Rockwell Medical (NASDAQ:RMTI) has the potential for significant stock price gains by 2012 based on the enhanced earnings power of at least $4/share at that time for its lead clinical compound Soluble Ferric Pyrophosphate (SFP) with just a 20% share of the estimated $600 million U.S. market for iron replacements in 2012. The stock appreciation potential for RMTI is similar to the exponential gains experienced by AMAG Pharma (NASDAQ:AMAG) from the earlier part of this decade, culminating in approval of its IV iron replacement drug Feraheme earlier this year.

However, Rockwell is unique because it is not merely a development-stage operation as its core dialysate business already generates significant revenue exceeding $50 million, which also serves as a built-in distribution channel for a differentiated form (compared to existing IV iron therapies) of dialysate iron replacement, SFP, upon successful clinical development and FDA approval. In addition, there is a very low clinical risk for SFP based on its excellent safety record and well established mode of action as an add-on to the Company’s core business as a dialysate iron replacement therapy that has the potential for additional applications and indications beyond the use for the treatment of anemia in patients undergoing dialysis.

The low outstanding number of shares of common stock (about 14 million) and estimated cost of $15 million to fund Phase 3 development for SFP allow RMTI to retain U.S. rights to the treatment while seeking a partnership deal for ex-U.S. markets such as Europe and Asia-Pacific. The current share price around $8 provides RMTI an opportunity to fund Phase 3 U.S. development for SFP with minimal dilution to existing shareholders and have 18-20 million fully diluted shares outstanding by the estimated market launch of SFP in 2012. Upcoming milestones for RMTI include the following.

1.) Report Phase 2b FDA clinical trial results for SFP during 4Q09-1Q10

2.) Initiate pivotal Phase 3 clinical trial for SFP during 2Q10

3.) Report results from a NIH safety study (non-FDA) during 2010

4.) File NDA for SFP with the FDA during 2011 for 2012 U.S.