, we recognize revenue when our products are delivered to our customer’s location consistent with our terms of sale. We recognize revenue for international shipments when title has transferred consistent with standard terms of sale. | ||||||
The initial payment received from our long-term Distribution Agreement has been deferred and classified as deferred license revenue. Deferred license revenue is being recognized based on the proportion of product shipments to Baxter Healthcare Corporation (“Baxter”) in each period to total expected sales volume for the term of the agreement. | ||||||
We require certain customers, mostly international customers, to pay for product prior to the transfer of title to the customer. Deposits received from customers and payments in advance for orders are recorded as liabilities under Customer Deposits until such time as orders are filled and title transfers to the customer consistent with our terms of sale. | ||||||
Cash and Cash Equivalents | ||||||
We consider cash on hand, money market funds, unrestricted certificates of deposit and short term marketable securities with an original maturity of 90 days or less as cash and cash equivalents. | ||||||
Investments Available for Sale | ||||||
Investments Available for Sale are short-term investments, consisting of investments in short term duration bond funds, and are stated at fair value based upon observed market prices (Level 1 in the fair value hierarchy). These funds generally hold high credit quality short term debt instruments. These instruments are subject to changes in fair market value due primarily to changes in interest rates. The fair value of these investments was $19,997,509 as of March 31, 2015. Unrealized holding gains or losses on these securities are included in accumulated other comprehensive income (loss). Realized gains and losses, including declines in value judged to be other-than-temporary on available-for-sale securities are included as a component of other income or expense. Gross unrealized gains were $23,839 and gross unrealized losses were $151,310 as of March 31, 2015. There were no realized gains or losses in the first quarter of 2015. | ||||||
The Company has evaluated the near term interest rate environment and the expected holding period of the investments along with the duration of the fund portfolios in assessing the severity and duration of the potential impairment. Based on that evaluation the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2015. | ||||||
Research and Product Development | ||||||
We recognize research and product development expenses as incurred. We incurred product development and research costs related to the commercial development, patent approval and regulatory approval of new products, including our recently FDA approved iron delivery maintenance drug, Triferic™, aggregating approximately $0.8 million and $4.6 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||
We submitted our NDA for TrifericTM to the FDA on March 24, 2014 and paid the standard new drug application fee under the Prescription Drug User Fee Act of $2,169,100. The Company sought qualification as a small business in order to waive the fee, however, the application to obtain the waiver was denied by the Small Business Administration. The Company subsequently appealed that determination and on June 9, 2014, the waiver was granted. The NDA fee was recognized as an expense in the first quarter of 2014, and that expense was reversed in the second quarter of 2014 upon notification of the successful appeal. | ||||||
Share Based Compensation | ||||||
We measure the cost of employee services received in exchange for equity awards, including stock options, based on the grant date fair value of the awards in accordance with ASC 718-10, Compensation — Stock Compensation. The cost of equity based compensation is recognized as compensation expense over the vesting period of the awards. | ||||||
We estimate the fair value of compensation involving stock options utilizing the Black-Scholes option pricing model. This model requires the input of several factors such as the expected option term, expected volatility of our stock price over the expected option term, and an expected forfeiture rate, and is subject to various assumptions. We believe the valuation methodology is appropriate for estimating the fair value of stock options we grant to employees and directors which are subject to ASC 718-10 requirements. These amounts are estimates and thus may not be reflective of actual future results or amounts ultimately realized by recipients of these grants. | ||||||
The Company’s Long Term Incentive Plan permits grantees to tender shares to the Company in satisfaction of liabilities related to the exercise of equity awards, including the exercise price of options and tax liabilities related to equity awards. During the first quarter of 2015, 139,790 shares were tendered to the Company in satisfaction of $1,463,601 of such liabilities. | ||||||
Net Earnings Per Share | ||||||
We computed our basic earnings (loss) per share using weighted average shares outstanding for each respective period. Diluted earnings per share also reflect the weighted average impact from the date of issuance of all potentially dilutive securities, consisting of stock options and common share purchase warrants, unless inclusion would have had an anti-dilutive effect. The calculation of basic weighted average shares outstanding excludes unvested restricted stock. Actual weighted average shares outstanding used in calculating basic and diluted earnings per share were: | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2015 | 2014 | |||||
Basic Weighted Average Shares Outstanding | 49,667,434 | 39,812,820 | ||||
Effect of Dilutive Securities | — | — | ||||
Diluted Weighted Average Shares Outstanding | 49,667,434 | 39,812,820 | ||||
INVENTORY
INVENTORY | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory | ||||||||
Inventory | ||||||||
3. Inventory | ||||||||
Components of inventory as of March 31, 2015 and December 31, 2014 are as follows: | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Raw Materials | $ | 3,460,108 | $ | 2,197,143 | ||||
Work in Process | 212,496 | 197,106 | ||||||
Finished Goods | 1,523,402 | 1,525,936 | ||||||
Total | $ | 5,196,006 | $ | 3,920,185 | ||||
DISTRIBUTION_AGREEMENT
DISTRIBUTION AGREEMENT | 3 Months Ended |
Mar. 31, 2015 | |
Distribution Agreement. | |
Distribution Agreement | |
4. Distribution Agreement | |
As of October 2, 2014, we entered into a Distribution Agreement with Baxter, pursuant to which Baxter became the Company’s exclusive agent for sales, marketing and distribution activities for the Company’s hemodialysis concentrate and ancillary products in the United States and various foreign countries for an initial term of 10 years. The Distribution Agreement does not include any of the Company’s drug products. The Company will retain sales, marketing and distribution rights for its hemodialysis concentrate products in specified foreign countries in which the Company has an established commercial presence. During the term of the Distribution Agreement, Baxter has agreed not to manufacture or sell any competitive concentrate products in the United States hemodialysis market, other than specified products. | |
Pursuant to the Distribution Agreement, Baxter paid the Company $20 million in cash in early October (the “Upfront Fee”). The Upfront Fee has been deferred and will be recognized as revenue based on the proportion of product shipments to Baxter in each period to total expected sales volume over the term of the Distribution Agreement. The Company recognized revenue associated with the Upfront Fee totaling $493,227 for the quarter ended March 31, 2015. | |
Under the Distribution Agreement, Baxter will purchase products from the Company at established gross margin-based prices per unit, adjusted each year during the term. The Company will continue to manage customer service, transportation and certain other functions for its current customers on Baxter’s behalf through at least December 31, 2017, in exchange for which Baxter will pay the Company an amount equal to the Company’s related costs to provide such functions plus a slight mark-up. | |
The Distribution Agreement also requires Baxter to meet minimum annual gallon-equivalent purchase levels, subject to a cure period and certain other relief, in order to maintain its exclusive distribution rights. The minimum purchase levels increase each year over the term of the Distribution Agreement. Orders in any contract year that exceed the minimum will be carried forward and applied to future years’ minimum requirements. The Distribution Agreement also contains provisions governing the operating relationship between the parties, the Company’s obligations to maintain specified manufacturing capacity and quality levels, remedies, as well as representations, warranties and indemnification obligations of the parties. | |
Either party may terminate the Distribution Agreement upon the insolvency or material breach of the other party or in the event of a force majeure. In addition, Baxter may also terminate the Distribution Agreement at any time upon 270 days’ prior written notice to the Company or if (1) prices increase beyond certain thresholds and notice is provided within 45 days after the true up payment is due for the year in which the price threshold is exceeded, (2) a change of control of the Company occurs and 270 days’ notice is provided, or (3) upon written notice that Baxter has been enjoined by a court of competent jurisdiction from selling in the United States any product covered by the Distribution Agreement due to a claim of intellectual property infringement or misappropriation relating to such product. If Baxter terminates the Distribution Agreement under the discretionary termination or the price increase provisions, it would be subject to a limited non-compete obligation in the United States with respect to certain products for a period of two years. | |
If a “Refund Trigger Event” occurs, the Company would be obligated to repay a portion of the Upfront Fee and Facility Fee (described below) as follows: 50% if the event occurs prior to December 31, 2016, 33% if the event occurs in 2017 or 2018, and 25% if the event occurs in 2019, 2020 or 2021. A “Refund Trigger Event” means any of the following: (1) a change of control of the Company involving any of certain specified companies; (2) a termination by Baxter due to the Company’s bankruptcy or breach, or due to price increases that exceed the stated thresholds; (3) a termination by either party due to a force majeure; (4) settlement or adjudication of any claim, action or litigation relating to a covered product that materially and adversely affects Baxter’s commercialization of the product; and (5) any regulatory action or ruling relating to a covered product that materially and adversely affects Baxter’s commercialization of the product. In addition, if Baxter terminates the Distribution Agreement because Baxter has been enjoined by a court of competent jurisdiction from selling in the United States any product covered by the Distribution Agreement due to a claim of intellectual property infringement or misappropriation relating to such product prior to the end of 2018, Baxter would be entitled to a refund of up to $10 million, or $6.6 million if the termination occurs in 2019. In no event would Baxter be entitled to more than one refund payment. | |
The Distribution Agreement also required the Company to prepay its outstanding secured long-term indebtedness within 180 days and prohibits the Company from entering into a subsequent contract encumbering the assets used in the Company’s concentrate business without the prior written consent of Baxter. | |
Baxter has also agreed to pay the Company $10 million (the “Facility Fee”) to build and operate a new manufacturing facility located in the Pacific time zone to service customers in the Western United States. The Facility Fee will be reduced to the extent that the facility is not operational within 12 months after the start of construction. Except for any leased components, the Company will own the facility when completed. | |
The Distribution Agreement may be extended an additional five years by Baxter if Baxter achieves a specified sales target and pays an extension fee of $7.5 million. If the first extension occurs, the Distribution Agreement term may later be extended an additional five years at Baxter’s option at no additional cost. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Summary of Significant Accounting Policies | ||||||
Basis of Presentation | ||||||
Basis of Presentation | ||||||
Our consolidated financial statements include our accounts and the accounts for our wholly owned subsidiary, Rockwell Transportation, Inc. All intercompany balances and transactions have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America, or “GAAP,” and with the instructions to Form 10-Q and Securities and Exchange Commission Regulation S-X as they apply to interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The balance sheet at December 31, 2014 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. | ||||||
In the opinion of our management, all adjustments have been included that are necessary to make the financial statements not misleading. All of these adjustments that are material are of a normal and recurring nature. Our operating results for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015. You should read our unaudited interim financial statements together with the financial statements and related footnotes for the year ended December 31, 2014 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 includes a description of our significant accounting policies. | ||||||
Revenue Recognition | ||||||
Revenue Recognition | ||||||
We recognize revenue at the time we transfer title to our products to our customers consistent with generally accepted accounting principles. Generally, we recognize revenue when our products are delivered to our customer’s location consistent with our terms of sale. We recognize revenue for international shipments when title has transferred consistent with standard terms of sale. | ||||||
The initial payment received from our long-term Distribution Agreement has been deferred and classified as deferred license revenue. Deferred license revenue is being recognized based on the proportion of product shipments to Baxter Healthcare Corporation (“Baxter”) in each period to total expected sales volume for the term of the agreement. | ||||||
We require certain customers, mostly international customers, to pay for product prior to the transfer of title to the customer. Deposits received from customers and payments in advance for orders are recorded as liabilities under Customer Deposits until such time as orders are filled and title transfers to the customer consistent with our terms of sale. | ||||||
Cash and Cash Equivalents | ||||||
Cash and Cash Equivalents | ||||||
We consider cash on hand, money market funds, unrestricted certificates of deposit and short term marketable securities with an original maturity of 90 days or less as cash and cash equivalents. | ||||||
Investments Available for Sale | ||||||
Investments Available for Sale | ||||||
Investments Available for Sale are short-term investments, consisting of investments in short term duration bond funds, and are stated at fair value based upon observed market prices (Level 1 in the fair value hierarchy). These funds generally hold high credit quality short term debt instruments. These instruments are subject to changes in fair market value due primarily to changes in interest rates. The fair value of these investments was $19,997,509 as of March 31, 2015. Unrealized holding gains or losses on these securities are included in accumulated other comprehensive income (loss). Realized gains and losses, including declines in value judged to be other-than-temporary on available-for-sale securities are included as a component of other income or expense. Gross unrealized gains were $23,839 and gross unrealized losses were $151,310 as of March 31, 2015. There were no realized gains or losses in the first quarter of 2015. | ||||||
The Company has evaluated the near term interest rate environment and the expected holding period of the investments along with the duration of the fund portfolios in assessing the severity and duration of the potential impairment. Based on that evaluation the Company does not consider those investments to be other-than-temporarily impaired at March 31, 2015. | ||||||
Research and Product Development | ||||||
Research and Product Development | ||||||
We recognize research and product development expenses as incurred. We incurred product development and research costs related to the commercial development, patent approval and regulatory approval of new products, including our recently FDA approved iron delivery maintenance drug, Triferic™, aggregating approximately $0.8 million and $4.6 million for the three months ended March 31, 2015 and 2014, respectively. | ||||||
We submitted our NDA for TrifericTM to the FDA on March 24, 2014 and paid the standard new drug application fee under the Prescription Drug User Fee Act of $2,169,100. The Company sought qualification as a small business in order to waive the fee, however, the application to obtain the waiver was denied by the Small Business Administration. The Company subsequently appealed that determination and on June 9, 2014, the waiver was granted. The NDA fee was recognized as an expense in the first quarter of 2014, and that expense was reversed in the second quarter of 2014 upon notification of the successful appeal. | ||||||
Share Based Compensation | ||||||
Share Based Compensation | ||||||
We measure the cost of employee services received in exchange for equity awards, including stock options, based on the grant date fair value of the awards in accordance with ASC 718-10, Compensation — Stock Compensation. The cost of equity based compensation is recognized as compensation expense over the vesting period of the awards. | ||||||
We estimate the fair value of compensation involving stock options utilizing the Black-Scholes option pricing model. This model requires the input of several factors such as the expected option term, expected volatility of our stock price over the expected option term, and an expected forfeiture rate, and is subject to various assumptions. We believe the valuation methodology is appropriate for estimating the fair value of stock options we grant to employees and directors which are subject to ASC 718-10 requirements. These amounts are estimates and thus may not be reflective of actual future results or amounts ultimately realized by recipients of these grants. | ||||||
The Company’s Long Term Incentive Plan permits grantees to tender shares to the Company in satisfaction of liabilities related to the exercise of equity awards, including the exercise price of options and tax liabilities related to equity awards. During the first quarter of 2015, 139,790 shares were tendered to the Company in satisfaction of $1,463,601 of such liabilities. | ||||||
Net Earnings Per Share | ||||||
Net Earnings Per Share | ||||||
We computed our basic earnings (loss) per share using weighted average shares outstanding for each respective period. Diluted earnings per share also reflect the weighted average impact from the date of issuance of all potentially dilutive securities, consisting of stock options and common share purchase warrants, unless inclusion would have had an anti-dilutive effect. The calculation of basic weighted average shares outstanding excludes unvested restricted stock. Actual weighted average shares outstanding used in calculating basic and diluted earnings per share were: | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2015 | 2014 | |||||
Basic Weighted Average Shares Outstanding | 49,667,434 | 39,812,820 | ||||
Effect of Dilutive Securities | — | — | ||||
Diluted Weighted Average Shares Outstanding | 49,667,434 | 39,812,820 | ||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | |||||
Mar. 31, 2015 | ||||||
Summary of Significant Accounting Policies | ||||||
Schedule of weighted average shares outstanding used in calculating basic and diluted earnings per share | ||||||
Three Months Ended | ||||||
March 31, | ||||||
2015 | 2014 | |||||
Basic Weighted Average Shares Outstanding | 49,667,434 | 39,812,820 | ||||
Effect of Dilutive Securities | — | — | ||||
Diluted Weighted Average Shares Outstanding | 49,667,434 | 39,812,820 | ||||
Inventory_Tables
Inventory (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Inventory | ||||||||
Schedule components of inventory | ||||||||
March 31, | December 31, | |||||||
2015 | 2014 | |||||||
Raw Materials | $ | 3,460,108 | $ | 2,197,143 | ||||
Work in Process | 212,496 | 197,106 | ||||||
Finished Goods | 1,523,402 | 1,525,936 | ||||||
Total | $ | 5,196,006 | $ | 3,920,185 | ||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 0 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 24, 2014 | Dec. 31, 2014 | |
Investments Available for Sale | ||||
Fair value of investments | $19,997,509 | $19,927,310 | ||
Gross unrealized gains | 23,839 | |||
Gross unrealized losses | 151,310 | |||
Realized gains or losses | 0 | |||
Research and Product Development | ||||
Product development and research costs | 799,591 | 4,615,197 | ||
Patents | ||||
Research and Product Development | ||||
NDA review fee | $2,169,100 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation. | ||
Restricted Stock Tendered in Satisfaction of Tax Liabilities | $1,463,601 | |
Restricted Stock Tendered in Satisfaction of Tax Liabilities (in shares) | 139,790 | |
Weighted average shares outstanding used in calculating basic and diluted earnings per share | ||
Basic Weighted Average Shares Outstanding | 49,667,434 | 39,812,820 |
Diluted Weighted Average Shares Outstanding | 49,667,434 | 39,812,820 |
Inventory_Details
Inventory (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Inventory | ||
Raw Materials | $3,460,108 | $2,197,143 |
Work in Process | 212,496 | 197,106 |
Finished Goods | 1,523,402 | 1,525,936 |
Total | $5,196,006 | $3,920,185 |
DISTRIBUTION_AGREEMENT_Details
DISTRIBUTION AGREEMENT (Details) (USD $) | 3 Months Ended | 0 Months Ended |
Mar. 31, 2015 | Oct. 02, 2014 | |
Recognized Distribution Agreement Income | ($493,227) | |
Baxter Healthcare Organization | ||
Distribution agreement term | 10 years | |
Upfront fee | 20,000,000 | |
Agreement termination notice period | 270 days | |
Agreement termination significant price increase notice period | 45 days | |
Agreement termination limited noncompete period | 2 years | |
Agreement Refund Trigger Event repayment percent first criteria | 50.00% | |
Agreement Refund Trigger Event repayment percent second criteria | 33.00% | |
Agreement Refund Trigger Event repayment percent third criteria | 25.00% | |
Agreement property infringement repayment amount first criteria | 10,000,000 | |
Agreement property infringement repayment amount second criteria | 6,600,000 | |
Agreement prepayment secured long-term indebtedness period | 180 days | |
Facility Fee | 10,000,000 | |
Facility Fee reduction period | 12 months | |
Agreement extension period | 5 years | |
Agreement extension period two | 5 years | |
Extension fee | $7,500,000 |