Rockwell Medical Inc. said it has signed an exclusive agreement with Baxter Healthcare Corporation, a subsidiary of Baxter International Inc. (NYSE:BAX), to commercialize Rockwell's hemodialysis concentrate product line in the U.S. and in select overseas markets.

Under the terms of the agreement, Baxter will become the exclusive distributor of Rockwell's hemodialysis concentrate and ancillary products in the U.S. and selected foreign countries for an initial term of 10 years. Baxter can extend the agreement for two additional 5-year terms upon meeting certain sales targets, coupled with a $7.5 million payment related to the first extension. Baxter will purchase products from Rockwell at a pre-determined gross margin-based price per unit and is required to meet minimum annual purchase levels in order to retain their exclusive rights. Baxter will leverage Rockwell's distribution operations in order to provide specialized customer and delivery service for concentrates, covering Rockwell's costs for these services. Rockwell will retain sales, marketing and distribution rights for its hemodialysis concentrate products in certain foreign countries in which it has an established commercial presence.

Baxter will pay Rockwell $20 million in cash. Baxter will also purchase $15 million of Rockwell common stock. The investment in Rockwell shares is being made at a price per share equal to the average closing price of the shares over the last 12 months  ($11.39 per share). Rockwell is eligible for milestone payments totaling $10 million related to the expansion of its manufacturing capabilities to serve customers across the U.S.

"This long-term, strategic supply and distribution agreement enables Rockwell to expand and accelerate our hemodialysis concentrate business, while we continue to strategically build our drug pharma business in the U.S. and globally," said Robert L. Chioini, founder, chairman and CEO of Rockwell.  "We are excited to be partnering with Baxter, a global market leader who has a proven track record in the field of dialysis and renal products. This agreement benefits dialysis patients and service providers by expanding access to our market leading products in new territories, while reducing future risk."