On November 9, 2021 Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical company, reported that is providing a company update and third quarter 2021 financial results (Press release, Cumberland Pharmaceuticals, NOV 9, 2021, View Source;company-update-301420388.html [SID1234594916]). Net revenues from continuing operations during the quarter were $8.1 million and totaled $27.7 million for the first nine months of 2021, up 1.8% compared to the same period in 2020. The company also recorded an additional $0.5 million in revenue during the third quarter and $1.5 million year to date, associated with divested product rights for two brands it is no longer distributing.
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The Company’s financial position included $87.6 million in total assets, with $25.8 million in cash, $41 million of total liabilities, and $46.8 million of shareholders’ equity at the end of the quarter.
"We delivered another steady quarterly performance when factoring in the challenges of operating during the pandemic," said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. "Our diversified portfolio has been critical in keeping our forward progress during this time, and we are seeing signs that things are slowly starting to return to a more normal operating environment. Our team remains committed to advancing our mission of improving patient care through the delivery of high-quality medicines through the end of the year and beyond."
RECENT COMPANY DEVELOPMENTS:
RediTrex Launch
In late 2019, Cumberland received approval from the U.S. Food and Drug Administration ("FDA") for its New Drug Application for RediTrex, the Company’s methotrexate product line. RediTrex is a new line of pre-filled syringes specifically designed for ease of handling and dosing accuracy for the subcutaneous administration of methotrexate in patients with arthritis and psoriasis.
In late 2020, the Company received initial product supplies and then provided shipments of RediTrex to select accounts. Due to the pandemic, Cumberland delayed the national launch of the product, which was implemented during the third quarter of 2021.
RediTrex treats patients with severe, active rheumatoid arthritis, and polyarticular juvenile idiopathic arthritis who have difficulty tolerating or responding to orally delivered methotrexate. It is also approved for symptomatic control of severe, recalcitrant, disabling psoriasis in adults who are not adequately responsive to other forms of therapy.
With more than 54 million Americans living with some form of arthritis, the disease is among the most common causes of work disability in the U.S., according to the CDC. The oral form of methotrexate is typically the first line of treatment for rheumatoid arthritis. As the disease progresses, the dose must be increased to stay effective, often causing intolerable gastrointestinal side effects. Injectable methotrexate has been proven to be more effective than oral delivery, with fewer gastrointestinal reactions. Because of the increased efficacy and tolerability, injectable methotrexate can delay the need to move to costly biologics, lowering overall patient treatment costs. Once disease progression requires the use of biologics, continuing the treatment of injectable methotrexate along with the biologic has been shown to increase overall efficacy.
Other injectable methotrexate options available may not optimally meet the needs of an arthritis patient. Patients are offered either a vial and syringe for self-injection, or the use of an expensive autoinjector. The vial and syringe method can be difficult for a patient to handle due to limited dexterity in their hands. Additionally, obtaining the exact dose needed while preventing skin exposure to the caustic methotrexate can be quite challenging for many patients. The autoinjectors provide a better alternative to the vial and syringe, but they remove injection control from the patient and can be painful to administer. They are also the most expensive methotrexate delivery.
ESG Report
In July 2021, Cumberland released its second annual Sustainability Report (the "2020 Sustainability Report"), which details the Company’s activities pertaining to its environmental, social and governance ("ESG") matters. After issuing its inaugural ESG report last year (the "2019 Sustainability Report"), Cumberland remains committed to sustainability and to maintaining transparency of its corporate operations. As the largest biopharmaceutical company founded and headquartered in the Mid-South, the Company holds itself to the highest standards of ethical practices and understand the importance of recognizing and addressing its impact on its constituents, the community and the environment.
The 2020 Sustainability Report notes that Cumberland provided nearly 2.5 million patient doses of its products, safely disposed of over 4,000 pounds of expired and damaged products and had no product recalls. Cumberland also had no Company brands listed on the FDA’s MedWatch Safety Alerts for Human Medical Products, no Company product issues identified by FDA from their Adverse Event Reporting System and no clinical trials terminated due to failure to practice good clinical standards.
The 2020 Sustainability Report also highlights several initiatives Cumberland implemented as part of its commitment to delivering high-quality pharmaceutical products to improve patient care. For example, the Company continued a program to serialize all commercial products sold in the United States, allowing it to track every unit distributed, which helps to prevent counterfeit drugs from entering the market under the Cumberland brand. In addition, through its coupon program, Cumberland can cover up to 90% of patient prescription costs for its gastrointestinal products.
The 2020 Sustainability Report also highlights Cumberland’s investment in its employees through its continuing education programs, employee development initiatives and employee recognition awards. Cumberland’s workforce is 46% women – and 18% of its employees are minorities.
Ifetroban Clinical Studies
Cumberland has been evaluating its ifetroban product candidate in a series of clinical studies. The Company is sponsoring Phase II clinical programs to evaluate its ifetroban product candidates in 1) patients with cardiomyopathy associated with Duchenne Muscular Dystrophy, a rare, fatal, genetic neuromuscular disease that results in deterioration of the skeletal, heart and lung muscles, 2) Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs and 3) Aspirin-Exacerbated Respiratory Disease, a severe form of asthma.
Enrollment in these clinical studies was interrupted due to the COVID-19 pandemic. However, many of Cumberland’s clinical study sites have reopened and resumed screening of patients for potential participation into its studies. The Company is awaiting results from the studies underway before deciding on the best development path for the registration of ifetroban, its first new chemical entity.
In September 2021, Cumberland’s Board of Directors approved a new clinical program for the use of ifetroban to treat Progressive Fibrosing Interstitial Lung Diseases ("PF-ILDs"). Nonclinical studies are complete, and the resulting manuscript has been prepared and submitted for publication. A Phase II clinical study is planned and an application to the FDA is in preparation to support this new clinical program.
Additional pilot preclinical and clinical studies of ifetroban are underway, including several investigator-initiated trials.
Hyponatremia Publication
The Health Outcome Predictive Evaluation (HOPE) COVID-19 Registry Analysis, an international study of over 4,000 patients published in November 2020, found that patients hospitalized with COVID-19 had a high risk of developing hyponatremia. These COVID-19 patients also had a higher incidence of mortality due to their hyponatremia. The study results support the use of an intravenous vaptan to treat hyponatremia in critically ill patients afflicted with COVID-19.
Hyponatremia, an imbalance of serum sodium to body water, is the most common electrolyte disorder among hospitalized patients. Cumberland’s Vaprisol product is one of two branded prescription products indicated for the treatment of hyponatremia, and the only intravenously administered branded treatment. Vaprisol has a proven day-1 response rate to normalize serum sodium levels in hyponatremic patients and move them out of the Intensive Care Unit as efficiently as possible.
New Line of Credit
On October 28, 2021, Cumberland entered into a Fourth Amendment to the Revolving Credit Note and Fifth Amendment ("Fifth Amendment") to the Revolving Credit Loan Agreement with Pinnacle Bank (the "Pinnacle Agreement"). The original Pinnacle Agreement was dated July 31, 2017 and the Fifth Amendment extended the term of the loan agreement for a three-year period ending October 1, 2024. The facility provides for a principal available for borrowing of up to $15 million and an opportunity to request an increase in availability to $20 million, upon the satisfaction of certain conditions and approval by Pinnacle Bank. The interest rate on funds borrowed under the facility ranges from 30-day LIBOR plus 175 to 275 basis points depending on the funded debt ratio.
Vibativ International Agreements
On August 25, 2021, Cumberland signed an agreement with Verity Pharmaceuticals International Limited to license and commercialize Vibativ in Puerto Rico. Verity is a specialty pharmaceutical company with commercial operations in the U.S. and Canada.
Vibativ is a patented, FDA-approved injectable anti-infective for the treatment of certain serious bacterial infections, including hospital-acquired and ventilator-associated bacterial pneumonia, and complicated skin and skin structure infections. It addresses a range of Gram-positive bacterial pathogens, including those that are considered difficult-to-treat and multidrug-resistant. In November 2018, Cumberland reached an agreement to acquire Vibativ from Theravance Biopharma and assume global responsibility for the product.
SciClone Pharmaceuticals (Holdings) Limited has licensed Cumberland’s Vibativ product for sale and distribution in China. In February 2021, SciClone completed an initial public offering and listing of their shares on the Hong Kong stock exchange. During the third quarter of 2021, SciClone submitted an application to the Chinese regulatory authority for the approval of Vibativ in that country. In September 2021, the filing was accepted by the regulatory agency for review. SciClone expects a review period of up to twelve months for their application and believes that the potential for Vibativ in China may be significant.
FINANCIAL RESULTS:
Net Revenues: For the three months ended September 30, 2021, net revenues from ongoing operations were $8.1 million, compared to $9.3 million for the prior year period. The company also recorded an additional $0.5 million in revenue during the third quarter associated with divested rights to products that the company no longer distributes.
Net revenue by product for the third quarter 2021, included $4.0 million for Kristalose, $1.9 million for Vibativ, $1.3 million for Caldolor, and $0.3 million for Vaprisol.
Year-to-date 2021 net revenues were $27.7 million, up 1.8% from $27.2 million during the first nine months of 2020. There were additional revenues of $1.5 million in 2021 associated with the divested product rights.
Year-to-date 2021 net revenues by product were $12.3 million for Kristalose, $8.8 million for Vibativ, $3.7 million for Caldolor and $1.9 million for Vaprisol.
Operating Expenses: Total operating expenses for the three months ended September 30, 2021, were $9.6 million, compared to $10.5 million during the prior year period.
Earnings: Net income (loss) for the third quarter 2021 was $(1.1) million or $(0.07) a share, compared to $(0.5) million or $(0.03) a share for the prior year period. Adjusted earnings (loss) for the third quarter was $(0.3) million, compared to $0.2 million for the prior year period.
Year-to-date net income (loss) in 2021 was $0.3 million, compared to $(2.5) million for the same period last year. Adjusted earnings for the first nine months of 2021 were $0.7 million, compared to an adjusted loss of $(0.3) million during the same period in 2020.
Balance Sheet: At September 30, 2021, Cumberland had $87.6 million in total assets including $25.8 million in cash and cash equivalents. Total liabilities were $41 million, including $15 million outstanding on the Company’s revolving line of credit, resulting in total shareholders’ equity of $46.8 million.
CONFERENCE CALL & WEBCAST:
A conference call and live internet webcast will be held on Tuesday, November 9, at 4:30 p.m. Eastern Time to discuss the 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 9476299. The live webcast and rebroadcast can be accessed via Cumberland’s website at View Source