NASHVILLE, Tenn., Aug. 4, 2011 /PRNewswire/ -- Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical company focused on hospital acute care and gastroenterology markets, today announced second quarter 2011 financial results.
Net Revenue: For the three months ended June 30, 2011, net revenue was $14.4 million, up 34% from $10.7 million in the prior year period. The growth in revenue was due to an increase in sales volume for Acetadote following the Company’s introduction of the new formulation for that product.
For the six months ended June 30, 2011, net revenue was $25.1 million, up 20% compared with $20.9 million for the six months ended June 30, 2010. This increase was largely attributable to the growth in net revenue during the second quarter of 2011.
Operating Expenses: Total operating expenses for the three months ended June 30, 2011, were $10.8 million compared with $9.7 million for the prior year period. The difference related primarily to increases in cost of products sold during the quarter as well as increases in general and administrative expenses. For the six months ended June 30, 2011, total operating expenses were $20.0 million compared with $19.1 million for the six months ended June 30, 2010.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization(EBITDA) for the three months ended June 30, 2011, were $3.9 million, up from $1.2 million for the prior year period. EBITDA for the six months ended June 30, 2011, grew to $5.6 million, up from $2.3 million for the prior year period. The increase was primarily due to net revenue growth in the second quarter of 2011.
Net Income: Net income attributable to common shareholders for the three months ended June 30, 2011, was $2.2 million, or $0.11 per diluted share, up 658% from $0.3 million, or $0.01 per diluted share, for the prior year period.
For the six months ended June 30, 2011, net income attributable to common shareholders was $2.9 million, or $0.14 per diluted share, compared with $0.6 million, or $0.03 per diluted share, for the same period in 2010.
Balance Sheet: As of June 30, 2011, cash and cash equivalents grew to $69.8 million, compared to $66.0 million at March 31, 2011, due to strong operating cash flow during the quarter. Total assets at June 30, 2011, grew to $94.6 million. Cumberland‘s total debt as of June 30, 2011, was $5.8 million, including a current portion of $4.0 million, compared to $6.5 million in total debt at March 31, 2011. Following the end of the quarter, the Company repaid its term loan in full. Cumberland also increased its revolving line of credit to $10 million, which is expandable to $20 million and incorporated reduced pricing terms.
“We are very pleased with the Company’s performance during the second quarter, having accomplished several key objectives for the year and delivering strong growth in revenue, income and cash flow,” said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. “Our team’s execution of the launch of the new Acetadote formulation, the addition of a key pipeline candidate and growth in our network of international commercial partners are a few highlights from the quarter. From a historical performance perspective, this quarter also trends nicely with our consistent quarter-over-quarter growth in net revenue, EBITDA, operating income and net income.”
Based on its second quarter performance, Cumberland is raising its full year 2011 revenue guidance to $51 - $55 million. This guidance represents the Company’s best estimate of future results, which may be affected by factors described below in “Forward-Looking Statements.”
Company Highlights
Acetadote®
New Formulation
In January 2011, the U.S. Food and Drug Administration (FDA) approved Cumberland‘s supplemental new drug application (sNDA) for a new formulation of Acetadote, which was the result of a phase IV commitment the Company made to the FDA upon receipt of initial marketing approval of the product. The new formulation does not contain Ethylene diamine tetracetic acid or any other stabilization and chelating agents and is free of preservatives. Cumberland launched the next generation product, which replaced the previously marketed formulation, in the first quarter of 2011 and during the second quarter worked to ensure widespread distribution and transition to the next generation product.
In July 2011, Cumberland filed a response with the U.S. Patent and Trademark Office for its patent application to protect proprietary discoveries related to the new Acetadote formulation. This formulation patent was allowed and issued in China in April 2011. The Company also recently filed a second U.S. patent application related to the safety profile of the new formulation.
sNDA for Non-Acetaminophen Induced Acute Liver Failure
In the first quarter of 2010, Cumberland submitted an application to the FDA for use of Acetadote in patients with non-acetaminophen acute liver failure. This sNDA included data from a clinical trial led by investigators at the University of Texas Southwestern Medical Center indicating that early-stage acute liver failure patients treated with Acetadote have a significantly improved chance of survival without a transplant and that these patients can also survive a significant number of days longer without transplant. In December 2010, the FDA issued a Complete Response Letter indicating that it had identified additional items that must be addressed prior to any approval.
Cumberland has been in discussions with the FDA to determine a pathway forward for the potential new indication. The Company recently identified and is currently analyzing additional patient data to support the application, and plans to present the new information to the FDA.
Caldolor®
In June 2009, the FDA approved Caldolor, the Company’s intravenous formulation of ibuprofen, for marketing in the United States through a priority review. In late 2009, Cumberland launched the product in the U.S. and Caldolor is stocked at wholesalers serving hospitals nationwide.
In 2010, the Company focused its sales and marketing efforts primarily on securing formulary approval nationally for Caldolor. Early in the second quarter of 2011, Cumberland implemented a strategic shift to begin focusing on pull-through activities necessary to build volume of use and bring Caldolor to a larger population of patients in facilities stocking the product.
During the second quarter of 2011, Cumberland also progressed four clinical studies to further evaluate Caldolor in patients. Two of these trials are designed to support pediatric use, including a pediatric fever study to evaluate safety, efficacy and pharmacokinetics of Caldolor in hospitalized children as well as a pediatric pain study. Two new registry studies will gather additional data in adults, including a study evaluating Caldolor in treating pain and fever in a wide range of hospitalized patients and another evaluating the product for management of pain in surgical patients.
Hepatoren
In April 2011, Cumberland entered into an agreement to acquire the rights to ifetroban, a new Phase II product candidate. The Company has initiated clinical development under the brand name Hepatoren (ifetroban) Injection and is evaluating the product for treatment of critically ill hospitalized patients suffering from hepatorenal syndrome (HRS), a life-threatening condition involving progressive kidney failure for which there is no U.S. approved pharmaceutical treatment.
Ifetroban was initially developed extensively by a large pharmaceutical company for certain cardiovascular indications. The development program was eventually donated to Vanderbilt University, where researchers identified ifetroban as a potentially valuable compound in treating patients for several other niche indications. Cumberland acquired the rights to the ifetroban program from Vanderbilt through Cumberland Emerging Technologies and intends to develop it for several potential indications, including as an Orphan Drug for HRS for which it will pursue seven years of marketing exclusivity.
The FDA has cleared the Company’s IND for this product candidate and Cumberland has initiated a Phase II dose escalation study to evaluate Hepatoren for the treatment of HRS. The Company has commenced manufacturing and filed patent applications to protect intellectual property related to the new indication. Cumberland believes Hepatoren is an excellent strategic fit given the Company’s established presence in the hospital acute care market.
International Markets
During the second quarter, Cumberland executed agreements with partners for commercialization of Caldolor and Acetadote in Malaysia and Taiwan. In Malaysia, the Company is partnering with Insanbakti and in Taiwan with Harvest & Health Co., Ltd. These agreements are part of a larger initiative to secure distribution of Cumberland‘s products in Asian markets, and are in addition to a recent license agreement with DB Pharm Korea for Caldolor in South Korea.
The application for regulatory approval of Caldolor in Canada was recently submitted by Cumberland‘s Canadian partner, Alveda Pharma. Review of the application for regulatory approval of Caldolor in Australia is underway and Cumberland is working to identify additional arrangements for commercialization of its products in other markets as well.
Supplemental Financial Information
The following table presents a reconciliation of Cumberland‘s net income to EBITDA. The Company defines EBITDA as net income plus interest, income tax, depreciation and amortization, and presents these measures to assist investors in evaluating Cumberland‘s operating performance and comparing the Company’s results with those of other companies. EBITDA should not be considered in isolation from or as a substitute for net income.
SOURCE Cumberland Pharmaceuticals Inc.
