Rockwell Medical, Inc.

Thank you. Good afternoon.

Thank you for joining us. I will cover 4 areas with you today.

The first is third quarter numbers, second is our SFP clinical progress, third is Calcitriol and our progress on commercial launch and fourth is our financial resources.

Let's start with the quarter. We had a solid third quarter.

Third quarter 2012 sales revenue was $12.7 million, an increase of 6% over the third quarter of 2011. Sequentially, sales increased 4.7% from the previous quarter.

Gross profit was up 19.6% over the third quarter of 2011. Gross profit margins increased to 13%.

We expect continued sales and margin growth in our operating business going forward.

R&D for the third quarter was $16.2 million. As we stated on the last call, we expected R&D expense to peak in the third quarter.

The increase in R&D expense was largely a result of faster enrollment in our long-term safety study. The safety study is needed for FDA approval, and we had anticipated the enrollment cost would occur over a few quarters, but the study enrolled much faster than our clinical team expected, and as a result, the bulk of the enrollment cost occurred in the third quarter.

Net loss for the quarter was $17.9 million compared to net loss of $5 million in the third quarter of 2011. Third quarter loss was due primarily to our clinical work for our lead drug candidate, SFP.

Cash and cash equivalents at the end of the third quarter were $11.3 million. We expect our business operations, excluding R&D, to continue to be cash flow positive and to build momentum through 2013.

Now let's turn to our SFP clinical progress. As you know, earlier this year, we completed patient enrollment in both of our Phase III clinical studies for delivering SFP-iron to hemodialysis patients.

The study is called CRUISE-1 and CRUISE-2, have a combined total of 600 patients, 300 receiving SFP-iron, 300 receiving no iron, while all patients are not allowed to have their ESA dose adjusted during the 12-month duration. Primary efficacy endpoint is 0.5 gram change in hemoglobin from baseline.

Our assumption is that placebo patients not receiving iron will see their hemoglobin decrease, while patients receiving SFP-iron will maintain or increase their hemoglobin. We expect the difference, or the delta, between the placebo and the SFP groups' hemoglobin will be greater than 0.5 gram, thereby achieving the efficacy endpoint.

The drug safety profile up to this point appears very good. The independent safety monitoring board overseeing the CRUISE program has completed 3 reviews.

And after each review, the board recommended that the studies continue with no modifications. A fourth review is expected in December of this year.

We anticipate the study will complete in August of 2013 and that data will read out shortly thereafter in October. We plan to submit our NDA to the FDA by year-end 2013.

Our marketing study for SFP is the PRIME study. As you know, this study is designed to capture ESA-sparing data, as well as measure markers of inflammation and oxidative stress.

ESA, best known as the drug Epogen or Epo, is the most expensive drug in dialysis and is given to dialysis patients every treatment. Any reduction of its use would provide a meaningful economic benefit to dialysis providers.

For example, a 1% to 2% ESA reduction would be a cost reduction of about $1 per treatment or a savings of approximately $150 per patient, per year. As you can imagine, this is a tremendous savings for the dialysis provider.

If data from the PRIME study demonstrates ESA reduction, we expect SFP will sell at a premium in the marketplace upon FDA approval, providing greater sales and gross margins for the company. PRIME enrollment completed earlier this year, and top line results from PRIME are expected shortly in the first quarter, most likely in February 2013.

Moving on to Calcitriol, our FDA-approved generic Vitamin D injection. Our stability batch is scheduled to be manufactured this coming week, then that stability data will be submitted to the FDA 30 days later.

Assuming we have no delays with the FDA or otherwise, we anticipate manufacturing approval by the end of the first quarter of 2013. We expect to launch into the commercial market immediately after approval.

Calcitriol is complementary to our existing operating business and we expect to sell it to our existing customer base, which encompasses approximately 1,800 clinics with relationships spanning close to 20 years. We plan to penetrate the entire $350 million U.S.

market while requiring minimal SG&A expense in the process.

Calcitriol is expected to enable us to increase our overall sales and profit margins considerably, strengthening our existing business and providing further leverage to our planned offering of SFP upon its FDA market approval.

The final topic I wanted to cover with you this afternoon is our financial resources. As I mentioned earlier, cash and cash equivalents at the end of the third quarter were $11.3 million, and we expect our operating business, excluding R&D, to continue to generate cash and to gain momentum throughout 2013.

We expect to obtain additional cash from the business development activities we are currently undertaking, whether licensing of SFP outside of the U.S. or other potential partnerships we are discussing within the U.S.

or various other alternatives.

In closing, we achieved strong operating performance for the quarter, and we continue to make solid progress in our clinical development. We executed well with our existing operating business, and we expect to see sales and margins increase going forward.

Our clinical development for SFP continues to advance and data points are very near. We are also progressing well towards commercial launch of Calcitriol.

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

Thank you, Rob, and good afternoon. I'll provide a financial review of the third quarter, as well as our financial position and cash resources.

In reviewing our sales, sales in the third quarter increased to $12.7 million compared to $12 million in the third quarter last year. Sales increased $700,000 or 6%, the result of both domestic and international sales increasing over 2011.

Sequentially, our sales increased 4.7% or $600,000 versus Q2. Sales in the first 9 months of 2012 were $36.8 million compared to $37.1 million in the first 9 months of 2011 with $300,000 decrease in sales during the first 9 months attributable to lower international sales from one international distributor for the first 9 months of 2011.

Otherwise, international sales increased $600,000, while domestic sales increased by $0.5 million. Domestic sales were up $0.5 million, higher than the first 9 months last year due to customers converting to our Dry Acid Concentrate product line, which offers a lower cost per treatment.

The Dry Acid product line reduces our sales, but improves our gross profit margins by reducing shipping and transportation costs.

On the gross profit, our margins in the third quarter of 2012 increased to 13% compared to 11.5% in the third quarter last year, an increase of 1.5 percentage points. Gross profit dollars in the third quarter increased by 19.6% to $1.6 million, an increase of $300,000 compared to the third quarter last year.

This increase in gross profit was due to new business, improving product mix, increased sales of dry acid concentrate products and reduced operating expenses compared to the third quarter last year.

For the 9 months ended September 30, gross profit increased -- into -- increased to $5 million compared to $4.1 million in the first 9 months last year. Gross profit margins increased to 13.5% compared to 11.1% in the first 9 months of last year.

Gross profit increased by $900,000, primarily due to new customer business and improving product mix and lower operating cost. We also realized lower operating costs due to lower personnel and business insurance costs.

On our net loss for the quarter, which was $17.9 million, it compares to $5 million in the third quarter last year. R&D expense for the quarter totaled $16.2 million, reflecting the accelerated pace of enrollment in our long-term safety study along with our other Phase III clinical costs.

As we discussed in our last call, we expected R&D spending to peak in Q3 and we completed a lot of testing in the safety areas sooner than anticipated, which drove the higher expense level. The net loss was primarily due to higher R&D expense.

For the first 9 months of 2012, the net loss was $40.3 million compared to a net loss of $12.5 million last year. The $28 million increase from net loss was largely due to increased R&D expenses of $26.5 million.

Our gross profit and our operating business was up 22% compared to last year and generated over $1 million in operating profit after excluding noncash equity charges.

On liquidity and capital resources. We completed the third quarter with $11.3 million in cash resources.

We expect our business operations, excluding R&D, to continue to be cash flow positive and to build momentum throughout 2013. We expect to obtain additional cash from business development activities we are currently undertaking, whether licensing of SFP outside the U.S.

or other potential partnerships we are discussing within the U.S. or from other alternatives.

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

I'd like to ask about the CRUISE trials. I think that the labels on the ESAs change during the trial, the range of hemoglobin, might that affect the result in any way?

No, good question, Carol, but that was back in a year ago June. So not this last June, a year ago June 24, 2011.

And when that change came out, we worked with the investigators and the participants altered or amended the protocol and had the IRBs rereview the protocol and approve it. And so all those changes have been accounted for.

In terms of CRUISE-1 and CRUISE-2, you mentioned that you -- earlier that you expected CRUISE-1 to read out before CRUISE-2. Is that still on track?

We believe that will be the case. We expect CRUISE-1 to read out before CRUISE-2.

We'll know more as we get closer to the end of the study.

Okay. And kind of on a more macro level, considering the recent election win for Obama, do you think that has any kind of play out into the dialysis market in terms of making reimbursement of it tighter?

No, we don't see any impact to reimbursement in ESRD from the election.

I know you were out at the ASN Conference last week. I was hoping that maybe you could give us a recap of your activities out there.

Well, we didn't present any data to ASN. The ASN is always an important meeting.

It's an international meeting. We have a lot of business development-type meetings and activities going on, and it was a very effective week for us.

So that was just basically a good networking event for you then.

Yes, it's a good networking event. It's a good business development event, and you also -- we also have an exhibit where we have our products on display.

This is Whitney on for Ritu. I dropped off the call for a second so forgive me if I -- if this is repeat.

But do you have any data on the baseline ESA doses in the CRUISE trials?

We don't have any data that we share at this point.

Okay. Do you have a range that you're expecting at all?

Or do you expect it to be range of dose baseline in terms of [ph] trial start?

No, I mean, we really have no information at this time.

Okay, okay. Do you expect it to be equal to Phase II or lower?

I really can't give you an answer on that. So the best answer is if you've got another question, we should move on to that.

Okay. And then, again, forgive me if you already answered this, but is there any more information on the timing of the Calcitriol NDA?

So yes, you must have missed the -- as we stated on the call, our manufacturing -- our stability batch is going to be manufactured this coming week. The NDA is already approved so we just need an approval on the manufacturing facility.

Great, thank you. Thank you for joining us today.

We appreciate your time and your continued support.