Rockwell Medical, Inc.

Before we get started, I would like to remind everyone that this call may contain forward-looking statements. All forward-looking statements involve risk and uncertainty, including, without limitation, the risks detailed in the company’s filings and report with the Securities and Exchange Commission.

Such statements are only predictions, and detailed results may differ materially than those projected.

I will now turn the call over to Mr. Rob Chioini, Chairman and CEO of Rockwell.

Good morning. Thank you for joining us.

This morning I will cover first quarter operating results and then update our clinical development progress. First quarter 2012 revenue was $12 million and gross profit was $1.6 million.

Sequentially, first quarter 2012 revenue increased 1.1%, gross profit increased 5.3%, and gross profit margins improved 1.1 percentage points.

Net loss for the quarter was $10.6 million compared to net loss of $2.9 million in the first quarter last year. R&D spending increased dramatically in Q1 2012.

We spent $9.4 million compared to $2.4 million in Q1 2011. The R&D spending was expected and reflects our accelerated progress in our ongoing clinical studies.

Cash and investments at the end of the first quarter were $25.6 million compared to $20 million in Q1 2011. We expect an additional $10.4 million in cash to come in over the remaining months this year from expiring warrants.

Turning to SFP clinical progress, we released news earlier this week that our PRIME study completed patient enrollment. This is an important milestone, and we expect to have the PRIME top line results available in February 2013.

As you know, the study is designed to measure markers of inflammation and oxidative stress, but primarily to capture ESA-sparing data. ESA, best known as the drug EPO from Amgen, is the most expensive drug in dialysis and reducing its use is very important to dialysis providers.

If data from the PRIME study demonstrates any amount of ESA reduction, we expect it will have an even greater impact on our current projected revenues once SFP enters the marketplace.

Both our efficacy studies continue to progress. The CRUISE studies are the Phase III studies needed for FDA approval and are enrolling a total of 600 patients.

We estimate the CRUISE studies will complete patient enrollment over the next 6 to 8 weeks. Regarding ex-U.S.

licensing of SFP, we continue to have productive discussions.

We also made a significant hire. Dr.

Raymond Pratt has joined Rockwell as Chief Medical Officer. Dr.

Pratt is someone we have been targeting for the CMO position for some time, and when the opportunity presented itself to bring him to the team, we acted. You’ve seen Dr.

Pratt’s impressive credentials in the April 19 press release, as well as possibly on our website. He is someone with extensive industry experience and in-depth knowledge of clinical development and the FDA regulatory process.

It brings us an even greater confidence in achieving FDA approval for SFP, as well as the ability to initiate development of our other new drugs and oversee the personnel and effort needed to move them through clinical development to the commercial market.

Regarding Calcitriol, our active vitamin-D injection, we are on course to launch this drug into the commercial market in late 2012. This is an exciting product for us.

It is complementary to our existing operating business, and we expect to improve our revenue significantly once we are able to sell it in the renal space.

Calcitriol is a great opportunity to increase our sales and profit, to strengthen our existing business and to provide considerable leverage to our planned offering of SFP upon FDA market approval. Calcitriol alone is expected to be material accretive while incurring minimal SG&A expense.

To conclude, we continue to make notable progress executing on clinical operational and financial fronts, and we are pleased with our first quarter. The PRIME study completed patient enrollment; the CRUISE studies will soon.

We continue to move Calcitriol closer to market launch, and our operating results were in line with our expectations.

We expect our operating business will continue to expand and help offset future R&D costs, and we anticipate our existing sales and distribution infrastructure will be a critical component to our success, giving us a strong competitive advantage in capturing Calcitriol sales and then, ultimately, SFP sales upon FDA market approval.

I will now turn the call over to Tom for his comments on our first quarter financial results.

Well, thank you Rob, and good morning everyone. I will provide a financial review of the first quarter, as well as our financial position and cash resources.

In reviewing our sales, sales in the first quarter were - of 2012 were $12 million, compared to $13.3 million in the first quarter of 2011. The sales decrease of $1.3 million was largely due to reduced purchase volumes from one international distributor.

Domestic sales were lower than the first quarter last year, primarily due to continuing changes in product mix resulting in lower sales dollars per unit. Many customers continue to convert to our Dry Acid Concentrate product line to lower their cost.

This reduces our sales, but improves our gross profit margins by reducing shipping cost.

Sequentially, our sales increased to $12 million from $11.9 million or $130,000 or 1.1%. Our international sales were up about 5.5% in Q1, and domestic sales were up about 0.5% compared to the fourth quarter.

Sequentially, gross profit margins increased 0.5%. Gross profit margins in the first quarter were 13.5% compared to 12.4% in the first quarter of last year, an increase of 1.1 percentage points.

Gross profit dollars in the first quarter of 2012 were about the same as the first quarter last year, even with lower sales volumes and higher fuel and material cost. This was largely a result of changes to product mix, notably our Dry Acid product sales expansion and its positive impact to gross profit.

Net income, our net loss for the quarter was $10.6 million compared to a loss of $2.9 million in the first quarter of last year. R&D expense for the quarter totaled $9.4 million, reflecting the accelerated pace of enrollment in our Phase III clinical studies and our other R&D efforts.

Overall, compared to last year, our R&D costs were up $7.0 million, while our overall costs increased $7.6 million. Of the $600,000 decreased income not attributable to R&D, $400,000 of that retained to non-cash charges for equity compensation.

Our loss per share for the first quarter of 2012 was $0.54 compared to $0.17 last year. Our cash position, including our cash and short-term investments as of March 31, were $25.6 million.

Our cash and short-term investments increased $8 million since the start of 2012. Our cash and other prospective sources of cash, including expiring warrants that we anticipate will bring in an additional $10.4 million in cash, possibly more, provide us with a substantial cash position to fund our operations, our clinical development programs and to support the company’s growth initiatives.

I will now turn the call back to the operator for some Q&A.

I have a few. With R&D, it’s a little bit higher than we expected, I know it’s going to go up just fine, but is this run rate now or is it going to continue to increase from here or is this a level at which we should continue to expect R&D could be?

Annabel, we would expect the R&D to kind of run in this $9 million to $10 million range in the second quarter. And then as the studies have completed enrollment, it should start to decrease a bit.

Starting into the back half of the year? Or is that after the studies complete?

After the studies have completed enrollment, which will be in the second quarter, I would expect the third quarter to start to dip a little bit.

Okay, all right, great. And then you mentioned that you're launching Calcitriol towards the end of the year, is there any hold-up with FDA inspecting the plant or approving the plant or is there any delay there or is it just the typical timelines that you had expected?

No delays, typical timelines.

Okay, all right. And then a final question.

There are a number of products potentially entering the ESRD space that are not direct competitors, but may change the dynamics in the marketplace. I guess for one is Zerenex, that’s a phosphate binder, and I guess their claim is that they might reduce the need for iron as well as ESAs.

And then there is also Affymax’s lower cost ESA that might change the pricing calculation. Can you just help us understand how you are factoring all these things into your outlook for both SFP demand and potential pricing flexibility into the future?

Sure, yes, with the first product Zerenex, you know without getting into detail, we don’t view that product as a competing product. We don’t think it will have any effect on the SFP product whatsoever.

The Affymax product obviously will and has already moved the ESA pricing down a certain degree, but the reality is, is no matter what it moves it down to, it’s still a significant amount. The average price at this time is somewhere hovering around $7,000, maybe a little more.

Even if that price drops 10%, 20%, it’s still a huge number. And so with the ability to spare ESA, we still would anticipate a premium on the SFP product above and beyond the current pricing structure.

Okay, and just on the Zerenex issue, it’s not a competing product, but I guess, they're making claims that it might change iron needs. Any views on that?

Again, our view is that, that product will not ultimately have any effect on our product, and when you get a product approved by the FDA, you still have to have somebody buy it in the market. And they may get approval, but then they'll have a challenge like many other companies, and in our view, a difficult time getting market adoption.

As far as it being able to spare iron, like everybody else, I guess we’d have to see data.

I just wanted to pick up where Annabel left off with regard to the call yesterday with DaVita, there was a lot of questioning on their dialysis margin and costs structure. And I guess they're locked into a long-term contract with Amgen.

Just wondering how you guys think about in the sense of ESA-sparing, how the - the long-term contracts with certain performance minimums and such affect their willingness and ability to use SFP?

So, Mike, you’re asking if we think it will have an effect on the SFP product in terms of - for example, DaVita gets ESA-sparing from SFP, but they have a contract with Amgen and are forced to purchase...

Right, to get the discounts. So if they use less - if they use less, they pay a higher price that affects your - their dialysis margin per patient.

So, how does that - how does your strategy factor in with that reality?

Well, for me to answer that I’d have to see the DaVita contract, but my guess is, censuses changes all the time in these dialysis clinics. So patients - you have new patients coming in, old patients moving out, and there's never any locked-in volume commitment that you're unable to address based on your census.

So my guess is, and I - again I haven’t seen this contract, my guess is, if they have some minimums in there, the minimums that they can easily hit and they probably take into account any kind of reduction or increase in ESA. I can’t really comment too much on that because I don’t know what the contract looks like.

Well, if you see it, let us know. And then can you just tell us what the weighted average shares out were for the quarter?

Yes, they were right around $19 million, Mike.

$19 million.

Yes.

When - I think you have a - this data safety in monitoring board meeting this quarter for the CRUISE trial, will we hear anything about that or no - is it no news is good news?

Yes. We’ll put out another press release, Carol, like we have on the first two.

And I believe that meeting will happen sometime in June.

Okay, great. And then could you just discuss a little bit further what kind of deal you’re looking for with the overseas partnership?

Well, so there's 2 main areas that we’ve really had our focus on, and that’s Europe and Japan. And in Europe, we may actually have more than one partner when we look at that region.

But by and large, we’re looking for a company that has the wherewithal to get the product into the market. If they have regulatory experience in that market, that’s a plus, and from a structure standpoint, it’s very, very, I guess, traditional structure with a fee upfront, double-digit royalty, some milestone payments.

Okay, okay. And could you just discuss a little bit further what other limiting - rate limiting factors to get Calcitriol approved?

So the only rate limiting factor is the stability data being sent into the FDA and then the FDA looking at that data and saying it meets the criteria and saying you’re approved to go into the commercial market. The Calcitriol product is an approved product, but because we’ve changed manufacturing locations, we have to make a batch at that location, we have to get stability data into the FDA, and it will either be a 30- or 90-day stability data, and that’s why the estimate moves a little bit or we give some space to that.

And then once they look at that data, we expect to get a green light from them to go ahead and start selling the product.

So you don’t know whether you have to have 30-day or 90-day stability?

Well we're submitting with 30, and we expect 30 will be fine. But they could come back and say we'd like to see 90.

I just had a quick question about the shelf registration that was announced the other day. I mean, do you guys see that additional funds is needed to give us a strategic market or...

I mean, I just noticed it was just indicated it was for general corporate purposes. I was just wondering if you had any color on that about what those funds might be used for?

Don’t anticipate needing any extra funds to get SFP to the market. It’s just sound financial business practice.

We’d be fiscally irresponsible had we not done a shelf.

Okay. But there's no specific area targeted for those funds at this point?

No. No, Brian, that’s just a tool that we’ve got in our arsenal, our treasury arsenal, if we need it down the road, or opportunities would come up, and it would -- it’s just good corporate governance to have that in place.

The first opportunity we had to put it in place was last week.

Can you give us a little bit of a guidance - and this may be difficult, but I know Mr. Pratt was brought on board to help get the SFP through, but also to potentially start working on some of the other applications.

Can you kind of - can you give us a little bit of an idea on what plans you have, if any, this year to maybe start working on some of these other SFP applications?

We’ve already begun some work, some preliminary work on a couple of these applications or these indications, and we'll be in a position soon to give you more detail on that, and when we are, we will.

Just following up on the earlier Calcitriol question, the stability of 30 or 90 days, do your timelines right now factor in a requirement of only 30-day stability or have you put in a cushion for the requirement of a 90-day stability testing? And then, do you have a batch that is going after 90-day stability so you can quickly follow with the FDA if need be?

Yes, so we factor in 90 days, and we have actually 2 manufacturing sites. So we’ll have more than one batch, and then each site will have multiple batches.

Well, thank you for joining us today. We appreciate your time and your continued support.