Cumberland Pharmaceuticals(CPIX) - 2018 Q4 - Annual Report

Product Portfolio - The company markets eight FDA approved products in the United States, including Acetadote® for acetaminophen poisoning and Caldolor® for pain and fever[11]. - Acetadote has been a standard of care for treating acetaminophen poisoning since its introduction in 2004, with significant market share maintained through an EDTA-free formulation[19][23]. - Caldolor was the first injectable product approved in the U.S. for both pain and fever, with FDA approval received in 2009[26]. - Kristalose, a prescription laxative, is the only product available in pre-measured powder packets, with 77% of patients preferring it over syrup forms[32]. - Omeclamox-Pak is a branded prescription product for treating H. pylori infections and related duodenal ulcers, combining omeprazole, clarithromycin, and amoxicillin[36]. - Vaprisol, acquired in early 2014, is indicated for raising serum sodium levels in hospitalized patients with hyponatremia, and is the only intravenously administered branded treatment for this condition[41][42]. - Ethyol, acquired in May 2016, is indicated to reduce xerostomia in head and neck cancer patients and renal toxicity in ovarian cancer patients, with Cumberland responsible for all marketing and distribution in the U.S.[44]. - Totect is indicated for the treatment of extravasation associated with anthracycline chemotherapy, with its patent expiring in March 2020[189]. - Vibativ was acquired on November 12, 2018, and is approved for treating certain gram-positive infections[191]. Product Development and Pipeline - The product pipeline includes five Phase II candidates, such as Hepatoren® for hepatorenal syndrome and Boxaban® for aspirin-exacerbated respiratory disease[12]. - The company is actively pursuing opportunities to expand its products into additional patient populations through clinical trials and new indications[15]. - The company initiated clinical development of Hepatoren for treating hepatorenal syndrome, completing a Phase II study with 64 patients showing it was well tolerated[54][55]. - Boxaban, an oral formulation of ifetroban, is being evaluated for Aspirin-Exacerbated Respiratory Disease, with initial Phase II results indicating it was well tolerated[56][57]. - In 2018, the company completed a Phase I study for a new cholesterol-reducing agent, which showed a favorable safety profile[105]. Business Strategy - The company aims to maximize the potential of existing brands while expanding its portfolio through acquisitions and late-stage development candidates[15]. - Cumberland's growth strategy includes maximizing existing brands, acquiring complementary products, and progressing clinical pipelines through partnerships and collaborations[69][70][71]. - The acquisition of Vibativ has resulted in several new international partners and market opportunities[74]. - The company aims to build a portfolio of complementary, niche products through acquisitions and late-stage product development, focusing on under-promoted FDA-approved drugs[108]. Marketing and Distribution - The company has established a dedicated sales force for Kristalose and has entered into co-promotion agreements to expand its market reach[34]. - A co-promotion agreement with Piramal Critical Care has expanded the reach of Caldolor and Vaprisol to additional hospitals across the U.S.[109]. - The company has entered into co-promotion arrangements for Kristalose with 2R Investments, LLC and Foxland Pharmaceuticals, enhancing distribution and promotion efforts[115]. - Cardinal Health is responsible for the U.S. distribution logistics of the company's products, including warehousing and shipping[126]. Financial Position - The company maintains a strong financial position with favorable gross margins and a robust balance sheet, utilizing excess cash flow for an ongoing share repurchase program[75]. - In 2018, total revenue by customer for those representing 10% or more of consolidated gross revenues included Customer 1 at 26%, Customer 2 at 24%, Customer 3 at 25%, and Customer 4 at 11%[87]. International Expansion - Caldolor was approved for use in India in 2018, and the company is actively supporting existing international partners while seeking new companies for additional territories[92]. - The company has established an international network of partners, including Phebra Pty Ltd for Acetadote in Australia and New Zealand, and R-Pharm JSC for Vibativ in Russia[89]. Regulatory and Compliance - The company has a commitment to post-marketing activities for its products, including expanded labeling and safety data submissions to the FDA[20]. - The FDA requires post-market safety surveillance reporting, which may lead to withdrawal of approval after marketing begins[204]. - Clinical trials must adhere to Good Clinical Practice (GCP) requirements, and the FDA can halt trials if they do not comply[202]. - The FDA's review process for priority reviews aims to complete evaluations in six months for drugs that significantly improve safety or efficacy[202]. Intellectual Property - The company has filed for trademark registrations for various names and logos to protect its intellectual property[135]. - The 356 Acetadote Patent is scheduled to expire in May 2026, with ongoing litigation to defend its validity against multiple challengers[138]. - The company holds an exclusive, worldwide license to clinical data for intravenous ibuprofen from Vanderbilt University, with royalty obligations related to Caldolor[158]. - The 452 Caldolor Patent was issued on May 27, 2014, and is scheduled to expire in September 2029[158]. - The company obtained four additional patents for Caldolor during Q3 2015, with expiration dates set for March 2032[160]. - The 606 Vaprisol Patent, acquired in February 2014, is scheduled to expire in December 2019[165]. - The company has an exclusive license to promote, sell, and distribute Ethyol in the U.S., with several patents associated with it[166]. - The company has no issued patents for Omeclamox-Pak and Kristalose products, with pending applications for other products[169]. Philanthropy - The Cumberland Pharma Foundation was established in December 2017 with an initial grant of 50,000 shares to support its philanthropic activities[129].