Cumberland Pharmaceuticals Inc (CPIX) 2014 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Cumberland Pharmaceuticals first-quarter 2014 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this call is being recorded.

I would now like introduce your host for today's conference, Elizabeth Davis, corporate relations. Please go ahead.

Hello, everyone. Before we begin, I'd like to point out that the Company issued a press release containing financial results for the first quarter ended March 31, 2014. The release, including the financial tables, is available on the Company's website at www.cumberlandpharma.com.

Before we begin, allow me to read the following Safe Harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because these statements reflect the Company's current views, expectations, and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Investors should note that many factors as more fully described under the caption risk factors in our forms 10-K, Form 10-Q, and Form 8-K filings with the SEC could affect the Company's future financial results and could differ materially from those expressed in forward-looking statements contained in the Company's annual report on Form 10-K or other SEC filings or public statements.

The forward-looking statements are qualified by these risk factors. The Company assumes no obligation to publicly update any forward-looking statements whether as a result of new information, future developments, or otherwise. Also please note that this conference call is being webcast through our website and will be available there.

I will now turn the call over to our for Chief Executive Officer, A.J. Kazimi, to begin our discussion of the Company's quarterly performance.

Good afternoon, everyone, and thank you for joining us as we review our first-quarter 2014 results. With me today on today's call are Cumberland's Chief Commercial Officer, Marty Cearnal; and our Chief Financial Officer, Rick Greene. We'll start by reviewing our recent developments and then provide an update on our products followed by a discussion of her financial performance. We'll then review our strategy and key objectives. So let's begin.

Our first quarter of 2014 was very successful, as we effectively executed on many important goals which positively impact our future growth. Furthermore, I'm very pleased to report that, through the sales of our five FDA-approved products, we were able to return Cumberland to profitability this quarter.

You may recall in our last earnings report we announced both the Omeclamox-Pak launch and the Vaprisol acquisition. Today, I am pleased to report that the Omeclamox-Pak is off to a strong start as we are encouraged by the product's performance since we began active promotion in January. Omeclamox is being promoted in conjunction with our partner Pernix Therapeutics, who details the product to primary care physicians. Our field sales force covers the gastroenterologists, who are the most prolific prescribers of this product. We worked closely with Pernix to coordinate transition from the commercial responsibilities for Omeclamox. And that planning was time well spent, resulting in a smooth transition and solid prescription growth in the Cumberland territories.

We're also pleased to announce that we have now formally launched our promotional efforts to support Vaprisol, our fifth commercial product. Vaprisol is an injectable hospital product used in the critical care setting, which represents a very complementary addition to our hospital sales force. This patented product was developed and registered by Astellas, who launched it in 2006. Vaprisol is one of two branded prescription products indicated for the treatment of hyponatremia. This condition can be associated with a variety of critical care issues including congestive heart, liver, and kidney failure, cancer, or pneumonia.

Meanwhile, in another major development, we announced last week a $1 million investment into CET by our Chinese partner, Gloria Pharmaceuticals. We established CET, along with Vanderbilt University and the state of Tennessee, to develop a long-term pipeline of innovative new products. We believe Gloria's investment can help accelerate the development of CET's programs. Gloria will have the first opportunity to negotiate a license to CET products for China, while Cumberland will retain access to CET's products for the rest of the world. We're delighted to welcome Gloria as a new partner in the CET initiative.

I'd now like to ask Marty Cearnal to provide an update on her marketed products. Marty?

Thank you, A.J. Let's begin with our newest products. We're excited about the addition of Vaprisol, our newest injectable hospital product. Vaprisol is the first and only intravenously administered vasopressin receptor antagonist. Vaprisol is one of just two branded prescription products indicated for the treatment of hyponatremia that reduces excess water to increase serum sodium concentration and regulate the water sodium balance in hospitalized patients. Vaprisol does not require dilution and has a well-defined daily regimen of 10 mg, 20 mg, or 40 mg, providing convenient administration of the control of IV dosing. Vaprisol was approved by the US Food and Drug Administration in 2005 for you euvolemic hyponatremia and in 2007 for hypervolemic hyponatremia. Launched commercially in 2006, the product was developed and registered by Astellas before being acquired late in February by Cumberland.

As A.J. mentioned, Vaprisol officially launched by Cumberland last week at our national sales meeting. The meeting was a big success in part because Vaprisol is an exciting new product for the hospital sales force to detail; and in turn, they are very enthusiastic about the potential of the product.

We are growing the leading expert in the field to provide the latest information on the product for our hospital sales team. We have made adjustments to their territories to ensure appropriate coverage for the product. We have also made a seamless transition with Astellas and are now selling the product through our distribution channels.

Our second new product, Omeclamox-Pak, is off to a very strong start. Prescriptions in Cumberland's territories were up 28% in the first quarter. And I would note that the field sales force is very energized about the positive acceptance of this product so far.

As you may know, many stomach ulcers are caused by an infection from the bacteria helicobacter pylori, or H. pylori, which colonize in the stomach and the duodenum. When present, this bacterial infection has been proven to be the cause of over 90% of duodenal ulcers. These ulcers commonly cause abdominal pain and may lead to serious bleeding. The US prevalence of H. pylori is approximately 30% to 40% in adults, and its eradication has been shown to reduce the risk of duodenal ulcer recurrence.

Omeclamox-Pak is a branded prescription product that combines three key ingredients: omeprazole, amoxicillin, and clarithromycin for the treatment of H. pylori infection and related ulcer disease. Omeclamox is prescribed over a shortened treatment period of 10 days and has the lowest (inaudible) burden of available combination products to treat H. pylori.

Now on to Caldolor. Pediatric fever results on efficacy and safety of Caldolor were presented at the pediatric anesthesiology conference 2014 in Fort Lauderdale, Florida, in early March. The pediatric study met its primary endpoint demonstrating Caldolor was associated with a statistically significant reduction in temperature within the first two hours of dosing when compared to acetaminophen. Equally important, no safety concerns were observed during the study.

During the study, febrile hospitalized children ranging in age from less than one year to 16 years were administered Caldolor, ibuprofen injection, or oral or rectal acetaminophen as a single- or multiple-dose therapy for up to five days.

The presentation was entitled a multi-center open-label parallel active comparator multi-dose trial to determine the efficacy, safety, and pharmacokinetics of intravenous ibuprofen in pediatric patients. And was provided -- the presentation was provided by Dr. Samia N. Khalil in the Department of Anesthesiology, University of Texas Medical School at Houston.

On to Acetadote. We continue to feature the EVTA-free message at all levels of distribution and promotion. We're maintaining sales promotion coverage at key medical facilities and all poison control centers. As a result, we have continued to maintain majority share of the market between the sales of Acetadote and our authorized generic.

Lastly, we have launched a new marketing strategy for Kristalose and are already seeing its positive impact. Our new strategy has allowed us to better support the product for patients and offers new opportunities to partner with managed-care providers. We are also utilizing a new couponing program with an e-prescribing feature to enhance patient access to Kristalose.

That completes the update on our marketed brands, and I'll turn it over to Rick Greene for the financial review.

Thank you, Marty. For the three months ended March 31, 2014, net revenues were $8.1 million. Net revenues by product were $3.4 million for Kristalose; $2.7 million for Acetadote, including $1.3 million of authorized generics; $1.1 million for Omeclamox; $0.5 million for Caldolor; and $0.3 million for Vaprisol. And Vaprisol was included in our financial results for only one month.

Total upgrade expenses for the first three months of 2014 were $7.7 million, down 14% compared $8.9 million for the prior-year period. We continue to focus on managing our expenses in line with our revenues.

Net income for the three months ended March 31, 2014 was $0.3 million compared to $0.9 million in 2013. But this represents a significant sequential improvement from the net loss of $1.5 million for the fourth quarter of 2013. Diluted earnings per share for the first quarter were $0.02, down from $0.05 in the first quarter of 2013 but up significantly from the loss per share of $0.08 in the fourth quarter of 2013. Cash flow from operations for the three months March 31, 2014 was $1 million compared to $1.7 million in the first quarter of 2013.

As of March 31, 2014, we had approximately $52.6 million in cash and securities, with approximately $39 million in cash and cash equivalents and $13.5 million in marketable securities. Total assets were $91.1 million.

Our financial position remains strong, with over $50 million of cash and investments and no debt. We believe -- we continue to believe our shares represent a valuable investment and continue our buyback program each quarter. During the first quarter, we repurchased approximately 193,000 shares and have now repurchased over 3.5 million shares through this program since its inception.

With that, I will turn the call back over to you, A.J.

Thanks, Rick. We are extremely pleased that we were able to return the Company to profitability in a relatively short time period -- short period of time. Furthermore, we are very optimistic about the opportunity that Vaprisol and Omeclamox offer Cumberland. We feel that both product additions allow us to continue momentum in growth through our commercialization efforts.

We are building a diverse product portfolio while deploying our resources to sustain long-term profitability, and will selectively pursue additional new commercial and late-stage development opportunities.

Meanwhile, we are also focusing our development efforts on accelerating our pipeline candidate with associated clinical programs. We intend to conclude the analysis report and publication for the completed Caldolor study, and will then update the comprehensive safety and efficacy data set for the product and seek expanded labeling for Caldolor. Our lead development candidate, Hepatoren, is progressing through its phase 2 study in patients suffering from life-threatening liver and kidney failure. And our goal is to complete enrollment in that key study this year.

Management remains committed to placing revenues back on a growth trajectory, returning the Company to profitability, and maintaining a strong balance sheet. We believe our stock represents an attractive investment opportunity and will continue to repurchase shares with excess cash, as Rick described. The interests of this organization, management, and our shareholders remain closely aligned. And we will continue to focus our mission of improving patient care through the delivery of high-quality pharmaceutical products.

With that, let's open the call to any questions. Operator, please proceed.

Thank you. Ladies and gentlemen, if you have a question at this time (operator instructions).

And I'm not showing any questions at this time. I would now like to turn the call back to management for any closing remarks.

Okay. Well, management remains available for any questions that may come up afterwards. I just want to thank everyone for joining us on the call today. We do appreciate your time and interest in Cumberland, and we will look forward to providing you another update after the end of the second quarter. Goodbye.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone, have a great day.