News Release
<< Back
Cumberland Pharmaceuticals Reports First Quarter 2010 Earnings
NASHVILLE, Tenn., May 13, 2010 /PRNewswire via COMTEX News Network/ -- Cumberland Pharmaceuticals Inc. (Nasdaq: CPIX), a specialty pharmaceutical company focused on the hospital acute care and gastroenterology markets, today announced first quarter 2010 financial results.
"We remain focused on gaining widespread hospital formulary approval for Caldolor and our efforts are producing meaningful results," said A.J. Kazimi, Chief Executive Officer of Cumberland Pharmaceuticals. "We will continue to extend our products into new markets and seek expanded labeling where new indications warrant. Our balance sheet remains strong following our initial public offering in 2009, and we are actively pursuing opportunities to selectively build our product portfolio."
Net Revenue: For the three months ended March 31, 2010, net revenue was $10.1 million, an increase of $0.7 million over the same period in 2009. Net revenue by product was $7.7 million for Acetadote(R) (acetylcysteine) Injection and $2.3 million for Kristalose(R) (lactulose) for Oral Solution. Net revenue attributable to Caldolor(R) (ibuprofen) Injection, which was launched in September 2009, was $19,000.
Operating Expenses: Total operating expenses for the three months ended March 31, 2010 were $9.3 million, compared with $7.3 million for the same period in 2009. This increase was due primarily to sales and marketing expense associated with the expansion of the Company's hospital sales force in connection with the launch of Caldolor.
Net Income: Net income for the three months ended March 31, 2010, was $0.3 million, or $0.02 per diluted share, compared to $1.2 million, or $0.08 per diluted share, for the same period in 2009. The decrease in earnings per share was due to the increase in costs associated with the Company's hospital sales force expansion and was also impacted by an increase in shares outstanding as a result of the Company's initial public offering. Weighted-average diluted shares outstanding at March 31, 2010 was 21.4 million, up from 16.1 million at March 31, 2009.
EBITDA: Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) for the three months ended March 31, 2010 was $1.0 million compared with $2.3 million for the same period in the prior year. Excluding $0.1 million and $0.2 million in non-cash stock compensation expense for the three months ended March 31, 2010 and 2009, respectively, adjusted EBITDA was $1.2 million and $2.5 million, respectively.
Balance Sheet: As of March 31, 2010, Cumberland had $73.8 million in cash and cash equivalents, compared to $78.7 million as of December 31, 2009. Total assets as of March 31, 2010 were $98.7 million compared with $103.7 million at December 31, 2009. The decreases in cash and total assets were primarily related to scheduled debt repayments. A large majority of proceeds from the Company's initial public offering remain available for planned expansion of the Company's product portfolio and further product development support.
QUARTER HIGHLIGHTS
Supplemental New Drug Application for Acetadote
In March 2010, Cumberland submitted a supplemental new drug application (sNDA) to the U.S. Food and Drug Administration (FDA) for the use of Acetadote in patients with non-acetaminophen induced acute liver failure. The sNDA includes data from a clinical trial led by investigators at the University of Texas Southwestern Medical Center indicating that acute liver failure patients treated with Acetadote have a significantly improved chance of survival without a transplant. This data also indicates that patients can survive a significant number of days longer without transplant, providing those who require transplant increased time for a donor organ to become available.
RECENT DEVELOPMENTS
FDA Accepts Acetadote sNDA for Review
In May 2010, the FDA officially accepted the Company's aforementioned sNDA for Acetadote and granted a priority review. In addition to expanded labeling for Acetadote, the Company has requested additional exclusivity for the product. If approved, Cumberland expects to begin marketing Acetadote for the new indication in 2011.
International Markets
License Agreement for Caldolor in Canada
In April 2010, Cumberland entered into an exclusive agreement with Alveda Pharmaceuticals Inc., a Toronto-based specialty pharmaceutical company, for the commercialization of Caldolor in Canada. Under the agreement, Alveda will seek Canadian regulatory approval for Caldolor and, upon approval, will handle ongoing regulatory requirements as well as product marketing, distribution and sales throughout Canada. Cumberland will maintain responsibility for product formulation, development and manufacturing. In exchange for the license to the product, Cumberland will receive royalties on future sales of Caldolor in addition to upfront and milestone payments as well as a transfer price.
Caldolor Launched for Compassionate Use in Australia
In December 2009, Cumberland entered into an exclusive agreement with Phebra Pty Ltd., an Australian-based specialty pharmaceutical company, for distribution of Caldolor in Australia and New Zealand. In April 2010, Phebra made the product available in Australia for compassionate use. The Therapeutics Goods Administration (TGA), which regulates drugs and medical devices in Australia, operates compassionate use programs that allow patients with critical clinical need to access products not yet approved through their medical practitioner. Phebra is also planning to submit an application to the TGA for regulatory approval of Caldolor.
Acetadote Approved for Marketing in Australia
In April 2010, the Therapeutic Goods Administration approved Acetadote for marketing in Australia. Cumberland previously granted an exclusive license to Phebra Pty Ltd. to commercialize Acetadote in Australia. Phebra is now preparing for the Australian launch of the product, which it expects to commence this year.
Under their agreement, Phebra is responsible for ongoing regulatory requirements, marketing, distribution and sales of Acetadote in Australia, New Zealand and the Asia Pacific while Cumberland maintains responsibility for product formulation, development and manufacturing. Cumberland receives milestone payments, a transfer price and royalties on future sales in exchange for the product license.
Share Repurchase Program
In May 2010, Cumberland's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $10 million of its outstanding common shares. Purchases will be made from time-to-time, at the Company's discretion, on the open market over a period of several months. Any share repurchases will be funded by excess cash flow. The Board believes the repurchase program demonstrates its confidence in Cumberland's long-term potential and that the Company's shares are currently undervalued, and as such that the shares represent an attractive investment alternative.
SUPPLEMENTAL FINANCIAL INFORMATION
The following table presents a reconciliation of Cumberland's net income to EBITDA and adjusted 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 and adjusted EBITDA should not be considered in isolation from or as a substitute for net income.
Three Months Ended March
31,
2010 2009
---- ----
Net income $313,498 $1,205,851
Income tax expense 211,737 831,059
Depreciation &
amortization 231,332 196,059
Interest expense, net 285,273 80,115
------- ------
EBITDA 1,041,840 2,313,084
Adjustments:
Non-cash stock
compensation 135,899 157,062
Adjusted EBITDA $1,177,739 $2,470,146
========== ==========
CONFERENCE CALL AND WEBCAST
A conference call and live webcast will be held on Thursday, May 13, 2010, at 5:00 p.m. Eastern Time to discuss the Company's first quarter 2010 financial results. To participate on the call, please dial 877-303-1298 (for U.S. callers) or 253-237-1032 (for international callers). A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 800-642-1687 (for U.S. callers) or 706-645-9291 (for international callers). The Conference ID for the rebroadcast is 72042780. The live webcast and rebroadcast can be accessed via Cumberland Pharmaceuticals' website at http://investor.shareholder.com/cpix/events.cfm.
ABOUT CUMBERLAND PHARMACEUTICALS
Cumberland Pharmaceuticals Inc. is a Tennessee-based specialty pharmaceutical company focused on the acquisition, development and commercialization of branded prescription products. The Company's primary target markets include hospital acute care and gastroenterology. Cumberland's product portfolio includes Acetadote(R) (acetylcysteine) Injection for the treatment of acetaminophen poisoning, Caldolor(R) (ibuprofen) Injection, the first injectable treatment for pain and fever available in the United States, and Kristalose(R) (lactulose) for Oral Solution, a prescription laxative. Cumberland is dedicated to providing innovative products which improve quality of care for patients. For more information on Cumberland Pharmaceuticals, please visit the Company's website at www.cumberlandpharma.com.
ABOUT CALDOLOR
Caldolor is indicated for the management of mild to moderate pain and management of moderate to severe pain as an adjunct to opioid analgesics, as well as the reduction of fever in adults. It is the first FDA-approved intravenous therapy for fever. Caldolor is contraindicated in patients with known hypersensitivity to ibuprofen or other NSAIDs, patients with asthma, urticaria, or allergic type reactions after taking aspirin or other NSAIDs. Caldolor is contraindicated for use during the peri-operative period in the setting of coronary artery bypass graft (CABG) surgery. Caldolor should be used with caution in patients with prior history of ulcer disease or GI bleeding, in patients with fluid retention or heart failure, in the elderly, those with renal impairment, heart failure, liver impairment, and those taking diuretics or ACE inhibitors. Blood pressure should be monitored during treatment with Caldolor. For full prescribing information, including boxed warning, visit www.caldolor.com.
ABOUT ACETADOTE
Acetadote is used in the emergency department to prevent or lessen potential liver damage resulting from an overdose of acetaminophen, a common ingredient in many over-the-counter painkillers. It is the only approved injectable product in the United States for the treatment of acetaminophen overdose, the leading cause of poisonings presenting in emergency departments in the country(1). Acetadote is contraindicated in patients with hypersensitivity or previous anaphylactoid reactions to acetylcysteine or any components of the preparation. Serious anaphylactoid reactions, including death in a patient with asthma, have been reported in patients administered acetylcysteine intravenously. Acetadote should be used with caution in patients with asthma, or where there is a history of bronchospasm. The total volume administered should be adjusted for patients less than 40 kg and for those requiring fluid restriction. To avoid fluid overload, the volume of diluent should be reduced as needed. If volume is not adjusted, fluid overload can occur, potentially resulting in hyponatremia, seizure, and death. For full prescribing information, visit www.acetadote.net.
(1) National Poison Data System, American Association of Poison Control Centers
ABOUT KRISTALOSE
Kristalose is indicated for the treatment of acute and chronic constipation. It is a unique, proprietary, crystalline form of lactulose, with no restrictions on length of therapy or patient age. Initial dosing may produce flatulence and intestinal cramps, which are usually transient. Excessive dosage can lead to diarrhea with potential complications such as loss of fluids, hypokalemia and hypernatremia. Nausea and vomiting have been reported. Use with caution in diabetics. Kristalose is contraindicated in patients who require a low-galactose diet. Elderly, debilitated patients who receive lactulose for more than six months should have serum electrolytes (potassium, chloride, carbon dioxide) measured periodically. For full prescribing information, visit www.kristalose.com.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements, which are subject to certain risks and reflect Cumberland's current views on future events based on what it believes are reasonable assumptions. No assurance can be given that these events will occur. As with any business, all phases of Cumberland's operations are subject to factors outside its control, and any one or combination of these factors could materially affect Cumberland's results of operations. These factors include market conditions, competition, an inability of manufacturers to produce Cumberland's products on a timely basis or a failure of manufacturers to comply with regulations applicable to pharmaceutical manufacturers, maintaining an effective sales and marketing infrastructure and other factors set forth under the headings "Risk factors" and "Management's discussion and analysis of financial condition and results of operations" in Cumberland's Form 10-K filed with the SEC on March 19, 2010. There can be no assurance that results anticipated by the Company will be realized or that they will have the expected effects. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to publicly revise these statements to reflect events after the date hereof.
CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
December
March 31, 31,
2010 2009
---- ----
ASSETS
Current assets:
Cash and cash equivalents $73,752,814 $78,701,682
Accounts receivable, net of allowances 3,814,947 6,176,585
Inventories 7,406,402 4,822,873
Other current assets 3,369,809 3,472,455
--------- ---------
Total current assets 88,343,972 93,173,595
Property and equipment, net 948,580 918,412
Intangible assets, net 7,818,394 7,956,009
Other assets 1,578,723 1,676,304
--------- ---------
Total assets $98,689,669 $103,724,320
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt $6,000,000 $9,061,973
Current portion of other long-term
obligations 88,739 144,828
Accounts payable 6,813,974 5,632,796
Other accrued liabilities 2,556,585 3,784,777
--------- ---------
Total current liabilities 15,459,298 18,624,374
Revolving line of credit 1,825,951 1,825,951
Long-term debt, excluding current
portion 7,438,027 8,938,027
Other long-term obligations, excluding
current portion 181,455 184,632
------- -------
Total liabilities 24,904,731 29,572,984
---------- ----------
Commitments and contingencies
Redeemable common stock 100,000 1,930,000
Equity:
Shareholders' equity:
Common stock -no par value;
100,000,000 shares authorized;
20,413,605(1) and 20,180,486(1) shares
issued and outstanding as of March 31,
2010 and December 31, 2009,
respectively 68,861,850 67,711,746
Retained earnings 4,865,704 4,542,126
--------- ---------
Total shareholders' equity 73,727,554 72,253,872
---------- ----------
Noncontrolling interests (42,616) (32,536)
Total equity 73,684,938 72,221,336
---------- ----------
Total liabilities and equity $98,689,669 $103,724,320
(1) Number of shares issued and outstanding represent total shares of
common stock regardless of classification on the consolidated
balance sheet. The number of shares of redeemable common stock at
March 31, 2010 and December 31, 2009 was 9,497 and 142,016,
respectively.
CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended March
31,
2010 2009
---- ----
Net revenues $10,130,652 $9,404,599
Costs and expenses:
Cost of products sold 859,288 733,218
Selling and marketing 5,607,512 4,140,187
Research and development 773,868 770,117
General and
administrative 1,881,203 1,444,863
Amortization of product license
right 171,726 171,726
Other 26,547 27,463
------ ------
Total costs and expenses 9,320,144 7,287,574
--------- ---------
Operating income 810,508 2,117,025
Interest income 60,679 17,596
Interest expense (345,952) (97,711)
-------- -------
Income before income tax expense 525,235 2,036,910
Income tax expense (211,737) (831,059)
-------- --------
Net income 313,498 1,205,851
Net loss attributable to
noncontrolling interests 10,080 12,239
------ ------
Net income attributable to common
shareholders $323,578 $1,218,090
======== ==========
Earnings per share attributable to
common shareholders
- Basic $0.02 $0.12
- Diluted $0.02 $0.08
Weighted-average shares outstanding
- Basic 20,233,267 10,321,175
- Diluted 21,395,419 16,127,240
CUMBERLAND PHARMACEUTICALS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March
31,
2010 2009
---- ----
Cash flows from operating activities:
Net income $313,498 $1,205,851
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization
expense 231,332 196,059
Nonemployee equity compensation 3,972 37,760
Stock-based compensation -
employee stock options 130,915 143,902
Excess tax benefit derived from
exercise of stock options (206,418) (2,842,825)
Noncash interest expense 67,380 14,256
Net changes in assets and liabilities
affecting operating activities:
Accounts receivable 2,361,638 (267,892)
Inventory (2,583,529) 415,948
Other current assets and other
assets 132,847 955,169
Accounts payable and other accrued
liabilities 127,104 (1,187,558)
Other long-term obligations (59,266) (405,801)
------- --------
Net cash provided by (used in)
operating activities 519,473 (1,735,131)
------- ----------
Cash flows from investing activities:
Additions to property and equipment (64,085) (15,601)
Additions to patents - (16,345)
--- -------
Net cash used in investment
activities (64,085) (31,946)
------- -------
Cash flows from financing activities:
Costs of initial public offering - (114,428)
Principal payments on note payable (4,561,973) -
Costs of financing for long-term
debt and credit facility (27,500) (15,475)
Proceeds from exercise of stock
options 807,496 4,296
Excess tax benefit derived from
exercise of stock options 206,418 2,842,825
Payments made in connection with
repurchase of common shares (1,828,697) (2,707,419)
---------- ----------
Net cash (used in) provided by
financing activities (5,404,256) 9,799
---------- -----
Net decrease in cash and cash
equivalents (4,948,868) (1,757,278)
Cash and cash equivalents at
beginning of period 78,701,682 11,829,551
---------- ----------
Cash and cash equivalents at end of
period $73,752,814 $10,072,273
=========== ===========
Supplemental disclosure of cash flow
information:
Cash paid during the year for:
Interest $276,288 $33,517
Income taxes 12,376 80,000
Non-cash investing and financing activities:
Increase in accounts payable and
accrued expenses of initial public
offering - 5,311
SOURCE Cumberland Pharmaceuticals Inc.
Copyright (C) 2010 PR Newswire. All rights reserved