On March 18, 2020 Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical company focused on hospital acute care and gastroenterology, reported fourth quarter and full year 2019 financial results (Press release, Cumberland Pharmaceuticals, MAR 18, 2020, View Source [SID1234555678]). Net Revenues for the fourth quarter were $13.7 million, and for the full year 2019, Net Revenues totaled $47.5 million, a 17% increase over the prior year.

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!

As of December 31, 2019, the total assets of the Company grew to $104.5 million, including $28.2 million in cash and investments. Total Liabilities were $53.5 million, and Total Shareholder’s Equity was $51.1 million. Cumberland also has available $44.1 million in tax net operating loss carryforwards, resulting from the prior exercise of stock options.
Fourth Quarter and Annual Highlights:

Received FDA approval for RediTrex line of injectable methotrexate products

Completed initial launch of Caldolor Next Generation product

Completed strategic review of brands, capabilities, and international partners

Initiated clinical program to study ifetroban in patients with Duchenne Muscular Dystrophy

Completed clinical study of Caldolor in children from birth to six months of age

"During 2019, we made significant progress in advancing our major initiatives and accomplishing many key objectives," said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. "We are working hard to build a specialty pharma business that delivers sustained growth and profitable operations." He continued, "And I’d like to thank our team for all their fine efforts and valuable contributions."

At the beginning of 2019, Cumberland commenced 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 of the strategic review:
Cumberland executed a License and Distribution agreement with HongKong WinHealth Pharma Group Co. Limited ("WinHealth") for Caldolor and Acetadote in China and Hong Kong. Cumberland also entered into a Strategic Alliance agreement with WinHealth to explore future business opportunities that will further the mission and goals of each organization.
The Company also completed an agreement with Hikma Pharmaceuticals LLC to register and distribute Vibativ in the Middle East, finalized arrangements with R-Pharma JSC for ongoing distribution of Vibativ in Russia and Eastern Europe, and completed an agreement with Dr. Reddy’s Laboratories Limited for the registration and distribution of Vibativ in India.
Cumberland concluded its agreement with Clinigen Group plc ("Clinigen") for the distribution and support for Ethyol and Totect. As a result, Cumberland will no longer be involved with the distribution, marketing, and promotion of Ethyol and Totect in the United Stated. At the end of 2019, the Company transitioned the responsibilities of both products back to Clinigen. Cumberland will receive $5 million in financial consideration paid over the two-years following the transition date of December 31, 2019.
Cumberland’s newest marketed brand, Vibativ (telavancin), was the subject of two favorable clinical publications during 2019. One study showed numerically superior cure rates of telavancin compared to vancomycin within a subset of patients who had hospital-acquired pneumonia. Another study detailed the positive clinical outcomes that resulted from treating multiple infection types with Vibativ, including complicated skin and skin structure infections, bone and joint infections, bacteremia and endocarditis, and lower respiratory tract infections.
Meanwhile, Cumberland continued to advance its clinical programs in 2019. Near the end of 2019, Cumberland was awarded $1 million in grant funding from the FDA to support a Phase II clinical program to study ifetroban for the treatment of cardiomyopathy associated with Duchenne Muscular Dystrophy ("DMD"). 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.
Early in 2019, Cumberland received FDA approval for its next generation of Caldolor, featuring an improved formulation in a ready-to-use presentation. The Company then commenced an initial launch focused on a select group of key hospitals across the United States. During the third and fourth quarters of 2019, there was a growing demand for the new product from the select accounts and Cumberland began planning for a full-scale national launch in early 2020.
Cumberland also completed its study of Caldolor in patients ranging from newborn to six months of age. Topline results from this study show no safety concerns and similar blood levels to that of older children. Cumberland is now finalizing the study report for submission to the FDA and will pursue label expansion based on this information.
Near the end of 2019, Cumberland received FDA approval for RediTrex, its new line of injectable products designed for treating patients with arthritis and psoriasis. The Company now is actively preparing for the national launch of RediTrex in 2020.

FINANCIAL RESULTS:
Net Revenue: For the three months ended December 31, 2019, net revenues were $13.7 million, up 1% from $13.5 million for the prior year period. Net revenue by product for the three months ended December 31, 2019, included $4.4 million for Ethyol, $3.2 million for Kristalose, $2.5 million for Vibativ, $1.7 million for Caldolor, and $1.2 million for Acetadote, which included the Company’s Brand and Authorized Generic products.
For the year ended December 31, 2019, net revenues were $47.5 million, a 17% increase compared to $40.7 million for the year ended December 31, 2018.
Operating Expenses: Total operating expenses for the three months ended December 31, 2019 were $14.7 million, down from $15.8 million for the prior year period. Total operating expenses for the year ended December 31, 2019 were $51.2 million, compared to $48.1 million for 2018 . The full-year expense increases include additional costs of products sold and an increase in amortization, a non-cash expense.
Adjusted Earnings: Adjusted Earnings for the three months ended December 31, 2019 were $1.5 million, or $0.09 per share, compared to $1.6 million, or $0.10 per share in for the prior year period. Adjusted Earnings for the full year ended December 31, 2019 were $5.0 million, or $0.32 per share, a significant increase over the loss of $(0.5) million, or $(0.03) per share in 2018.
This performance measure represents net income attributable to common shareholders with adjustments for the impact of income taxes, depreciation, amortization, share based compensation expenses, Vibativ costs of products sold, and expenses that are non-core to the operating performance of the period. The definition and the reconciliation of Adjusted Earnings are provided in this release.
Balance Sheet: At December 31, 2019, Cumberland had $28.2 million in cash and marketable securities. Total assets at December 31, 2019 were $104.5 million. Total Liabilities were $53.5 million, including $18.5 million outstanding on the Company’s revolving line of credit and $8.6 million related to contingent liabilities related to the Vibativ acquisition, resulting in Total Shareholder’s Equity of $51.1 million.

Conference Call and Webcast
A conference call and live Internet webcast will be held on Wednesday, March 18, 2020 at 4:30 p.m. Eastern Time to discuss the Company’s fourth quarter and annual 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 9759981. The live webcast and rebroadcast can be accessed via Cumberland’s website at View Source