On November 12, 2019 BioLife Solutions, Inc. (NASDAQ: BLFS) ("BioLife" or the "Company"), a leading developer and supplier of a portfolio of best-in-class bioproduction tools for cell and gene therapies, reported financial results and operational highlights for the three and nine months ended September 30, 2019 (Press release, BioLife Science, NOV 12, 2019, View Source [SID1234551018]). The Company also revised 2019 financial guidance to reflect the acquisition of Custom Biogenic Systems, Inc. ("CBS") announced earlier today and introduced preliminary 2020 revenue guidance.

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Total revenue from sales of biopreservation media, automated thaw products and rental revenue of evo shipping containers for the third quarter of 2019 was $6.6 million, representing 25% year-over-year growth. Revenue from thaw product sales and evo rentals met or exceeded management’s internal plan for the quarter. Media sales were approximately $1 million below management’s internal plan primarily due to lower-than-expected orders from one large distributor and one cell therapy contract manufacturer. Order volume from these two customers has resumed to typical levels to date in the fourth quarter.

Mike Rice, BioLife Solutions CEO, remarked, "Q3 was another strong quarter of operational execution, growth and strategic activities supporting our vision to build BioLife into a premier bioproduction tools supplier. We achieved our financial goals in our cell and gene therapy franchise with the exception of biopreservation media revenue. Our media revenue remains concentrated with a relatively small number of large direct customers, distributors and CMOs and we anticipate some variability in demand from this segment.

"A primary driver of our M&A strategy is to broaden our product portfolio in order to mitigate the impact of this concentration, while pursuing our next financial milestone of $100 million in annual revenue. We believe that our acquisition of CBS will be a key component of our revenue growth and diversification strategy," he added. "With $1 to $2 million in revenue expected from CBS during the remainder of this year, we are raising the top of our 2019 revenue guidance range."

Third Quarter 2019 Revenue Highlights

Cell & Gene Therapy Market Segment

Gained 41 new cell and gene therapy customers.
Processed 18 new cross-reference requests for our FDA master files for CryoStor and HypoThermosol.
CryoStor and HypoThermosol are now estimated to be used in over 400 customer clinical applications.
Media and thaw product revenue was $3.4 million, representing 52% of total revenue with 19% growth over the prior-year period.
Announced the following customers have adopted the evo Cold Chain system for monitored shipments of cell and gene therapies: Adaptimmune, Autolus, Janssen, KBI Pharma, Mustang Bio, Nanjing Legend and Tessa Therapeutics.
Worldwide Distributor Network

Sales through our distributor network were $2.6 million, representing 40% of total revenue with 38% growth over the prior-year period.
Key worldwide distributors include STEMCELL Technologies, MilliporeSigma, Thermo Fisher, VWR, World Courier and QuickStat.
Third Quarter Operational Highlights

Completed the acquisition of SAVSU Technologies, Inc. ("SAVSU").
Formed cell and gene therapy bioproduction innovation co-investment accelerator program with Casdin Capital and announced initial strategic investments in iVexSol and Sexton Biotechnologies.
Successfully completed 19 audits of our quality system by cell and gene therapy direct customers and contract manufacturers.
Reached approximately 6 months of safety stock inventory of our critical media products in our Bothell and offsite warehouse to mitigate supply risk for cell and gene therapy customers.
Third Quarter and Nine Month 2019 Financial Results

BioLife Solutions is presenting various financial metrics under U.S. Generally Accepted Accounting Principles (GAAP) and as adjusted (non-GAAP). A reconciliation of GAAP to non-GAAP metrics appears at the end of this news release.

Revenue

Total revenue for the third quarter of 2019 increased 25% to $6.6 million compared with $5.3 million for the third quarter of 2018.
Sales of ThawSTAR automated thaw products totaled $324,000 for the third quarter.
Revenue from the rental of evo units and related accessory sales was $211,000 for the third quarter.
Total revenue for the nine months ended September 30, 2019 increased 34% to $19.1 million compared with $14.3 million for the first nine months of 2018.
Gross Margin

Gross margin (GAAP) for the third quarter of 2019 was 68.4% compared with 69.7% for the third quarter of 2018. Adjusted gross margin (non-GAAP) for the third quarter of 2019 was 69.2% compared with 69.7% in 2018.
Gross margin (GAAP) for the nine months ended September 30, 2019 was 70.2% compared with 68.5% for the same period in 2018. Adjusted gross margin (non-GAAP) for the nine months ended September 30, 2019 was 71.0% compared with 68.5% in 2018.
Operating Expenses

Operating expenses (GAAP) for the third quarter of 2019 were $5.1 million compared with $2.5 million for the third quarter of 2018. Adjusted operating expenses (non-GAAP) for the third quarter of 2019 were $4.5 million compared with $2.5 million in 2018.
Operating expenses (GAAP) for the nine months ended September 30, 2019 were $12.6 million compared with $7.2 million for the prior-year period. Adjusted operating expenses (non-GAAP) for the nine months ended September 30, 2019 were $11.6 million compared with $7.2 million in 2018.
Operating Income/(Loss)

Operating loss (GAAP) for the third quarter of 2019 was $597,000 compared with operating income of $1.2 million for the third quarter of 2018. Adjusted operating income (non-GAAP) for the third quarter of 2019 was $106,000 compared with $1.2 million in 2018.
Operating income (GAAP) for the nine months ended September 30, 2019 was $813,000 compared with $2.6 million for the same period in 2018. Adjusted operating income (non-GAAP) for the nine months ended September 30, 2019 was $2.0 million compared with $2.6 million in 2018.
Net Income Attributable to Common Stockholders

Net income attributable to common stockholders (GAAP) for the third quarter of 2019 was $9.3 million compared with $1.2 million for the third quarter of 2018. Included in net income for the third quarter of 2019 was a one-time gain of $10.1 million related to the purchase price accounting for the SAVSU acquisition. Adjusted net income attributable to common stockholders (non-GAAP) for the third quarter of 2019 was $215,000 compared with $1.2 million in 2018.
Net income attributable to common stockholders (GAAP) for the nine months ended September 30, 2019 was $10.6 million compared with $2.1 million for the same period in 2018. Included in net income for the first nine months of 2019 was a one-time gain of $10.1 million related to the purchase price accounting for the SAVSU acquisition. Adjusted net income attributable to common stockholders (non-GAAP) for the nine months ended September 30, 2019 was $2.4 million compared with $2.5 million in 2018.
Earnings per Share

Earnings per diluted share (GAAP) for the third quarter of 2019 were $0.37 compared with $0.05 for the third quarter of 2018. Included in earnings per share for the third quarter of 2019 was a one-time gain of $0.40 per share related to the purchase price accounting for the SAVSU acquisition. Adjusted earnings per diluted share (non-GAAP) for the third quarter of 2019 were $0.01 compared with $0.05 in 2018.
Earnings per diluted share (GAAP) for the nine months ended September 30, 2019 were $0.43 compared with $0.10 for the same period in 2018. Included in earnings per share for the nine months of 2019 was a one-time gain of $0.41 per share related to the purchase price accounting for the SAVSU acquisition. Adjusted earnings per diluted share (non-GAAP) for the nine months ended September 30, 2019 were $0.10 compared with $0.12 in 2018.
EBITDA

EBITDA, a non-GAAP measurement, for the third quarter of 2019 was $9.7 million compared with $1.2 million for the third quarter of 2018. Adjusted EBITDA for the third quarter of 2019 was $925,000 compared with $1.7 million in 2018.
EBITDA, a non-GAAP measurement, for the nine months ended September 30, 2019 was $11.0 million compared with $2.5 million for the prior-year period. Adjusted EBITDA for the nine months ended September 30, 2019 was $4.3 million compared with $4.0 million for the first nine months of 2018.
Roderick de Greef, BioLife Chief Financial Officer, remarked, "With the addition of CBS following the acquisitions of SAVSU and Astero earlier this year, along with expectation for continued growth in our cell and gene therapy franchise, our 2020 outlook is for revenue to increase by 69% to 90% compared with the midpoint of our revised 2019 revenue guidance."

2019 Financial Guidance

Management updated 2019 financial guidance to include contributions from Astero (beginning April 1), SAVSU (beginning August 8) and CBS (beginning November 12), as follows:

Total revenue is now expected to be $27.5 million to $31.5 million, representing growth of 39% to 60% over 2018; this compares with previous guidance for 2019 total revenue to be $27.5 million to $30.5 million. The acquisition of CBS is expected to contribute $1.0 million to $2.0 million in revenue for the remainder of 2019, offset by a reduction of $1.0 million in media revenue reflecting the order shortfall in the third quarter.
Gross margin is now expected to be 67% to 68%, compared with 69% in 2018; this compares with previous guidance for 2019 gross margin of 69% to 70%. Adjusted gross margin (non-GAAP) is now expected to be 68% to 69%, reflecting the impact of the SAVSU and CBS acquisitions.
Operating expenses are still expected to be $18.5 million to $19.5 million compared with $9.7 million in 2018. Adjusted operating expenses (non-GAAP) for 2019 are expected to be $16.5 to $17.5 million.
Affirmed expectation for full-year positive adjusted operating income, adjusted net income and adjusted EBITDA.
Preliminary 2020 Revenue Guidance

Based on the anticipated contributions from Astero, SAVSU and CBS, and continued growth in media revenue, management expects 2020 total revenue to be $50 million to $56 million, representing growth of 69% to 90% compared with the midpoint of 2019 revenue guidance.

Management will provide additional 2020 financial guidance during the 2019 fourth quarter and full year conference call, planned for March 2020.

Conference Call & Webcast

The Company will host a conference call and live webcast at 4:30 p.m. Eastern time today. To access the live webcast, please go to www.biolifesolutions.com/earnings/. Alternatively, you may access the live conference call by dialing (844) 825-0512 (U.S. & Canada) or (315) 625-6880 (International) with the following Conference ID: 7207519. A webcast replay will be available approximately two hours after the call and will be archived on www.biolifesolutions.com for 90 days.

On November 12, 2019 Alkermes plc (Nasdaq: ALKS) reported that its corporate presentation will be webcast live at the Stifel 2019 Healthcare Conference on Tuesday, Nov. 19, 2019 at 1:15 p.m. ET (6:15 p.m. GMT) from New York (Press release, Alkermes, NOV 12, 2019, View Source [SID1234551017]). In addition, Alkermes’ corporate presentation will be webcast live at the Jefferies London Healthcare Conference on Thursday, Nov. 21, 2019 at 4:00 p.m. GMT (11:00 a.m. ET) from London, U.K. These presentations may be accessed under the Investors tab on www.alkermes.com and will be archived for 14 days.

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On November 12, 2019 Kindred Biosciences, Inc. (NASDAQ: KIN), a commercial-stage biopharmaceutical company focused on saving and improving the lives of pets, reported financial results for the third quarter ended September 30, 2019 and provided updates on its programs (Press release, Kindred Healthcare, NOV 12, 2019, View Source [SID1234551016]). For the third quarter 2019, KindredBio reported net product revenues of $1.1 million and a net loss of $15.3 million, or $0.39 per share.

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"We are excited about the positive opinion in the European Union regarding the Mirataz submission and expect approval of the product candidate this year. By year-end, we anticipate multiple additional catalysts, including approval of dipyrone IV in the US," stated Richard Chin, Chief Executive Officer of KindredBio.

"Our quarterly revenues are still subject to fluctuations in distributor ordering patterns. As such, the third quarter result is not reflective of underlying demand as sales from distributors to veterinary clinics grew in the double-digits quarter-over-quarter."

Development and Corporate Updates

KindredBio recorded Mirataz (mirtazapine transdermal ointment) net product revenues of $1.1 million in the third quarter. Net product revenues were lower on a sequential basis due to several factors, including fluctuations in the ordering pattern by distributors. Sales from distributors to veterinary clinics grew 20% versus the second quarter and have increased consistently quarter-over-quarter since Mirataz’s launch. Market penetration reached approximately 51% in the third quarter, positioning Mirataz ahead of most key feline therapeutics at an equivalent stage of launch. Approximately 68% of all purchasing veterinary clinics placed re-orders, and average order size grew quarter-over-quarter.
On October 10, 2019, KindredBio announced the European Medicines Agency’s Committee for Medicinal Products for Veterinary Use adopted a positive opinion recommending marketing authorization of Mirataz (mirtazapine transdermal ointment) for bodyweight gain in cats experiencing poor appetite and weight loss resulting from chronic medical conditions. A marketing authorization decision from the European Commission is anticipated by mid-December.

The U.S. Food and Drug Administration has approved the safety and effectiveness technical sections for dipyrone injection for the control of pyrexia (fever) in horses. KindredBio expects approval of the product candidate by the end of November, dependent on satisfactory responses to outstanding Chemistry, Manufacturing, and Controls questions. Regulatory approval is subject to the typical risks inherent in such a process. Preparations for the commercial launch remain on track.
Dipyrone injection is expected to be the first FDA-approved product for the control of fever in horses. There are eight to nine million horses in the U.S. and currently more than one million are seen by a veterinarian for fever annually. Existing off-label treatments can have serious side effects.

In July 2019, KindredBio reported positive topline results from its pilot field effectiveness study of KIND-016, a fully caninized, high-affinity monoclonal antibody targeting interleukin-31, for the treatment of atopic dermatitis in dogs. Due to changes and enhancements to the manufacturing process during scale-up, the pivotal effectiveness study is now expected to start in 2020.
Almost all patients have been enrolled in the pilot effectiveness study for the company’s canine anti-IL-4/IL-13 SINK molecule, with results expected in the first quarter of 2020.

KindredBio is pursuing a multi-pronged approach toward atopic dermatitis, with a portfolio of promising biologics. Atopic dermatitis is an immune-mediated inflammatory skin condition in dogs. It is the leading reason owners take their dog to the veterinarian, and the current market size is more than $600 million annually and growing.

cGMP fill & finish for KindredBio’s feline recombinant erythropoietin was completed at the Elwood, Kansas biologics manufacturing facility in the third quarter of 2019, and the pivotal efficacy study has since been initiated. The product candidate is being developed for the management of non-regenerative anemia in cats. It has been engineered by the company to have a prolonged half-life compared to endogenous erythropoietin, a protein that regulates and stimulates production of red blood cells.
Anemia is a common condition that is estimated to afflict millions of older cats. It is often associated with chronic kidney disease, because kidneys produce erythropoietin and chronic kidney disease leads to decreased levels of endogenous erythropoietin. Chronic kidney disease affects approximately half of older cats, making it a leading cause of feline mortality. Human erythropoietins, which are multi-billion dollar products in the human market, have been shown to be immunogenic in many cats.

On August 1, 2019, KindredBio announced positive results from its pilot efficacy study of KIND-030, a monoclonal antibody targeting canine parvovirus (CPV). Pivotal studies for this molecule are expected to be completed in 2020. Approval is anticipated by late 2020 or early 2021.
CPV is the most significant cause of viral enteritis in dogs, especially puppies, with over 90% mortality rate if untreated. There are currently no approved or unapproved treatments for CPV. Currently, owners spend up to thousands of dollars for supportive care for dogs infected with CPV.

The pilot field effectiveness study for KindredBio’s anti-TNF antibody for canine inflammatory bowel disease (IBD) has been initiated with completion now expected in the first half of 2020, due to competing priorities for drug supply manufacturing.
The majority of canine IBD cases involve chronic states of diarrhea, vomiting, gastroenteritis, inappetence, and other symptoms, certain of which are cited as among the most frequent disorders impacting dogs. For certain dog breeds, the prevalence of diarrhea exceeds 5%. Existing treatments can have significant drawbacks, including limited diets and excessive antibiotic use, which can lead to owner frustration, lapses in treatment adherence, or poor quality of life for the affected animal.

The pivotal field efficacy study for KIND-014 for the treatment of gastric ulcers in horses is scheduled to start in the fourth quarter of 2019.
Third Quarter 2019 Financial Results

For the quarter ended September 30, 2019, KindredBio reported a net loss of $15.3 million or $0.39 per share, as compared to a net loss of $13.0 million or $0.39 per share for the same period in 2018. For the nine months ended September 30, 2019, the net loss was $45.7 million or $1.18 per share, as compared to a net loss of $34.2 million or $1.14 per share for the same period in 2018.

The company recorded $1.1 million in net product revenues for Mirataz for the third quarter and $2.9 million for the first nine months of 2019. Net product revenues for the same period in 2018 were $0.6 million. Mirataz became commercially available in July 2018.

The cost of product sales totaled $0.1 million in the third quarter and $0.4 million for the first nine months in 2019, resulting in a gross margin of 87% and 86%, respectively.

Total research and development expenses for the three and nine months ended September 30, 2019 were $7.3 million and $21.2 million, respectively, compared to $7.5 million and $18.6 million for the same periods in 2018. Stock-based compensation expense included in research and development expense was $0.5 million and $1.4 million for the three and nine months ended September 30, 2019 compared to $0.4 million and $1.3 million for the same periods in 2018. The $2.5 million year-over-year increase in research and development expenses was primarily due to higher headcount and related expenses as the company focuses on advancing its biologics programs, higher consulting expenses for quality assurance programs and increased capital equipment depreciation expense.

Selling, general and administrative expenses totaled $9.4 million and $28.3 million for the three and nine months ended September 30, 2019, compared to $6.6 million and $17.3 million for the same periods in 2018. The $11.1 million year-over-year increase is the result of being a commercial company, as well as increased expenses incurred by the Elwood, Kansas plant in the lead up to its commissioning. In addition, higher corporate infrastructure costs and stock-based compensation expense also contributed to the increase in expenses. Stock-based compensation expense included in selling, general and administrative expense was $1.4 million and $4.2 million for the three and nine months ended September 30, 2019, as compared to $1.2 million and $3.3 million for the same periods in 2018.

As of September 30, 2019, KindredBio had $87.6 million in cash, cash equivalents and investments, compared with $73.9 million as of December 31, 2018. Net cash used in operating activities for the first nine months of 2019 was approximately $42.6 million, offset by $43.1 million of net cash proceeds from an underwritten public offering of common stock in the first quarter of 2019 and $19.2 million from a debt financing in the third quarter of 2019, net of closing fees and expenses. The company also invested approximately $7.3 million in capital expenditures for the remaining portion of the build-out of its Elwood, Kansas manufacturing facility and the purchase of associated lab and manufacturing equipment for the facility.

On October 2, 2019, KindredBio announced the closing of a $50 million senior secured debt facility with investment affiliates managed by Solar Capital Partners, LLC. The non-dilutive financing agreement provides KindredBio with up to $50 million of borrowing capacity available in three tranches, each bearing interest at 1-Month LIBOR + 6.75% with a floor of 2.17%. The entire debt facility will mature on September 30, 2024.

With respect to spending in 2019, the company continues to expect operating expenses of between $57 million and $59 million, excluding the impact of stock-based compensation expense and the impact of acquisitions, if any. In addition, the company is on track with its $8.0 million to $10.0 million investment in capital expenditures for the year. KindredBio believes its existing cash, cash equivalents, restricted cash, short-term investments and additional draw down of $30 million from its debt facility, contingent on the achievement of certain milestones, will be sufficient to fund the current operating plan through 2021. Furthermore, the company plans to reduce both operating expenses and capital expenditures in 2020.

Webcast and Conference Call

KindredBio will host a conference call and webcast today at 4:30 p.m. Eastern time/1:30 p.m. Pacific time. Interested parties may access the call by dialing toll-free (855) 433-0927 from the US, or (484) 756-4262 internationally, and using conference ID 8153966. The call will be webcast live here, with a replay available at that link for 30 days.

Important Safety Information

Mirataz (mirtazapine transdermal ointment) is for topical use in cats only under veterinary supervision. Do not use in cats with a known hypersensitivity to mirtazapine or any of the excipients or in cats treated with monoamine oxidase inhibitors (MAOIs). Not for human use. Keep out of reach of children. Wear gloves to apply and wash hands after. Avoid contact with treated cat for 2 hours following application. The most common adverse reactions include application site reactions, behavioral abnormalities (vocalization and hyperactivity) and vomiting. Please see the full Prescribing Information.

On November 12, 2019 ViewRay, Inc. (Nasdaq: VRAY) reported financial results for the third quarter ended September 30, 2019 (Press release, ViewRay, NOV 12, 2019, View Source [SID1234551015]).

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Third Quarter 2019 Summary:

Total revenue was $20.9 million in the quarter, primarily from three revenue units, compared to $17.7 million, primarily from three revenue units, for the same period last year.
Received eight new orders for MRIdian systems, including three upgrades, totaling approximately $35 million in the third quarter of 2019, compared to orders totaling approximately $36 million for the same period last year.
Total backlog grew to $230.7 million as of September 30, 2019, compared to $200.9 million as of September 30, 2018.
Cash and cash equivalents were $90.8 million as of September 30, 2019.
The Company reaffirmed its full year 2019 guidance of revenue in the range of $80 million to $95 million, and cash use in the range of $80 million to $90 million.
"I am pleased with our Q3 results and the progress we are making across the organization," said Scott Drake, President and CEO. "Our differentiation in the market is rooted in unparalleled innovation and clinical data."

Three Month Results Ending September 30, 2019:

Total revenue for the three months ended September 30, 2019, was $20.9 million, compared to $17.7 million for the same period last year.

Total cost of revenue was $20.3 million, compared to $17.3 million for the same period last year.

Total gross profit was $0.6 million, compared to $0.4 million for the same period last year.

Total operating expenses were $32.3 million, compared to $24.5 million for the same period last year.

Net loss was $20.8 million, or $0.21 per share, compared to $32.9 million, or $0.39 per share, for the same period last year.

ViewRay had total cash and cash equivalents of $90.8 million at September 30, 2019.

Nine Month Results Ending September 30, 2019:

Total revenue for the nine months, primarily from 11 MRIdian revenue units, was $71.3 million compared to $60.3 million for the same period last year.

Total cost of revenue was $72.9 million compared to $54.3 million for the same period last year.

Total gross profit was $(1.5) million compared to $6.0 million for the same period last year.

Total operating expenses were $86.9 million compared to $59.6 million for the same period last year.

Net loss was $(85.0) million, or $(0.87) per share, compared to $(59.7) million, or $(0.82) per share, for the same period last year.

Financial Guidance:

The Company reiterated its 2019 guidance of revenue in the range of $80 million to $95 million, and total cash usage to be in the range of $80 million to $90 million.

Conference Call and Webcast

ViewRay will hold a conference call to discuss results on Tuesday, November 12, 2019 at 4:30 p.m. ET / 1:30 p.m. PT. The dial-in numbers are (844) 277-1426 for domestic callers and (336) 525-7129 for international callers. The conference ID number is 8250536. A live webcast of the conference call will be available on the investor relations page of ViewRay’s corporate website at www.viewray.com.

After the live webcast, a replay of the webcast will remain available online on the investor relations page of ViewRay’s corporate website, www.viewray.com, for 14 days following the call. In addition, a telephonic replay of the call will be available until November 19, 2019. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the conference ID number 8250536.

On November 12, 2019 Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical company focused on hospital acute care and gastroenterology reported third quarter 2019 financial results with net revenues of $10.4 million, up 22% over the prior year quarter (Press release, Cumberland Pharmaceuticals, NOV 12, 2019, View Source [SID1234551014]). Year-to-date net revenues were $33.9 million, up 24% from the prior year period. The Adjusted Earnings year-to-date were $3.5 million or $0.22 per diluted share. As of September 30, 2019, Cumberland had over $100 million in total assets, including just under $30 million in cash and marketable securities.

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QUARTER HIGHLIGHTS:

Announced a U.S. Food and Drug Administration (FDA) Orphan Drug Grant to advance a new Phase II clinical program for patients with Duchenne Muscular Dystrophy (DMD).
Provided the FDA with additional data in support of approval submission for a new line of methotrexate products designed for the treatment of patients with arthritis and psoriasis.
Pursued an update to the Caldolor label that includes new geriatric, shortened infusion, pediatric, and safety data.
Continued a company-wide strategic review of products, partners, and organization.
"There has been an abundance of activity here at Cumberland during the third quarter," said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. "We had a series of positive developments that helped us continue to make progress towards our goal of building a company that offers long-term, sustainable growth."

KEY DEVELOPMENTS:

Ifetroban

In September 2019, Cumberland announced the receival of FDA Orphan Drug Grant funding for a new Phase II clinical program. The Company has now initiated the clinical development of ifetroban for the treatment of cardiomyopathy associated with Duchenne Muscular Dystrophy (DMD). Based on pre-clinical findings, the FDA has cleared Cumberland’s application to study ifetroban in DMD patients, seven years of age and older. In addition, Cumberland was awarded just over $1 million in funding from the FDA through their Orphan Drug Grant program to support this Phase II DMD clinical study. This study is the first DMD clinical study approved for FDA Orphan Product Development funding.

DMD is a rare, fatal, genetic neuromuscular disease and is characterized by the progressive loss of muscle which results in deterioration of the skeletal, heart and lung muscles. This deterioration leads to loss of movement and wheelchair dependency. Heart muscle disease is now the leading cause of death in patients with DMD. There is currently no universally effective treatment for the cardiomyopathy associated with DMD.

Additional Phase II studies of ifetroban are underway including several investigator-initiated trials. The Company is awaiting further study results before deciding on the best path for approval for ifetroban, Cumberland’s first new chemical entity.

Methotrexate

In January 2019, Cumberland received notification from the FDA that the new drug application (NDA) for its new line of methotrexate products was complete and notified the Company of their acceptance for review, setting September 2019 as the Prescription Drug User Fee (PDUFA) action date for an approval decision. Since that time, Cumberland has had a number of communications with the FDA and addressed their questions through multiple amendments that were submitted to the application.

On August 22, 2019, the FDA sent Cumberland a goal extension letter in order to provide them with additional time to review the application setting a new PDUFA action date of early December 2019.

Caldolor

In January 2019, the FDA approved the application for Cumberland’s next generation Caldolor product, featuring a new, patented formulation in a more convenient-to-use package. In April 2019, the Company began initial shipments of the product to select customers. During the third quarter of 2019, there was a growing demand for the product from these select accounts and planning for a full-scale launch of this next generation product is underway.

In addition, Cumberland completed a submission to the FDA in support of an update to a Caldolor approval that included new geriatric, shortened infusion, pediatric, and safety data. Aiming to further expand the product’s label, the Company provided important data generated from its clinical studies regarding an optimal infusion time, additional safety information, as well as geriatric and pediatric administration. The revised label will also include a class label update on the use of NSAIDs with aspirin.

In early September 2019, the FDA informed Cumberland that the submission was not accepted for review because of the number of new claims. The FDA recommended splitting up the submission into several separate submissions, each containing a single proposed labeling claim or group of related labeling claims, with additional data in support of each claim. The Company is planning a Type A meeting to discuss the FDA’s recommendations.

Cumberland has also completed a study to evaluate Caldolor in newborns up to six months of age. The Company is still gathering the data from this study and will report top-line results as they are available. Filing for an additional label expansion with this new data will then be considered.

Cumberland Strategic Review

Earlier this year, Cumberland announced a strategic review of its brands, capabilities, and international partners. This review followed an accelerated business development initiative, which resulted in a series of transactions. Because of that progress, the Company felt that it was prudent to take a fresh look at its product portfolio, partners, and organization to ensure proper focus and capabilities.

As a result, Cumberland:

Expanded international arrangements through several new agreements, including a license with WinHealth Pharma for Vibativ in China and a license with R-Pharma JSC for Vibativ for Russia and several adjacent markets.
Added personnel to its corporate, sales, and medical teams.
During the third quarter of 2019, the Company:

Completed the assignment and amendment of a Commercialization Agreement with Dr. Reddy’s Laboratories Limited ("Dr. Reddy’s") for the registration and distribution of Vibativ in India. Dr. Reddy’s is a multinational pharmaceutical company based in Hyderabad, India. The company currently markets over 190 medications through their commercial operations in over 35 countries. Combined with their extensive network of manufacturing capabilities, Dr. Reddy’s generated over $2.2 billion in sales during their 2018 – 2019 fiscal year.
Extended the arrangements with Clinigen for Ethyol and Totect. On May 13, 2019, Cumberland entered into an agreement with Clinigen Healthcare Limited to conclude the license and distribution agreement for Ethyol and Totect. In early September 2019, Clinigen and Cumberland agreed to change the transition date to late December 2019. Under the terms of the Agreement, Cumberland will no longer distribute Ethyol or Totect after the transition date and will receive $5 million in financial consideration from Clinigen, paid over a two-year period.
Agreed to conclude a co-promotion agreement with Piramal Critical Care effective November 2, 2019. Piramal had been promoting Cumberland’s Caldolor and Vaprisol in hospitals that Cumberland does not cover. A transition plan has been agreed and implemented to return those accounts from Piramal to Cumberland.
FINANCIAL RESULTS:

Net Revenue: For the three months ended September 30, 2019, net revenues were $10.4 million, up 22% from $8.5 million the prior year period.

Net revenue by product for the three months ended September 30, 2019, included $3.3 million for Ethyol and $2.9 million for Kristalose. Net revenue for the Company’s other brands included $1.5 million for Vibativ, $1.2 million for Caldolor, $0.8 million for Acetadote (including the brand and Company’s Authorized Generic), and $0.5 million for its other brands.

For the nine months ended September 30, 2019, net revenues were $33.9 million, up 24% from $27.2 million for the nine months ended September 30, 2018.

Operating Expenses: Total operating expenses for the three months ended September 30, 2019 were $12.2 million, compared to $10.3 million during the prior year period. The primary drivers of this increase were the increase in sales, new cost of goods, and amortization expenses associated with the addition of Vibativ.

Total operating expenses for the first nine months of 2019 were $36.5 million compared to $32.4 million for 2018.

Earnings: Net income (loss) for the third quarter 2019 was $(2.0) million or $(0.13) a share, compared to $(1.6) million or $(0.11) a share for the prior year period.

Adjusted Earnings for the third quarter were $0.1 million or $0.01 per diluted share, up from $(0.8) million or $(0.05) per diluted share for the prior year period.

Adjusted Earnings for the first nine months of 2019 were $3.5 million or $0.22 per diluted share. The definition and reconciliation of Adjusted Earnings to net income (loss) is provided in this release.

Balance Sheet: At September 30, 2019, Cumberland had $29.2 million in cash and marketable securities, including approximately $27.0 million in cash and equivalents. Total assets at September 30, 2019 were $103.8 million. Total liabilities were $52.1 million, including $20.0 million outstanding on the Company’s revolving line of credit, resulting in Total shareholder’s equity of $51.7 million.

Conference Call and Webcast

A conference call and live Internet webcast will be held on Tuesday, November 12, 2019 at 4:30 p.m. Eastern Time to discuss the Company’s third quarter 2019 financial results. To participate in the call, please dial 877-303-1298 (for U.S. callers) or 253-237-1032 (for international callers). A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 855-859-2056 (for U.S. callers) or 404-537-3406 (for international callers). The Conference ID for the rebroadcast is 9865969. The live webcast and rebroadcast can be accessed via Cumberland’s website at View Source