Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX) Q4 2024 Earnings Conference Call March 4, 2025 4:30 PM ET Company Participants Molly Aggas – Account Supervisor-Dalton Agency A.J. Kazimi – Chief Executive Officer Todd Anthony – Vice President-Organizational Development John Hamm – Chief Financial Officer Conference Call Participants Operator Good afternoon, and welcome to Cumberland Pharmaceuticals Fourth Quarter 2024 Financial Report and Company Update. This call is being recorded at company’s request and wil ...

Financial Data and Key Metrics Changes - For Q4 2024, net revenue from continuing operations was $10.4 million, representing an 11.6% increase over the prior year period [43][44] - Full year 2024 net revenue totaled $38 million, with a net loss of approximately $6.5 million for the year [45][46] - Total operating expenses for Q4 were $12.3 million, down from $15.5 million in the prior year [45] Business Line Data and Key Metrics Changes - Net revenue by product for Q4 2024 included $4.4 million for Kristalose, $2.4 million for Sancuso, $2.1 million for Vibativ, and $1.4 million for Caldolor [44] - Full year product revenue totaled $15.3 million for Kristalose, $9 million for Sancuso, $6.9 million for Vibativ, and $5 million for Caldolor [45] Market Data and Key Metrics Changes - Vibativ received approval in China, expanding its international business, and shipments began to Saudi Arabia [14] - Kristalose saw growth due to new Medicaid coverage in several states, including Virginia, Louisiana, and Maine [23] Company Strategy and Development Direction - The company aims to acquire and commercialize a portfolio of branded pharmaceuticals while expanding its sales organization and development pipeline [11][12] - Cumberland Emerging Technologies (CET) is a joint initiative with Vanderbilt University to enhance the development pipeline [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress of clinical studies for ifetroban and its potential to benefit many patients [54] - The company expects double-digit revenue growth and positive cash flow from operations in the upcoming year [57] Other Important Information - The company continues to hold $53 million in tax net operating loss carryforwards, primarily from prior stock option exercises [52] - Cumberland has an active acquisition initiative to seek additional FDA-approved brands [56] Q&A Session Summary - No questions were raised during the Q&A session, and management encouraged private discussions with shareholders if desired [60]

Financial Performance - Cumberland Pharmaceuticals reported fourth quarter 2024 net revenues of $10.4 million, an 11.6% increase compared to the prior year period[2]. - Full year 2024 net revenues totaled $38 million, with contributions of $15.3 million from Kristalose, $9 million from Sancuso, $7.2 million from Vibativ, and $5 million from Caldolor[11]. - Cumberland's net loss for the fourth quarter of 2024 was approximately $1.9 million, with a total net loss of approximately $6.4 million for the year[11]. - Net revenues for Q4 2024 were $10,435,569, an increase of 11.6% compared to $9,353,066 in Q4 2023[33]. - The company reported a net loss of $6,443,715 for the year 2024, compared to a net loss of $6,330,766 in 2023, indicating a slight increase in losses[35]. - Basic loss per share for Q4 2024 was $(0.14), compared to $(0.44) in Q4 2023[33]. Assets and Liabilities - The company ended 2024 with total assets of $76 million, including $18 million in cash and cash equivalents, and total liabilities of $53 million[3][13]. - Total assets decreased to $75,583,410 in 2024 from $81,776,075 in 2023, representing a decline of 7.6%[31]. - Total current liabilities increased to $31,621,729 in 2024 from $27,982,249 in 2023, reflecting a rise of 13.8%[31]. - The company reported a total shareholders' equity of $22,853,494 in 2024, down from $29,603,441 in 2023, a decline of 22.9%[31]. Operating Expenses - Cumberland's total operating expenses for 2024 were $44 million, with an adjusted loss of $1.0 million for the year[11][12]. - The company incurred total costs and expenses of $44,300,354 in 2024, down from $49,107,168 in 2023, a reduction of 9.4%[33]. - Operating loss for Q4 2024 was $1,842,039, an improvement from the operating loss of $6,179,239 in Q4 2023[33]. - Research and development expenses for the year 2024 were $4,816,206, down from $5,834,229 in 2023, a decrease of 17.4%[33]. Regulatory and Clinical Developments - The FDA granted Orphan Drug and Rare Pediatric Disease designations for ifetroban, aimed at treating cardiomyopathy in Duchenne muscular dystrophy[4]. - Cumberland announced positive top-line results from its Phase II study of ifetroban, marking a breakthrough for patients with cardiac complications related to Duchenne muscular dystrophy[5]. - Vibativ received regulatory approval in China, expanding Cumberland's international business presence[5]. - The company is advancing multiple Phase II clinical trials for ifetroban, addressing unmet medical needs in significant market segments[10]. Supplemental Financial Measures - The Company utilizes adjusted supplemental financial measures to evaluate its operating performance, which are considered "non-GAAP" financial measures[38]. - Adjusted Earnings are defined as net loss adjusted for income taxes, depreciation and amortization expense, share-based compensation, interest income, and interest expense[41]. - Adjusted Diluted Earnings Per Share is calculated by dividing the adjusted loss by diluted weighted-average common shares outstanding[41]. - The supplemental financial measures provide useful information about the Company's underlying performance across reporting periods[40]. - Certain items excluded from the supplemental measures include depreciation, amortization, share-based compensation expense, and income taxes[40]. - The Company believes these measures reflect long-term strategic activities and core business performance[40]. - Management views these supplemental measures as important for evaluating the Company's operating results[40]. - Management encourages investors to review the Company's consolidated financial statements and publicly filed reports in their entirety for a complete understanding of financial performance[39]. - The financial information for the year ended December 31, 2023, has been adjusted to align with the current year presentation[41].

Core Insights - Cumberland Pharmaceuticals Inc. reported a net revenue of $10.4 million for Q4 2024, marking an 11.6% increase year-over-year, with total annual revenues reaching $38 million [1][9] - The company ended 2024 with total assets of $76 million, including $18 million in cash and $53 million in liabilities [2][12] - CEO A.J. Kazimi highlighted 2024 as a transformative year with expanded product labeling, key FDA designations, and new study publications [3] Financial Performance - For the full year 2024, net revenues were $38 million, with significant contributions from Kristalose® ($15.3 million), Sancuso® ($9 million), Vibativ® ($7.2 million), and Caldolor® ($5 million) [9] - Total operating expenses for 2024 were $44 million, resulting in a net loss of approximately $6.4 million for the year [9][11] - The adjusted loss for the year was $1 million, excluding certain costs related to product acquisitions [11] Product Developments - The FDA granted Orphan Drug and Rare Pediatric Disease designations for ifetroban, aimed at treating cardiomyopathy in Duchenne muscular dystrophy [3] - New research published demonstrated Caldolor's safety and healthcare resource advantages over ketorolac in both adult and pediatric populations [4] - A simplified dosing regimen for Acetadote® was approved by the FDA, enhancing the efficiency of administration [6] Clinical Trials and Studies - Cumberland made significant progress in Phase II clinical trials for ifetroban, closing studies in Duchenne muscular dystrophy and nearing completion in systemic sclerosis and pulmonary fibrosis [8] - The company provided 3.9 million doses of FDA-approved products to patients in 2024 and reported no product recalls [7] Market Expansion - Vibativ® received approval in China, expanding Cumberland's international business, alongside shipments to Saudi Arabia [10]

Company Announcement - Cumberland Pharmaceuticals Inc. will release its annual 2024 financial results and provide a company update on March 4, 2025, after market close [1] - A conference call is scheduled for March 4 at 4:30 p.m. Eastern Time to discuss the results, with registration required for participation [1][2] Company Overview - Cumberland Pharmaceuticals is a specialty pharmaceutical company focused on unique products that enhance patient care, particularly in hospital acute care, gastroenterology, and oncology market segments [3] - The company has a portfolio of FDA-approved brands, including Acetadote®, Caldolor®, Kristalose®, Sancuso®, Vaprisol®, and Vibativ® [5] - Cumberland is also conducting Phase II clinical programs for its ifetroban product candidate, targeting conditions such as Systemic Sclerosis, cardiomyopathy associated with Duchenne Muscular Dystrophy, and Idiopathic Pulmonary Fibrosis [3]

Core Viewpoint - Cumberland Pharmaceuticals and SciClone Pharmaceuticals announced the NMPA approval of Vibativ® (telavancin) in China, enabling its launch in a significant market for treating pneumonia and serious skin infections [1][4]. Company Overview - Cumberland Pharmaceuticals is focused on developing and commercializing unique products to improve patient care, with a portfolio that includes six FDA-approved brands [15][16]. - SciClone Pharmaceuticals is a global biopharmaceutical company dedicated to innovative therapies for cancer and severe infections, emphasizing a strategic transformation towards differentiated product offerings [12][13]. Product Details - Vibativ is an FDA-approved injectable antibiotic effective against hospital-acquired and ventilator-associated pneumonia caused by multidrug-resistant Gram-positive bacteria, including MRSA [2][6]. - The drug is administered once daily and does not require therapeutic drug monitoring, which reduces healthcare professionals' exposure to patients [2][5]. - Vibativ has demonstrated consistent efficacy against difficult-to-treat bacteria over the past decade, maintaining its potency against multidrug-resistant strains [3][9]. Clinical Evidence - Studies involving over 24,000 clinical isolates show Vibativ's effectiveness against challenging Gram-positive infections, with higher cure rates compared to vancomycin [3][9]. - Recent research published in Antimicrobial Agents and Chemotherapy indicates that Vibativ is safe for use in children aged 2 to 17, with reduced exposure compared to adults [10]. Market Strategy - SciClone has secured exclusive rights to register, promote, and distribute Vibativ in China, leveraging its strong distribution network to maximize patient access [1][4]. - The companies plan to launch Vibativ in China later in 2025, aiming to address the needs of patients with serious infections [4].

Core Insights - Cumberland Pharmaceuticals Inc. released topline results from its Phase 2 FIGHT DMD trial evaluating ifetroban for Duchenne muscular dystrophy (DMD) heart disease, which is a leading cause of death in DMD patients [1][2] - If approved, ifetroban would be the first therapy specifically indicated for DMD-related heart disease, having received both Orphan Drug Designation and Rare Pediatric Disease Designation from the FDA [3] Study Details - The trial enrolled 41 patients who received either low-dose ifetroban (150 mg per day), high-dose ifetroban (300 mg per day), or placebo [2] - The primary endpoint was an improvement in the heart's left ventricular ejection fractions (LVEF), a key indicator of heart function [2] Key Findings - High-dose ifetroban treatment resulted in an overall 3.3% improvement in LVEF, with the high-dose group showing a 1.8% increase compared to a 1.5% decline in the placebo group [5] - Compared to propensity-matched natural history controls, the high-dose treatment provided a significant 5.4% overall improvement in LVEF, while control patients experienced a 3.6% decline [5] - Both doses of ifetroban were well-tolerated, with no serious drug-related events reported [5] Market Reaction - Following the trial results, CPIX stock increased by 23.01%, reaching $2.62 [3]

Core Insights - Cumberland Pharmaceuticals Inc. announced positive top-line results from its Phase 2 FIGHT DMD trial, evaluating ifetroban for Duchenne muscular dystrophy (DMD) heart disease, marking a breakthrough as the first successful Phase 2 study targeting cardiac complications in DMD patients [1][4] Group 1: Study Overview - The FIGHT DMD trial is a 12-month, double-blind, randomized, placebo-controlled study involving 41 DMD patients, assessing the efficacy of ifetroban at low (150 mg/day) and high doses (300 mg/day) compared to a placebo [4] - The primary endpoint of the study was the improvement in left ventricular ejection fraction (LVEF) [4] Group 2: Key Findings - High dose ifetroban treatment resulted in an overall 3.3% improvement in LVEF, with the high dose group showing a 1.8% increase, while the placebo group experienced a 1.5% decline [6] - Compared to propensity matched natural history controls, the high dose treatment provided a significant 5.4% overall improvement in LVEF, as control patients experienced a 3.6% decline [6] - Both doses of ifetroban were well-tolerated, with no serious drug-related events reported [6] Group 3: Medical Significance - Ifetroban is a novel oral medication that blocks the thromboxane receptor, which is crucial in inflammation and fibrosis, and has received Orphan Drug Designation and Rare Pediatric Disease Designation from the FDA [7] - If approved, ifetroban would be the first therapy specifically indicated for DMD-related heart disease, addressing a critical unmet medical need [7] Group 4: Future Steps - Cumberland Pharmaceuticals plans to conduct further data analysis and prepare a full study report for an end of Phase 2 meeting with the FDA to discuss the next steps for product development and commercialization [8]

Financial Data and Key Metrics Changes - For Q3 2024, the company reported net revenue of $9.1 million, with year-to-date net revenues totaling $27 million [57][59] - The gross margin improved to 85% during the quarter [59] - The net loss for the quarter was $1.5 million, with an adjusted loss of $0.26 million or $0.02 per share [60] Business Line Data and Key Metrics Changes - Revenue breakdown for Q3 included $3.6 million from Kristalose, $2.6 million from Sancuso, $1.3 million from Caldolor, and $1 million from Vibativ [57] - Year-to-date product revenues were $10.9 million for Kristalose, $6.6 million for Sancuso, $5.1 million for Vibativ, and $3.6 million for Caldolor [59] Market Data and Key Metrics Changes - Kristalose performed best in states with Medicaid coverage, with new states adding it to their plans [14][30] - Vibativ faced challenges due to product returns and shipment delays caused by Hurricane Helene, impacting sales [11][58] Company Strategy and Development Direction - The company is focused on expanding its product portfolio through acquisitions of select FDA-approved brands [69] - New product development activities include treatments for delirium and a technology for locating internal bleeding sites [39][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, citing steady performance in Kristalose and positive impacts from sales initiatives for Sancuso [67] - The company is encouraged by the progress of clinical studies for ifetroban and believes it has the potential to benefit many patients [68] Other Important Information - The company continues to hold over $52 million in tax net operating loss carryforwards [66] - A new smaller package for Vibativ was launched to cater to smaller hospitals and infusion centers [28] Q&A Session Summary - There were no questions from participants during the call, and management encouraged private discussions for those interested [70][71]

Product Portfolio and Development - Cumberland Pharmaceuticals Inc. has six FDA-approved products in the U.S. market, including Acetadote and Caldolor, targeting hospital acute care, gastroenterology, and oncology [84]. - The company is conducting Phase II clinical programs for its ifetroban product candidate, focusing on systemic sclerosis, cardiomyopathy associated with Duchenne Muscular Dystrophy, and idiopathic pulmonary fibrosis, with nearly 1,400 subjects dosed [108]. - Cumberland aims to expand its portfolio by acquiring under-promoted FDA-approved drugs and late-stage development products, exemplified by the acquisitions of Vibativ and Sancuso [90]. - The company is pursuing international partnerships to register and commercialize its products, including Vibativ in Saudi Arabia and Jordan through Tabuk Pharmaceutical [114]. - Cumberland's Caldolor product is expected to be eligible for special Medicare reimbursement under the NOPAIN Act, which applies to non-opioid pain management products from January 1, 2025 [102]. - The company has received Orphan Drug Designation and Rare Pediatric Disease Designation for its Duchenne Muscular Dystrophy product candidate, which may provide benefits during the FDA review process [110]. - The MENDING Trial enrolled 97 critically ill patients, demonstrating that the new treatment was well-tolerated and associated with a reduction in days with delirium [120][121]. - CET has entered into a Development Agreement with Octapharma AG for a new product to locate sites of internal bleeding, with development funding provided by Octapharma [123]. - The new technology for identifying GI bleeding sites represents a paradigm shift, allowing for pinpointing even if bleeding has temporarily ceased [126]. - The company continues to build its portfolio through the development of new candidates and acquisition of established brands, focusing on innovative and differentiated products [130]. Financial Performance - Net revenues for Q3 2024 were $9.1 million, a decrease of $1.0 million (9.9%) compared to $10.1 million in Q3 2023 [134]. - Vibativ revenue dropped to $1.0 million in Q3 2024 from $2.8 million in Q3 2023, a decline of $1.8 million (64.3%) due to lower sales volume [138]. - Sancuso revenue increased to $2.6 million in Q3 2024, up $0.7 million (36.3%) from $1.9 million in Q3 2023, driven by higher sales volume [138]. - Net revenues for the nine months ended September 30, 2024, were $27.4 million, a decrease of $2.8 million compared to $30.2 million for the same period in 2023 [149]. - Sancuso revenue increased to $6.6 million for the nine months ended September 30, 2024, compared to $5.7 million for the same period last year, primarily due to reduced sales deductions for product returns [153]. - Vibativ revenue for the nine months ended September 30, 2024, was $5.1 million, a decrease from $6.8 million in the prior year period, due to lower sales volume [153]. - Total costs and expenses for the nine months ended September 30, 2024, were $32.0 million, a decrease of $1.6 million compared to $33.6 million in the same period in 2023 [149]. - Operating loss for the nine months ended September 30, 2024, was $4.6 million, compared to a loss of $3.4 million for the same period in 2023, reflecting an increase of $1.2 million [149]. Cost Management and Expenses - Cost of products sold for Q3 2024 was $1.3 million, down $0.5 million (25.0%) from $1.8 million in Q3 2023, with a decrease in cost as a percentage of net revenues from 17.5% to 14.6% [140]. - Research and development costs decreased to $1.3 million in Q3 2024 from $1.9 million in Q3 2023, a reduction of $0.6 million (31.6%) due to variable costs associated with ongoing clinical initiatives [142]. - General and administrative expenses increased to $2.7 million in Q3 2024, up $0.4 million (17.4%) from $2.3 million in Q3 2023, attributed to higher salaries and contract labor costs [143]. - Research and development costs decreased to $3.5 million for the first nine months of 2024, down from $4.6 million in the same period last year, attributed to lower FDA fees and consulting expenses [157]. - General and administrative expenses increased to $7.8 million for the nine months ended September 30, 2024, compared to $7.2 million in the prior year, driven by higher salaries and contract labor costs [158]. Cash Flow and Liquidity - Cash and cash equivalents as of September 30, 2024, were $17.5 million, down from $18.3 million as of December 31, 2023 [166]. - Working capital decreased to $4.1 million as of September 30, 2024, compared to $7.7 million as of December 31, 2023 [166]. - The current ratio as of September 30, 2024, was 1.1, down from 1.3 as of December 31, 2023 [166]. - For the nine months ended September 30, 2024, cash used in operating activities totaled $2.5 million, primarily due to a net loss of $4.5 million and a $1.6 million increase in accounts receivable [168]. - Cash provided by financing activities amounted to $1.6 million, mainly from $3.3 million in borrowings on the line of credit, offset by $1.3 million for royalty payments and $0.5 million for share repurchases [169]. - The company entered into a new Revolving Credit Loan Agreement with Pinnacle Bank, providing up to $25 million, with an initial line of credit of $20 million and a three-year term expiring on October 1, 2026 [170]. - As of September 30, 2024, the applicable interest rate under the Loan Agreement was 8.000%, with $16.1 million in borrowings outstanding under the revolving credit facility [175]. - The company experienced a net decrease in cash and cash equivalents of $0.9 million for the nine months ended September 30, 2024, primarily due to cash used in operating activities [167]. - A $0.9 million decrease in non-cash contingent consideration and a $0.4 million decrease in other long-term liabilities contributed to the cash used in operating activities [168]. Risk Management - The company did not engage in any off-balance sheet arrangements during the nine months ended September 30, 2024 and 2023 [172]. - Interest rate risk related to cash and cash equivalents is considered not material, with no significant downside risk expected from changes in market interest rates [174]. - Foreign currency exchange gains and losses were immaterial for the nine months ended September 30, 2024 and 2023, with minimal exposure to foreign currency fluctuations [176]. - The company amended the Loan Agreement on May 6, 2024, providing an alternative to the financial covenant based on a borrowing base certificate [171].