NASHVILLE, Tenn., Nov. 3, 2011 /PRNewswire/ -- Cumberland Pharmaceuticals Inc. (NASDAQ: CPIX), a specialty pharmaceutical company focused on hospital acute care and gastroenterology markets, today announced third quarter 2011 financial results.
Net Revenue: For the three months ended September 30, 2011, net revenue was $13.1 million, up from $12.2 million in the prior year period. The growth in net revenue was driven by an increase in sales of Acetadote.
For the nine months ended September 30, 2011, net revenue was $38.1 million, up 15.3% compared with $33.1 million for the nine months ended September 30, 2010.
Operating Expenses: Total operating expenses for the three months ended September 30, 2011, were $10.0 million compared with $9.7 million for the prior year period. Increases in cost of products sold, research and development expenses and general and administrative expenses were partially offset by a decrease in selling and marketing expenses compared to the prior year. For the nine months ended September 30, 2011, total operating expenses were $30.0 million compared with $28.8 million for the nine months ended September 30, 2010.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization(EBITDA) for the three months ended September 30, 2011, were $3.4 million, up 25% from $2.7 million for the prior year period. EBITDA for the nine months ended September 30, 2011, grew to $8.9 million, up 79.8% from $5.0 million for the prior year period.
Net Income: Net income attributable to common shareholders for the three months ended September 30, 2011, was $1.8 million, or $0.09 per diluted share, up 83% from $1.0 million, or $0.05 per diluted share, for the prior year period.
For the nine months ended September 30, 2011, net income attributable to common shareholders was $4.7 million, or $0.23 per diluted share, up 193.1% from $1.6 million, or $0.08 per diluted share, for the same period in 2010.
Balance Sheet: As of September 30, 2011, cash and cash equivalents grew to $71.1 million, compared to $69.8 million at June 30, 2011. Total assets grew from $94.6 million on June 30, 2011 to $96.1 million as of September 30, 2011. Cumberland‘s total debt as of September 30, 2011, declined to $4.6 million from $5.8 million at June 30, 2011.
“Our financial performance in the third quarter of 2011 was strong, with our net income increasing 83% over the prior year period,” said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. “We achieved many milestones this quarter including reaching an agreement to acquire the trademark and approved FDA registration for Kristalose, the appointment of Rick S. Greene as Chief Financial Officer, and the signing of new international product agreements while maintaining strong sales of Acetadote and progressing our clinical trial programs. Our goal at Cumberland continues to be maintaining a financial discipline while delivering solid financial results and laying the ground work for future growth opportunities.”
Based on its third quarter performance, Cumberland is reaffirming its full year 2011 revenue guidance of $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 has 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 and was recently granted in Australia in October of 2011. The Company has also 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 this potential new indication. The Company has identified and is currently analyzing additional patient data to support the application.
Caldolor®
In June 2009, the FDA approved Caldolor, the Company’s intravenous formulation of ibuprofen, for marketing in the United States. 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 third quarter of 2011, Cumberland also continued to progress 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 early 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 the treatment of critically ill hospitalized patients suffering from hepatorenal syndrome, or 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 Investigational New Drug Application, or 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 manufactured clinical supplies and filed patent applications to protect intellectual property related to the new indication. The Company has established study sites at institutions around the country and patient screening is now underway. Cumberland believes Hepatoren is an excellent strategic fit given the Company’s established presence in the hospital acute care market.
International Markets
The application for regulatory approval of Caldolor in Canada has been submitted by Cumberland‘s partner Alveda Pharma. Review of the application for approval of Caldolor in Australia submitted by our partner Phebra Pty Ltd is under review by the Australian regulatory authorities. We are also currently working to identify appropriate arrangements for the registration and commercialization of our products in other markets.
Kristalose®
Cumberland has reached an agreement to acquire the remaining rights associated with the Kristalose brand, including the trademark and the approved FDA registration for the product. Cumberland will provide a royalty on product sales in exchange for these assets.
Development Programs
Cumberland Emerging Technologies, or CET, entered into a new collaboration agreement with Washington University in St. Louis to co-develop promising biopharmaceutical technologies. Washington University is a national leader in medical research and ranks among the top U.S. institutions in funding by the National Institutes of Health. This collaboration represents the fourth major university partnership for CET, which has similar arrangements with Vanderbilt University, the University of Tennessee and the University of Mississippi.
Company Update
Effective October 2011, Cumberland named Rick S. Greene as Chief Financial Officer. He had previously been serving as the interim Vice President of Finance and Accounting since April 2011. Mr. Greene has over 20 years of experience in financial management and reporting. Prior to joining Cumberland, Mr. Greene supported the accounting activities associated with the Company’s Initial Public Offering and the ongoing preparation of quarterly financial information following Cumberland‘s stock exchange listing.
