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Cumberland Pharmaceuticals Reports Second Quarter 2009 Financial Results

NASHVILLE, Tenn., Aug. 27 /PRNewswire-FirstCall/ -- Cumberland Pharmaceuticals Inc. (Nasdaq: CPIX), a specialty pharmaceutical company focused on the hospital acute care and gastroenterology markets, today announced second quarter 2009 financial results.

"Our second quarter and the weeks since have encompassed two of the most significant events in the Company's history--receipt of Food and Drug Administration (FDA) approval for Caldolor and the completion of our initial public offering," said A.J. Kazimi, Chief Executive Officer at Cumberland. "We have also completed the expansion of our hospital sales force to facilitate a successful product launch of Caldolor, our injectable ibuprofen product. We believe Caldolor will offer an important alternative for physicians in treating patients with fever or pain where oral treatment is not ideal or even a viable option."

Net Revenue: For the three months ended June 30, 2009, net revenue was $9.8 million, up 18% from the corresponding period in 2008. This growth was primarily attributable to an increase in volume for Acetadote, the Company's injectable treatment for acetaminophen overdose. Net revenue for the six months ended June 30, 2009, was $19.2 million, compared with $16.7 million for the same period in 2008.

Operating Expenses: Total operating expenses for the three months ended June 30, 2009, were $9.2 million, compared to $6.5 million for the same period in 2008. The increase in expenses was due primarily to milestone payments associated with FDA approval of Caldolor, as well as increased marketing expenses for that product. For the six-month period ended June 30, 2009, total operating expenses were approximately $16.5 million, compared with $13.0 million for the corresponding period in 2008. This increase was primarily a result of the Caldolor milestone obligations, costs incurred in connection with the expansion of the hospital sales force and increased marketing and advertising costs.

Net Income: Net income for the three months ended June 30, 2009, was $0.3 million, or $0.02 per diluted share, compared to $1.1 million, or $0.07 per diluted share, for the same period in 2008. Net income for the six months ended June 30, 2009, was $1.5 million, or $0.09 per diluted share, compared to $2.5 million, or $0.15 per diluted share, for the corresponding period in 2008. The decrease in both periods was due primarily to milestone obligations triggered by FDA approval of Caldolor in the second quarter of 2009, as well as the aforementioned sales force expansion.

Cash and Cash Equivalents: At June 30, 2009, Cumberland had $12.5 million in cash and cash equivalents, compared to $10.1 million at March 31, 2009, representing an increase of $2.4 million. At June 30, 2009, the Company had net accounts receivable and inventories of approximately $3.3 million and $1.1 million, respectively. Included in current assets is an income tax receivable of approximately $1.8 million that was a result of a tax benefit associated with the exercise of stock options during the first quarter of 2009. Total working capital was approximately $12.0 million and the current ratio was 2.5x.

Recent Events

Caldolor Approval and Launch Preparation: In June 2009, Cumberland received FDA approval for Caldolor, the first injectable product approved in the United States for the treatment of pain and fever. Cumberland recently completed an expansion that nearly tripled the size of its hospital sales force in preparation for the product's launch, increasing the size of this group from 27 to 77 experienced hospital representatives and managers.

"We expect Caldolor to be used to treat pain either as a stand-alone agent or as a multi-modal treatment in conjunction with opioids. Caldolor is also approved to treat fever in the acute care setting, where existing alternatives to oral treatment often include the use of cold blankets and ice packs," says Kazimi. "We believe Caldolor has an excellent safety profile, supported by a long history of ibuprofen use as well as our clinical trial database that shows no serious adverse events associated with the product and no significant safety difference compared to placebo."

Initial Public Offering: In early August 2009, Cumberland completed an initial public offering of 5,000,000 shares of common stock, raising $85.0 million in gross proceeds. Net proceeds to the Company are estimated to be approximately $75.2 million after deducting underwriting discounts and commissions as well as offering expenses, and before exercise of any over-allotment option. Cumberland expects to use these proceeds primarily for the pending launch of Caldolor and for potential acquisitions.

Conference Call and Webcast

A conference call and live webcast will be held on Thursday, August 27, 2009, at 10:00 a.m. Eastern Time to discuss the Company's second quarter 2009 financial results. To participate on the call, please dial 877-604-9672 (for U.S. callers) or 719-325-4909 (for international callers). A rebroadcast of the teleconference will be available for one week and can be accessed by dialing 888-203-1112 (for U.S. callers) or 719-457-0820 (for international callers). The passcode for the rebroadcast is 7834064. The live webcast and rebroadcast can be accessed via Cumberland Pharmaceuticals' website at

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 markets Acetadote(R) for the treatment of acetaminophen poisoning and Kristalose(R), a prescription laxative. The Company also recently received FDA approval for Caldolor(R), the first injectable treatment for pain and fever available in the United States, and is preparing for the commercial launch of that product. Cumberland is dedicated to providing innovative products which improve quality of care for patients.

For more information on Cumberland Pharmaceuticals, please visit

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, visit

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

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

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements regarding estimated results of operations in future periods. These forward-looking statements are subject to the finalization of Cumberland's quarterly financial and accounting procedures and reflect Cumberland's current views with respect to future events, based on what it believes are reasonable assumptions. No assurance can be given, however, that these events will occur. As with any business, all phases of Cumberland's operations are subject to influences outside its control. Any one, or a combination, of these factors could materially affect the results of the Cumberland's operations. These factors include among other things, market conditions, the commercialization of Caldolor, Cumberland's dependence on Acetadote and Kristalose to generate almost all of its revenues, intense competition from existing and new products, which could diminish the commercial potential of Cumberland's products, an inability of manufacturers to produce Cumberland's products on a timely basis or a failure of manufacturers to comply with stringent regulations applicable to pharmaceutical drug manufacturers, maintaining and building an effective sales and marketing infrastructure, Cumberland's ability to identify and acquire rights to products, government regulation, the possibility that Cumberland's marketing exclusivity and patent rights may provide only limited protection from competition, and other factors discussed in our Registration Statement declared effective by the SEC on August 10, 2009. There can be no assurance that the results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequences to or effects on the Company or its business and operations. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

(1) National Poison Data System, American Association of Poison Control Centers

                            CUMBERLAND PHARMACEUTICALS INC.

                                           December 31,            June 30,
                                              2008                   2009
                                              ----                   ----

    Current assets:
      Cash and cash equivalents           $11,829,551            $12,531,110
      Accounts receivable, net of
       allowances                           3,129,347              3,254,371
      Inventories                           1,762,776              1,108,376
      Prepaid and other current
       assets                                 481,312                709,511
      Income taxes receivable                       -              1,800,632
      Deferred tax assets                     507,212                507,212
                                             -------                -------

        Total current assets               17,710,198             19,911,212

    Property and equipment, net               432,413                505,174
    Intangible assets, net                  8,528,732              8,226,047
    Deferred tax assets                     1,000,031              1,000,031
    Other assets                            3,447,813              3,705,275
                                            ---------              ---------

        Total assets                      $31,119,187            $33,347,739


    Current liabilities:
      Current portion of long-term
       debt                                $1,250,000             $1,666,667
      Current portion of other
       long-term obligations                  457,915              1,263,491
      Accounts payable                      3,257,164              2,420,175
      Other accrued liabilities             2,640,855              2,586,396
                                           ---------              ---------

        Total current liabilities           7,605,934              7,936,729

    Revolving line of credit                1,825,951              1,825,951
    Long-term debt, excluding
     current portion                        3,750,000              2,916,666
    Other long-term obligations,
     excluding current portion                382,487                159,165
                                              -------                -------

        Total liabilities                  13,564,372             12,838,511
                                           ----------             ----------

    Commitments and contingencies

    Redeemable common stock                         -                630,000

    Shareholders' equity:
      Cumberland Pharmaceuticals Inc.
       shareholders' equity:
        Convertible preferred stock -
         no par value; 3,000,000 shares
         authorized; 812,749 shares
         issued and outstanding             2,604,070              2,604,070
        Common stock - no par value;
         100,000,000 shares authorized;
         9,903,047 and 10,475,693(1) shares
         issued and outstanding
         as of December 31, 2008 and
         June 30, 2009, respectively       13,500,034             14,331,181
        Retained earnings                   1,450,711              2,964,672
                                            ---------              ---------
          Total shareholders' equity       17,554,815             19,899,923
                                           ----------             ----------

    Noncontrolling interests                        -                (20,695)
                                                  ---                -------
        Total equity                       17,554,815             19,879,228
                                           ----------             ----------

        Total liabilities and equity      $31,119,187            $33,347,739

    (1) Number of shares issued and outstanding represents total shares
        of common stock regardless of classification on the consolidated
        balance sheet. The number of shares of redeemable common stock at
        June 30, 2009 was 42,000.

                           CUMBERLAND PHARMACEUTICALS INC.

                            Three months ended          Six months ended
                                 June 30,                   June 30,
                           --------------------        ---------------------
                            2008            2009         2008         2009
                            ----            ----         ----         ----

    Net revenues        $8,357,532      $9,820,613  $16,661,359  $19,225,212

    Costs and expenses:
      Cost of products
       sold                737,230         777,076    1,492,721    1,510,294
      Selling and
       marketing         3,644,796       4,383,802    7,008,802    8,523,989
      Research and
       development         918,460       2,630,725    2,028,402    3,400,842
      General and
       administrative    1,021,639       1,236,435    2,104,733    2,681,298
      Amortization of
       product license
       right               171,726         171,726      343,452      343,452
      Other                 25,193          26,733       51,222       54,196
                            ------          ------       ------       ------
    Total costs and
     expenses            6,519,044       9,226,497   13,029,332   16,514,071
                         ---------       ---------   ----------   ----------

    Operating income     1,838,488         594,116    3,632,027    2,711,141

    Interest income         50,647          10,160      133,019       27,756
    Interest expense       (10,377)        (84,224)    (123,981)    (181,935)
                           -------         -------     --------    ---------

    Net income before
     income taxes        1,878,758         520,052    3,641,065    2,556,962

    Income tax
     expense              (820,335)       (232,637)  (1,187,392)  (1,063,696)
                          --------        --------  -----------   ----------

    Net income           1,058,423         287,415    2,453,673    1,493,266

    Net loss at
     attributable to
     interests                   -           8,456            -       20,695
                               ---           -----          ---       ------

    Net income
     attributable to
     shareholders       $1,058,423        $295,871   $2,453,673   $1,513,961
                        ==========        ========   ==========   ==========

    Earnings per
     attributable to
     shareholders -
     basic                   $0.10           $0.03        $0.24        $0.15
    Earnings per
     attributable to
     shareholders -
     diluted                 $0.07           $0.02        $0.15        $0.09

                         CUMBERLAND PHARMACEUTICALS INC.

                                                     Six Months Ended June 30,
                                                         2008         2009
                                                         ----         ----

     Cash flows from operating activities:
       Net income                                     $2,453,673   $1,493,266
       Adjustments to reconcile net income to net
        cash flows from operating activities:
         Gain on early extinguishment of other
          long-term obligations                          (38,577)           -
         Depreciation and amortization expense           392,896      398,341
         Nonemployee stock granted for services
          received                                        27,500      182,091
         Nonemployee stock option grant expense                -      826,290
         Stock-based compensation - employee stock
          options                                        121,725      313,064
         Excess tax benefit derived from exercise of
          stock options                                 (156,758)  (2,842,825)
         Noncash interest expense                         63,113       29,376
         Net changes in assets and liabilities
          affecting operating activities:
           Accounts receivable                          (627,785)    (125,024)
           Inventory                                       1,110      654,400
           Prepaid, other current assets and other
            assets                                       625,462      743,951
           Accounts payable and other accrued
            liabilities                                   (8,332)    (986,592)
           Other long-term obligations                    47,856      582,254
                                                          ------      -------
         Net cash provided by operating activities     2,901,883    1,268,592
                                                       ---------    ---------

     Cash flows from investing activities:
       Additions to property and equipment               (54,259)     (85,863)
       Additions to patents                              (41,791)     (34,551)
                                                         -------      -------
         Net cash used in investment activities          (96,050)    (120,414)
                                                         -------     --------

     Cash flows from financing activities:
       Costs of initial public offering                 (322,664)    (154,179)
       Principal payments on note payable               (916,668)    (416,667)
       Net borrowings on line of credit                  500,000            -
       Payment of other long-term obligations         (2,760,000)           -
       Costs of financing for long-term debt and
        credit facility                                        -      (15,475)
       Proceeds from exercise of stock options            39,098        4,296
       Excess tax benefit derived from exercise of
        stock options                                    156,758    2,842,825
       Payments made in connection with repurchase
        of common shares                                       -   (2,707,419)
                                                             ---  -----------
         Net cash used in financing activities        (3,303,476)    (446,619)
                                                     -----------     --------

         Net (decrease) increase in cash and cash
          equivalents                                   (497,643)     701,559

     Cash and cash equivalents at beginning of
      period                                          10,814,518   11,829,551
                                                      ----------   ----------

     Cash and cash equivalents at end of period      $10,316,875  $12,531,110
                                                     ===========  ===========

SOURCE Cumberland Pharmaceuticals Inc.
Copyright©2009 PR Newswire.
All rights reserved

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