Cumberland Pharmaceuticals(CPIX) - 2024 Q2 - Quarterly Results

Executive Summary & Q2 2024 Highlights Q2 2024 Performance Overview Cumberland Pharmaceuticals demonstrated significantly improved financial results and strong overall corporate performance in Q2 2024 Q2 2024 Key Financial Highlights | Metric | Amount (in millions USD) | | :----------------- | :-------------- | | Net Revenue (Q2 2024) | 9.9 | | QoQ Growth | 16% | | Adjusted Earnings (Q2 2024) | 0.2 | | Improvement from Prior Quarter | 0.8 | | Total Assets | 78.5 | | Total Liabilities | 52.5 | | Shareholders' Equity | 26.3 | - CEO A.J. Kazimi expressed strong optimism for the company's future, anticipating significant revenue growth and positive operating cash flow for 2024[2] Recent Business Developments Kristalose® Updates Kristalose® gained Medicaid reimbursement in Wisconsin and was recommended as a first-line treatment for opioid-induced constipation by the AGA - Kristalose® has been added to the Wisconsin Medicaid formulary, following previous coverage in New York and Texas[2] - The American Gastroenterological Association (AGA) guidelines list Kristalose® as a first-line treatment option for opioid-induced constipation[3] Vibativ® Anthrax Study A new study supports Vibativ® (telavancin) as an effective novel treatment for anthrax infections, showing potent bactericidal activity and improved survival rates - Telavancin effectively killed all tested anthrax strains in laboratory settings[4] - In preclinical studies, all animals treated with telavancin survived, and it was superior to levofloxacin in clearing anthrax from the blood and organs[4][5] - Researchers believe telavancin could be an effective new treatment for anthrax, especially as resistance to existing antibiotics grows[5] Product Pipeline: Ifetroban Cumberland is advancing the clinical development of its ifetroban candidate, with three ongoing Phase II programs and pending FDA orphan drug designations Clinical Study Progress Ifetroban has demonstrated a strong safety and tolerability profile in nearly 1,400 subjects, with three Phase II trials currently underway - Ifetroban has been administered to nearly 1,400 subjects and proven to be safe and well-tolerated[6] - Three Phase II clinical programs are ongoing for indications including: 1) Systemic Sclerosis, 2) Duchenne Muscular Dystrophy-associated cardiomyopathy, and 3) Idiopathic Pulmonary Fibrosis (the newest program, now enrolling)[6] FDA Designations The company has applied for FDA Orphan Drug and Rare Pediatric Disease designations for its Duchenne Muscular Dystrophy candidate - An Orphan Drug Designation application has been submitted for the Duchenne Muscular Dystrophy product candidate, which can provide post-approval market exclusivity[7] - A Rare Pediatric Disease Designation application has been submitted, which could result in a Priority Review Voucher upon FDA approval[7] - Feedback from the FDA on both applications is expected this year[7] Future Development Path The company plans to complete ongoing studies, analyze data, and determine the optimal registration path for ifetroban - The plan is to complete company-sponsored studies, analyze final data, announce top-line results, and determine the best registration development path for ifetroban[8] - The company believes ifetroban has the potential to benefit many patients with orphan diseases that have unmet medical needs[8] Sancuso® Manufacturing & Supply Cumberland successfully transitioned Sancuso® manufacturing and supply following its 2023 acquisition, with the first branded products now shipping - The transition of Sancuso® from Kyowa Kirin to Cumberland, including the NDA transfer, was successfully completed in 2023[9] - A new Sancuso® manufacturing facility has received FDA approval, with the first Cumberland-branded products shipping this summer[9] Federal NOPAIN Act & Caldolor® Cumberland anticipates its non-opioid analgesic Caldolor® will receive separate Medicare reimbursement under the NOPAIN Act starting in 2025 - Cumberland expects Caldolor® to receive special Medicare reimbursement under the NOPAIN Act[10] - The NOPAIN Act requires Medicare to provide separate reimbursement for non-opioid pain management products used in hospital outpatient departments or ambulatory surgical centers from January 1, 2025, to January 1, 2028[10][11] - Cumberland submitted clinical information to CMS in September 2023 to support separate reimbursement for Caldolor® and plans to resubmit in September 2024, awaiting the 2025 Medicare OPPS final rule[12] Financial Performance Second Quarter 2024 Financial Highlights The company reported net revenues of $9.9 million in Q2 2024, a 16% sequential increase, with adjusted earnings showing significant improvement Second Quarter and Year-to-Date 2024 Financial Data | Metric | Q2 2024 | YTD 2024 | | :----------------- | :-------------- | :--------------- | | Net Revenue | $9.9 Million | $18.3 Million | | Operating Expenses | $10.9 Million | $21.2 Million | | Net Loss | $1.1 Million | $3.0 Million | | Net Loss per Share | $0.08 | $0.21 | | Adjusted Earnings | $0.2 Million | N/A | | Adjusted Earnings Improvement | +$0.8 Million | N/A | Q2 2024 Net Revenue by Product | Product | Net Revenue (in millions USD) | | :--------- | :---------------- | | Kristalose® | 4.1 | | Vibativ® | 2.5 | | Sancuso® | 2.2 | | Caldolor® | 0.8 | Condensed Consolidated Balance Sheets As of June 30, 2024, total assets stood at $78.5 million, with total liabilities at $52.5 million and shareholders' equity at $26.3 million Condensed Consolidated Balance Sheets (Selected Items) | Metric | June 30, 2024 | Dec 31, 2023 | | :----------------------- | :------------ | :------------- | | Assets | | | | Cash and cash equivalents | $17,336,446 | $18,321,624 | | Accounts receivable, net | $11,619,763 | $9,758,176 | | Inventories, net | $4,302,159 | $4,609,362 | | Total assets | $78,519,175 | $81,776,075 | | Liabilities & Equity | | | | Accounts payable | $12,508,026 | $14,037,629 | | Revolving line of credit | $16,091,592 | $12,784,144 | | Total liabilities | $52,486,991 | $52,516,206 | | Total stockholders' equity | $26,348,990 | $29,603,441 | Condensed Consolidated Statements of Operations The company recorded a net loss of $1.1 million for Q2 2024, compared to a net income of $0.86 million in the prior-year period Condensed Consolidated Statements of Operations (Selected Items) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :------------------------------------- | :------------- | :------------- | :----------- | :----------- | | Net revenues | $9,848,849 | $10,888,877 | $18,346,550 | $20,113,515 | | Selling and marketing expenses | $4,248,401 | $4,672,075 | $8,402,989 | $8,949,393 | | Research and development expenses | $1,059,187 | $1,145,038 | $2,217,440 | $2,644,708 | | Income (loss) from operations | $(1,026,688) | $22,859 | $(2,895,938) | $(1,508,819) | | Net income (loss) | $(1,102,637) | $862,154 | $(3,005,109) | $1,034,440 | | Net income (loss) attributable to common shareholders | $(1,085,612) | $872,200 | $(3,031,875) | $1,064,384 | | Basic earnings (loss) per share | $(0.08) | $0.06 | $(0.21) | $0.07 | | Diluted earnings (loss) per share | $(0.08) | $0.06 | $(0.21) | $0.07 | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities was $3.0 million for the first six months of 2024, with a period-end cash balance of $17.3 million Condensed Consolidated Statements of Cash Flows (Selected Items) | Metric | H1 2024 | H1 2023 | | :------------------------------------- | :----------- | :----------- | | Net cash from operating activities | $(2,992,307) | $3,817,152 | | Net cash from investing activities | $(104,990) | $(271,261) | | Net cash from financing activities | $2,112,119 | $(5,054,775) | | Net decrease in cash and cash equivalents | $(985,178) | $(1,508,884) | | Cash and cash equivalents at end of period | $17,336,446 | $18,249,086 | Adjusted Earnings Reconciliation (Non-GAAP) Q2 2024 adjusted earnings were $0.18 million, a decrease from $2.3 million in the prior-year period, excluding non-core items Adjusted Earnings (Loss) and Adjusted Diluted EPS (Loss) | Metric | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :------------------------------------- | :------------- | :------------- | :----------- | :----------- | | Net income (loss) attributable to common shareholders | $(1,085,612) | $872,200 | $(3,031,875) | $1,064,384 | | Adjusted earnings (loss) | $184,715 | $2,303,458 | $(455,096) | $3,964,676 | | Adjusted diluted EPS | $0.01 | $0.16 | $(0.03) | $0.27 | Company Overview About Cumberland Pharmaceuticals Cumberland Pharmaceuticals is a biopharmaceutical company focused on developing and commercializing products for hospital acute care, gastroenterology, and oncology - The company focuses on providing unique products that improve patient care and commercializes products for the hospital acute care, gastroenterology, and oncology markets[16] - The company has a portfolio of FDA-approved brands and is advancing its ifetroban product candidate through Phase II clinical programs[16][17] FDA-Approved Product Portfolio The company's portfolio consists of six FDA-approved branded products targeting specific medical needs in various therapeutic areas Acetadote® (acetylcysteine) Injection Acetadote® is an intravenous drug used to prevent or reduce liver injury resulting from acetaminophen poisoning - Indication: To prevent or lessen liver damage resulting from acetaminophen poisoning[18] Caldolor® (ibuprofen) Injection Caldolor® is the first FDA-approved intravenous ibuprofen for pain management and fever reduction in adult and pediatric patients - Indications: Management of mild to moderate pain, an adjunct to opioid analgesics for moderate to severe pain, and fever reduction[20] - Feature: The first FDA-approved intravenous therapy for fever reduction[20] Kristalose® (lactulose) Oral Solution Kristalose® is a unique, patented crystalline form of lactulose for treating acute and chronic constipation - Indication: Treatment of acute and chronic constipation[21] - Feature: A unique, patented crystalline form of lactulose with no limitations on duration of therapy or patient age[21] Sancuso® (granisetron) Transdermal System Sancuso® is the only FDA-approved skin patch for preventing chemotherapy-induced nausea and vomiting (CINV) - Indication: Prevention of chemotherapy-induced nausea and vomiting (CINV)[22] - Feature: The only FDA-approved skin patch for CINV prevention, providing up to five days of protection[22] Vaprisol® (conivaptan) Injection Vaprisol® is an intravenous vasopressin receptor antagonist for treating hyponatremia in critical care settings - Indication: Treatment of hyponatremia in critical care settings[24] - Mechanism: A vasopressin receptor antagonist that raises serum sodium levels and promotes free water excretion[24] Vibativ® (telavancin) Injection Vibativ® is a patented, injectable anti-infective for treating certain serious bacterial infections, including those caused by resistant Gram-positive pathogens - Indications: Treatment of serious bacterial infections, including hospital-acquired and ventilator-associated bacterial pneumonia, and complicated skin and skin structure infections[25] - Feature: Specifically designed to kill resistant Gram-positive bacterial pathogens[25] About Cumberland Emerging Technologies CET is a joint initiative to commercialize biomedical technologies from regional research centers by providing expertise and infrastructure - CET is a joint initiative of Cumberland Pharmaceuticals, Vanderbilt University, LaunchTN, and WinHealth[26] - Its mission is to advance biomedical technologies and products from research centers to the market[26] - It provides expertise in intellectual property, regulatory affairs, manufacturing, and marketing, as well as lab space for early-stage life science companies[26] Additional Information Earnings Report Call Details The company will host a conference call on August 6, 2024, to provide a corporate update and discuss financial results - The conference call will be held on August 6, 2024, at 4:30 p.m. ET[15] - The call is intended to provide a company update and discuss financial performance[15] - Participants must register, and a replay of the call will be available for one year[15] Forward-Looking Statements This release contains forward-looking statements subject to various risks and uncertainties, and the company undertakes no obligation to update them - Forward-looking statements reflect the company's current views and expectations about future events but are not guarantees that these events will occur[27] - Risk factors include macroeconomic conditions, competition, manufacturing capabilities, regulatory compliance, natural disasters, and public health epidemics[27] - Readers are cautioned not to place undue reliance on these statements, and the company has no obligation to publicly revise them to reflect subsequent events[27] Non-GAAP Financial Measures Explanation The company provides non-GAAP financial measures as a supplement to GAAP results to help assess core operational performance - Non-GAAP financial measures are considered a supplement to GAAP financial information for evaluating the company's operational performance[35][36] - Adjusted earnings (loss) is defined as net income (loss) adjusted for income taxes, depreciation, amortization, stock-based compensation, and interest[37] - Adjusted diluted EPS (loss) is defined as adjusted earnings (loss) divided by the diluted weighted-average common shares outstanding[37] Investor & Media Contacts This section provides contact information for Cumberland Pharmaceuticals' investor relations and media representatives - Investor Contact: Shayla Simpson, (615) 255-0068[29] - Media Contact: Molly Aggas (Dalton Agency), (704) 641-6641[29]