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.
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
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