Cumberland Pharmaceuticals Inc (CPIX) 2025 Q1 法說會逐字稿

Reported at the company's request and will be archived on its website for one year from today's date. I would now like to turn the call over to Molly Agus, account supervisor at the Dalton Agency who handles Cumberland's communications.

Molly, please proceed.

Hello, everyone, and thank you for joining us today.

This afternoon, Cumberland issued a press release announcing its first quarter financial results.

The release also provided an operational update, including key developments during the quarter.

The release, which includes the related financial tables, can be found on the company's website at www.cumberlandPharmadotcom.

Management will share an overview of those financial results during today's call. They'll also provide an overall company update, including a discussion of Cumberland's brands, pipeline, and partners.

Participating in today's call are A.J. Kazimi, Cumberland's Chief Executive Officer, along with Todd Anthony, Vice President Organizational Development, and Jon Hamm, Chief Financial Officer.

Please keep in mind that their discussions may include some forward-looking statements as defined in the Private Securities Reform Act.

Those statements reflect the company's current views and expectations concerning future events. It may involve risks as well as uncertainties.

There are many factors that could affect Cumberland's future results, including natural disasters, economic downturns, public health epidemics, international conflicts, trade restrictions, and others that are beyond the company's control.

Those issues are described under the caption risk factors in Cumberland's Form 10K and any additional updates filed with the SEC.

Any forward-looking statements made during today's call are qualified by those risk factors.

Despite the company's best efforts, actual results may differ materially from expectations.

The information shared on this call should be considered current as of today only.

Also, please remember that the company isn't responsible for updating any forward-looking statements, whether as a result of new information or due to future developments.

During today's call, there will be references to several of Cumberland's marketed brands. Full prescribing and safety information for each brand is included on the individual product websites, and you can find links to those sites on the corporate website at www. CumberlandPharmadotcom.

The company will also be providing some non-GAAP financial measures with respect to its performance. An explanation and reconciliation to GAAP measures can be found in the financial tables of earnings release, which I noted was issued earlier this afternoon.

If you have any questions, please hold them until the end of the call, at which point we'll be happy to answer them.

Management is also prepared to hold a follow-up conversation with shareholders after the call if you prefer.

And with that introduction, I'll turn the call over to Cumberland's Chief Executive Officer, A.J. Kazimi.

Thank you, Molly, and good afternoon, everyone. We appreciate you joining us today.

As Molly mentioned during the call, we'll provide a review of our financial results for the first quarter of 2025, and we'll also discuss key developments that occur during the period.

So let's get started.

We've enjoyed a strong start to the year.

There were a series of positive developments during the 1st quarter which we'll discuss today that bolster our optimistic view about the company's future.

Our portfolio of FDA approved brands delivered combined revenues of $11.7 million during the first quarter, a 38% increase over the prior year period.

Our balance sheet also improved, with $70 million in total assets, including $50 million in cash, along with a significant decrease in debt, resulting in total liabilities of $42 million and shareholders' equity of $51 million.

This significant growth was fueled by a $3 million milestone payment associated with the approval of our brand in China.

As a result, we delivered a net profit of $1.26 million for the quarter.

And adjusted earnings of $2.4 million in cash flow from operations of $3.9 million.

In February, we announced positive top line results from the phase two study evaluating our [ifetroban] product candidate in patients with Duchenne muscular dystrophy or DMD.

We believe this marks a breakthrough for these patients, as it's the first successful phase 2 study specifically targeting the cardiac complications of their condition.

The study results were selected for a late breaking presentation in March at the Muscular Dystrophy Association's clinical and scientific conference. That platform allowed us to share our promising results with the global DMD community, which included leading researchers, clinicians, and patient advocates who are all working tirelessly to improve outcomes for those affected by this devastating disease.

Next step for our DMD program include further data analysis and completion of a full study report in preparation for an end of phase two meeting with the FDA to to determine the requirements for the product's approval.

Meanwhile, we were delighted to learn that our potent antibiotic Vibative received approval from the regulatory authorities in China.

That milestone provides us with access to the world's second largest pharmaceutical market for the product, and we look forward to the launch of Vibativ expected later this year.

So, with that overview, I'd now like to turn to Todd Anthony, Cumberland's Vice President of organizational development, to further discuss both our brands and our organization.

Todd.

Well, thank you, AJ.

In March, we hosted our spring national sales meeting here in Nashville as we launched a series of new marketing initiatives and equipped our sales teams in their efforts to build our brands.

As a reminder, we now have a total of 50 individuals across the country interacting with the medical community in support of our FDA approved products through three national sales divisions.

Our hospital sales division calls on key institutional accounts across the country in support of Caldolor and [Vibativ].

Our field sales division covers select office-based physicians featuring Kristalose and also promotes Caldolor to select outpatient surgery centres.

And finally, our recently expanded Cumberland Oncology division calls on cancer clinics promoting our Sancuso product.

I'd now like to share an update on each of our major brands, starting with Vibativ, our potent intravenous antibiotic designed for difficult to treat infections such as hospital acquired and ventilator associated pneumonia, as well as complicated skin and skin structure infections caused by certain gram positive bacteria, including those that are multi-drug resistant.

A 2024 report from the World Health Organization found that antimicrobial resistance is becoming an urgent global health and socioeconomic crisis.

Further, they noted that the worldwide rise in antibiotic resistance poses a significant threat, diminishing the effectiveness of many common antibiotics against widespread bacterial infections.

Recall that unlike many antibiotics that are losing the battle to fight bacteria, Vibativ's unique dual method of action was specifically designed to address drug resistant bacteria.

We therefore believe it has life saving potential to help many patients amid this growing antibiotic resistance crisis which faces a fragile pipeline of new antibiotic development.

To reinforce this message, we are conducting a series of infectious insights which are discussions with infectious disease experts that we're disseminating across the country. These video vignettes share the opportunity to utilizeybaiv as a solution for select patient types where other products have failed.

In addition, a new edition of From the bench to the Bedside case study was published in the February issue of Infectious Disease Special Edition.

The case involved an individual who underwent a total knee replacement and developed a post operative infection requiring an additional surgery to clean the wound and obtain wound cultures which happened to be positive for methicillin resistant Staph aureus.

With both in-vitro and in-vivo studies demonstrating vibative's efficacy in treating difficult biofilm associated infections, vibative becomes a viable option when first line treatments fail.

Moving next to Kristalose, our prescription strength laxative provided in a convenient pre-measured powdered dose that dissolves quickly in just four ounces of water, resulting in a clear, taste-free and grit-free solution.

As previously mentioned, we found that the brand performs best in states where we have Medicaid coverage such as Texas, New York, Wisconsin, Virginia, Louisiana, and now Maine. And we are seeing the favorable impact on the product as a result of these formulary additions.

We are implementing a special initiative to increase our presence and share a voice in these states and believe that this new coverage is contributing to the growth of the product.

Additionally, we are enhancing support for Kristalose by updating key marketing materials to better educate healthcare providers and patients about the product's benefits.

We are also establishing a new specialty distribution partnership to improve patient access to the product.

Let's shift now to Caldolor, our intravenous ibuprofen product, with its newest pediatric labelling cleared with the FDA.

Caldolor is now the only non-opioid product approved to treat pain in infants that's delivered by injection. We are featuring Caldelo through sales and marketing initiatives, highlighting this new indication, resulting in growing use of the product in our country's children's hospitals.

Moving next to Sanuso, the only transdermal patch FDA approved for the management of chemotherapy induced nausea, we continue to see favourable sales results following the expansion of our oncology sales force.

We recently introduced a revised sampling program that expands patient trial and use of the product and are updating messaging to better connect with healthcare providers and patients. Additionally, we are maximizing the use of a new hub service capability to provide enhanced patient support, including prior authorization insurance support and co-pay savings for the patients.

Let's now review our aprozole product, the only intravenously administered vasopressin receptor antagonist.

It's used to raise serum sodium levels in hospitalized patients with hyponatremia, the most common electrolyte disorder among these patients.

Recall that our new manufacturing and distribution partner for Vaprisol successfully began producing the product in their facility and is now working with the FDA to address several Form 483 and warning letter issues in a timely manner.

We next expect to file for the approval to manufacture branded Vaprisol once all FDA issues at the new site are resolved.

Finally, our marketing team recently partnered with an award winning full service digital marketing agency who will provide Cumberland with tailored data-driven strategies across all digital channels to drive our visibility and engagement for all four of our actively marketed brands.

With the understanding that over 65% of prescription decisions are influenced by online research, we are confident that this investment will lead to a significant return on our investment.

That completes my updates for today. And so I'll turn it back to you, AJ.

Thank you, Todd.

I'd like to provide an update on our ongoing clinical activities. We continue to progress our pipeline of innovative products designed to improve patient care and their quality of life.

Ifetroban product a candidate, a potent and selective [thromboxane] receptor antagonist, is being evaluated in three phase two clinical trials for patients with a series of unmet medical needs.

It's now been dosed in nearly 1,400 subjects and has been found to be safe and well tolerated in those individuals, resulting in an outstanding safety database.

As I mentioned, we recently completed a Phase two study in patients with cardiomyopathy associated with Duchenne muscular dystrophy, or DMD, a rare fatal genetic neuromuscular disease which results in the deterioration of the skeletal lung and heart muscles.

Recall previous studies conducted at Vanderbilt University Medical Center demonstrated that ifitroban is protective against cardiomyopathy in several preclinical models of muscular dystrophy.

And those results were published in the Journal of the American Heart Association.

And based on those promising results, we became the first recipient of an FDA Office of Orphan Products clinical trial grant for DMD, which provided us with over a million dollars in funding for our phase two clinical study.

The trial enrolled 41 DMD patients who received either a low dose of Ifetroban, 150 mg a day, a high dose of Ifetroban, 300 mg a day, or placebo.

The study's primary endpoint was improvement in the heart's left ventricular injection fraction, or LVEF, and key findings from the trial included compared to the placebo group, the high dose Ifetroban treatment resulted in an overall 3.3% improvement in the patient's LVEF.

That difference resulted from the high dose cifitraban group showing a 1.8% increase in their LVEF while the placebo group showed the expected decline, which was 1.5%. Again, the difference was 3.3%.

Then compared with propensity matched natural history controls, the difference was even more pronounced with high dose treatment providing a significant 5.4% improvement in LVEF because the natural history control patients experienced a 3.6% decline.

And importantly, both doses were well tolerated with no serious drug related events.

Other products for DMD patients typically target the musculoskeletal impact of the disease, and our program is designed to address the patient's cardiomyopathy, which is a thickening of the muscle that weakens the heart and therefore our product is applicable to all DMD patients, targeting the cardiovascular condition that often leads to their death.

The next steps for this program include completion of the full data analysis and study report in preparation for a meeting with the FDA to determine the remaining path for the product's development, approval, and commercialization.

Meanwhile, our two other company sponsored phase two clinical programs are well underway.

The first involves patients with systemic sclerosis or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs.

Enrolment in that study is now complete. We are monitoring the clinical sites in preparation to lock the database and begin evaluating the results, and we do expect to announce top line results from this study later in the year.

We're also developing a Ifetroban to treat idiopathic pulmonary fibrosis, the most common form of progressive fibrosis interstitial lung disease.

Recent studies have shown that Ifetroban band can both prevent and enhance resolution of lung fibrosis in multiple preclinical models.

Patient enrollment is now well underway in medical centers across the United States in this pulmonary fibrosis study.

In addition to these sponsored trials, there are several others pre-clinical and pilot patient studies of Ifetroban underway, including several investigator initiated trials.

You see, we believe Ifitraband, our first new chemical entity, has the potential to benefit many patients, and we look forward to sharing our further progress with the DMD program as well as the results from the other company sponsored studies as they emerge.

So, with that update on our clinical activities, I'd now like to turn it over to our Chief Financial Officer John Hamm to review our first quarter 2025 financial results, John.

Thank you, AJ.

For the three months ending March 31, 2025, net revenue from continuing operations was $11.7 million which represented a $3.2 million dollar or 38% increase over the prior year period.

Net revenue by product for the first quarter of 2025 included $3.5 million for Kristalose, $2.3 million for Sancuso, $1.4 million for Vibativ, and $1.3 million for Caldolor.

Turning to our expenditures, total operating expenses for the first quarter were $10.4 million. Net income was $1.3 million for the first quarter, and when non-cash expenses are added back, the result of adjusted earnings were $2.4 million or $0.16 a share.

Also, please note that the adjusted earnings calculations do not include the additional benefit of the $0.1 million of Vibativ cost of goods during the first quarter. Those goods were received as part of the product's acquisition.

As a reminder, we're pleased to see that the additions of Vibativ and Sancuso to our product portfolio continue to positively impact our financial performance.

As a result of the Viva acquisition, a total of $34 million in new assets were added, including approximately $21 million in inventory, $12 million of intangible assets, and $1 million of goodwill.

The estimated value of those assets was $11 million at the end of the first quarter. The financial terms for the Vivata trans transaction included a $20 million payment upon closing and a subsequent $5 million milestone payment.

We also continue to provide royalties tied to product sales. Sanuso added a total of $19 million in new assets, including approximately $4 million in inventory and $14 million in intangibles. The estimated value of those assets was $9.5 million at the end of the first quarter.

We provided $13.5 million at closing for the Sanuso acquisition. We also paid $1.5 million in milestone payments. There are ongoing royalties that we pay based on the brand sales.

Turning to our balance sheet as of March 30th, 2025, we had $69.9 million in total assets, including $15 million in cash and cash equivalents, along with a significant decrease in debt resulting in total liabilities of $41.6 million.

Including $5.2 million on our credit facility and shareholders equity of $28.7 million. We continue to hold a bank line of credit which provides up to $20 million in capital and provides the ability for Cumberland to increase the amount to $25 million under certain conditions.

The interest rate is based on benchmark term sour and is subject to one financial covenant determined on a quarterly basis.

We are also continuing the process of implementing new trading plans for our board members who will purchase Cumberland shares throughout the year to increase their holdings in the company.

Lastly, I'd like to note that Cumberland continues to hold over $53 million in tax net operating loss carried forwards, primarily resulting from the prior exercise of stock options, and that completes our financial report for the first quarter of 2025.

Back to you, AJ.

Very good, John.

We recently released our 2024 annual report, which includes last year's results and milestones. You can find a copy of that report on our website under the Investor relations tab.

In April we held our annual shareholder meeting in Nashville, and all of the proposals presented in our proxy were approved, including the reappointment of three directors to our board.

Well, overall, it's been a strong start to the year, and we believe it's a very exciting time for our company. We continue to support our FDA approved portfolio through our three dedicated sales divisions, each focused on strategic segments of the healthcare market.

We remain particularly encouraged by the positioning of vibative and as global concern over antimicrobial resistance grows, Vibata's dual mechanism of action offers a meaningful solution for patients, and we're reinforcing that message through national initiatives.

We're also seeing promising momentum with Kristalose, especially in Medicaid covered states. The product's growth is being further supported through updating marketing. Initiatives and enhanced pharmacy partnerships designed to streamline patient access.

Our Caldolor brand continues to expand its footprint following FDA approval of its pediatric use, and as the only injectable non-opioid treatment approved for infants, it's gaining traction in the country's children's hospitals.

And we've also seen a positive response to our new support programs and expanded sales division for Sancuso.

Looking ahead, we expect continued momentum across our approved brands, further progress and milestones in our clinical pipeline, and new opportunities through targeted acquisitions.

We look forward to providing updates on further developments as the year progresses.

And now we can open the call to any questions. Operator, please proceed.

Thank you, sir. Ladies and gentlemen, that concludes the company's presentation, and we will now open the call for any questions.

(Operator Instructions)

Well, there are no questions. I'd just like to thank everyone for joining today's call.

We do understand many of our shareholders provide a private, prefer a private discussion with management, and so please just reach out.

We'll be happy to get such a call scheduled with you and hold such a discussion. As always, we appreciate your time and interest in Cumberland, and we look forward to providing another update in the coming months.

Thank you, sir. Ladies and gentlemen, that concludes today's call. If you would like to listen to a replay of the discussion, please visit the investor relations section on Cumberland's website. I would like to thank you for your participation. You may now disconnect.