Rockwell Shares Sink 25% After Brean Sets New Sell Rating, $4 Price Target, Voices Concern on Triferic

Shares of Rockwell Medical RMTI are getting crushed Tuesday morning following a new Sell rating and $4 price target from Brean Capital's Jonathan Aschoff. The research note was issued late Monday evening. The stock last traded at $10.05, down a jaw-dropping 25-plus percent from Monday's close. The Brean Capital team (led by Aschoff and Yi Cheng) said its model included "only revenue from currently approved kidney disease drugs, as we believe the FDA will reject Triferic due to poor clinical trial design and questionable efficacy. Sales of Rockwell's drugs have been stagnant ($60 million, $49 million, and $50 million in 2010, 2011, and 2012, respectively) and we project flat future growth." Aschoff and team warned Triferic did not seem to lower total ESA use compared to a placebo in a recent PRIME trial, "and did not reduce ESA use versus baseline, by contrast to what is seen with IV iron and Zerenex. The CRUISE trials had a questionable design that we view as unlikely to result in approval. Both CRUISE trials did not allow IV iron use or changes in ESA use, which is utterly inconsistent with current dialysis center practice under bundled reimbursement." Brean's new price target implies potential downside of 60 percent from where shares of Rockwell Medical are currently trading.