Q4 2024 Cumberland Pharmaceuticals Inc Earnings Call
Speaker Change: [music].
Good afternoon, and welcome to the Cumberland Pharmaceuticals fourth quarter, 2024 financial report and company update.
This call is being recorded at the company's request and will be archived on its web site for one year from today's date.
Mollie: I would now like to turn it over to Molly I guess account supervisor with adult and agency, who handles Cumberland Communications Mollie. Please proceed.
Hello, everyone and thank you for joining us today.
Mollie: This afternoon, Cumberland issued a press release announcing its fourth quarter and annual financial results for the year ending December 31st 2024.
Mollie: The release also provided an operational update including key recent developments.
Mollie: It really was he related financial tables can be found on the website at www Dot Cumberland pharma dotcom.
Mollie: Management will share an overview of the financial results during today's call.
Mollie: He'll also provide an overall company update including a discussion of Cumberland brand pipeline and partners.
J kazimi: Participating in today's call are a J kazimi <unk> Chief Executive Officer.
Todd Anthony: Todd Anthony Vice President organizational development, and Jon Hamm, Chief Financial Officer.
Todd Anthony: Please keep in mind that there are discussions may include some forward looking statements as defined in the private Securities Reform Act.
Todd Anthony: These statements reflect the company's current views and expectations concerning future events and may involve risks as well as uncertainties.
Todd Anthony: There are many factors that could affect future results, including natural disasters economic downturn public health epidemics international conflicts trade restrictions.
Todd Anthony: Others that are beyond the company's control.
Those issues are described under the caption risk factors in Cumberland, its Form 10-K, and any additional updates filed with SEC.
Todd Anthony: Any forward looking statements made during today's call are qualified by those risk factors.
Todd Anthony: Despite the company's best efforts actual results may differ materially from expectations.
Todd Anthony: The information shared on this call should be considered current as of today only.
Todd Anthony: Also please remember that the company isn't responsible for updating any forward looking statements.
Todd Anthony: Whether as a result of new information or due to future developments.
Todd Anthony: During today's call there'll be references to several of Cumberland marketed brands.
Speaker Change: Well I didn't and safety information for each brand is included on the individual product websites.
Speaker Change: And you can find links to those sites on our corporate website at Www Dot Cumberland pharma dotcom.
Speaker Change: Somebody asked me right into the non-GAAP financial measures with respect to its performance.
Speaker Change: An explanation and reconciliation to GAAP measures.
Speaker Change: Out in the financial tables of the earnings release, which was issued earlier this afternoon.
Speaker Change: If you have any questions. Please hold them until the end of the call at which point, we will be happy to answer them.
Speaker Change: Management is also prepared to hold a follow up conversation after the call if you prefer.
Speaker Change: So with that introduction I'll turn the call over to Sundance, Chief Executive Officer, a J kazimi.
Speaker Change: Thank you Mollie and good afternoon, everyone.
Speaker Change: We do appreciate you joining us today as we share our financial results and provide an update on our progress here at Cumberland.
Speaker Change: As Wally mentioned during the call, we'll review both fourth quarter and full year 2024 financial performance.
Speaker Change: Also share a company update which will include some highlights from our successful 2024 as well as some key recent developments.
Speaker Change: So let's begin.
Speaker Change: For those that have been following Cumberland over the years recall, our business strategy has been to acquire and commercialize a portfolio of branded pharmaceuticals that we can grow through our dedicated sales organization domestically and.
Speaker Change: Through our partners internationally.
Speaker Change: We've also built an internal development capability, which enables us to develop and register new medicines, establishing a long term pipeline for our business.
Speaker Change: And that pipeline is enhanced through our Cumberland emerging technologies or C. A T division, which is a joint initiative, mainly with Vanderbilt University and their prominent academic research Center.
Speaker Change: Well, despite various headwinds over the past several years, we've not deviated from these strategies in fact, we continue to move forward by acquiring new brands expanding our sales organization.
Speaker Change: Advancing our development pipeline, securing a series of FDA approvals and broadening our reach there were series of international partnerships.
Speaker Change: And as you'll see in our comments today that steadfast approach is gaining traction.
Speaker Change: And it's now being recognized by the investment community because of the dramatic growth in our share valuation.
Speaker Change: We recently reported significant progress on several fronts.
Speaker Change: We announced positive phase two study data evaluating alright fits your band product candidate in patients with Duchenne muscular dystrophy.
Speaker Change: That breakthrough had a dramatic impact on our share price and trading volumes and I believe it's the first time, we're seeing investors beginning to recognize the value of our development capabilities and pipeline.
Speaker Change: And we learned that our potent antibiotic feed that ive received approval by the regulatory authorities in China, the world's second largest pharmaceutical market.
Speaker Change: Cause that milestone adds to our growing international business. As we also began shipping like that is to Saudi Arabia and completed the needed needed product training to launch the products there.
Speaker Change: Before discussing these achievements in more detail.
Speaker Change: I'd like to take a few minutes and share a number of key developments. During 2024 does that enabled us to make significant progress in advancing our newly refined mission of working together to provide unique products that improve the quality of patient care.
Speaker Change: During 2024, we announced the publication of a new real world outcomes research involving 150000 patients, which compared our ibuprofen injection product caldolor to its key competitor ketorolac.
Speaker Change: <unk> provided compelling evidence that caldolor is associated with a significantly reduced incidents of adverse drug reactions and can also help provide cost savings through improved healthcare system utilization.
Speaker Change: Meanwhile, we reported the FDA approval of a supplemental new drug application for <unk>.
Speaker Change: IV treatment for preventing or lessening the liver injury that occurs after ingestion of potentially toxic quantities receipt of medicine.
Speaker Change: The new streamlined approach reduces the frequency of medication errors and potentially serious non allergic anaphylactic reactions without compromising the effectiveness of our ceded out.
Speaker Change: By simplifying the products' dosing regimen.
Speaker Change: With care providers get administered this lifesaving treatment more efficiently potentially improving patient outcomes.
And thirdly, we received both orphan drug designation.
Speaker Change: Rare pediatric disease designation from the FDA for the use of our it fits your bed product in treating duchenne muscular dystrophy heart disease, reflecting its potential significance.
Speaker Change: Help me with this devastating condition.
Speaker Change: Turning to the Q4 financial results I'm pleased to report our portfolio of FDA approved brands delivered strong net revenues of $10 $4 million, which represented an 11, 6% increase over the prior year period.
Speaker Change: So with that overview I'd now like to turn it over to Todd Anthony covered lives Vice President organizational development.
Todd Anthony: Further discussed with our brands and our organization Todd. Thank you AJ I'll start with an update on each of our major brands.
Todd Anthony: <unk> is our potent intravenous antibiotic designed for difficult to treat infections, such as hospital acquired and ventilator associated pneumonia as well as complicated skin and skin structure infections caused by certain gram positive bacteria.
Todd Anthony: <unk> those that are multi drug resistant.
Todd Anthony: 2024 report from the World Health organization found that anti microbial resistance is becoming an urgent global health and socioeconomic crisis.
Further they noted that the worldwide rise in antibiotic resistance poses a significant threat diminishing the effectiveness of many common antibiotics against widespread bacterial infections.
Todd Anthony: And according to a recent article in land set the global number of deaths from anti microbial resistance is expected to reach nearly 2 million by the year 2050.
Todd Anthony: Unlike many antibiotics that are losing the battle to fight bacteria by bad as unique dual method of action was specifically designed to address drug resistant bacteria.
Todd Anthony: We therefore believe it has lifesaving potential to help many patients.
Todd Anthony: This growing antibiotic resistance crisis, which faces a fragile pipeline of new antibiotics development.
Todd Anthony: To reinforce this message we are conducting a series of infectious insights, which are discussions with infectious disease experts and we are disseminating these results across the country.
Todd Anthony: These video vignettes share of the opportunity and are utilized by bad events the solution for select patient types, where other products have failed.
Todd Anthony: Also in 2020 for anti microbial agents in chemotherapy published a study evaluating <unk> as a novel therapeutic against Anthrax emulation.
Todd Anthony: The most dangerous form of those infections.
Todd Anthony: Researchers were particularly interested in finding alternatives to current antibiotics in case anthrax bacteria have become resistant to them.
Todd Anthony: They concluded that by bad if could potentially be an effective new treatment option for anthrax infections, especially if current antibiotics become less effective due to resistance.
Speaker Change: Moving next to Chris solos, our prescription strength laxative, which is provided in a convenient pre measured powder dose, but dissolves quickly in just four ounces of water, resulting in a clear taste free and grit free solution.
Speaker Change: We have found that the brand performs best in states, where we have Medicaid coverage, such as Texas, New York and Wisconsin.
Speaker Change: In 2024, and we also reported that Crystal OS was being covered on certain Medicaid plans in Virginia, Louisiana and Maine.
We are implementing a special initiative to increase our presence and share of voice in these states and believe that this new coverage is contributing to the growth of the product.
Speaker Change: Also as a reminder, we launched a campaign featuring the American Gastroenterologist will associations guidelines that include Crystal House as a first line treatment option for opioid induced constipation.
Speaker Change: We believe this important recommendation will support the use of Crystal house in patients suffering from these side effects of opioid medications.
Speaker Change: Let's shift now to Caldolor, our intravenous ibuprofen product.
Speaker Change: In March our Caldolor Special report was published in Anesthesiology News General surgery News and pharmacy practice news and it presented the growing amount of data supporting the use of Caldolor as a standard of care for the treatment of pain and fever.
Speaker Change: The results demonstrated that the product is safe and effective treatment for pain and fever in adults and children and infants.
Speaker Change: As a J mentioned, we also announced the publication of new real World outcomes research, demonstrating the safety and health care resource advantages of Caldolor over its main competitor ketorolac in both adult and pediatric populations.
Speaker Change: Study was published in Frontiers of pain research and provides compelling evidence that caldolor is associated with a significantly reduced the incidence of adverse drug reactions and improved health care utilizations when compare to ketorolac.
Speaker Change: With its new pediatric labeling cleared with the FDA. We're very pleased to have further expanded the products use in patients with nearly all ages.
Speaker Change: Caldolor is now the only non opioid product approved to treat pain in fence, that's delivered by an injection.
Speaker Change: We are featuring Caldolor through sales and marketing initiatives, highlighting this new indication, resulting in growing use of the product in our country's children's hospitals.
Speaker Change: Moving next to St Cuso, the only transdermal patch FDA approved for the management of chemotherapy induced nausea.
Speaker Change: Manufacturing for the product was successfully transferred to a new facility that received FDA approval. We then introduced our newly Cumberland packaged product supported by an expanded oncology sales division from which we're seeing a favorable impact on our business.
Speaker Change: Recall that we launched a new sampling program that broadens <unk> access to sand cuso, allowing more patients to try the product and experience its benefits.
Speaker Change: We also introduced a new hub services capability to provide enhanced patient support ensuring that they received comprehensive assistance throughout their treatment journey.
Speaker Change: As a reminder, we now have a total of 50 individuals across the country interacting with the medical community in support of our FDA approved medicines we.
We support our portfolio of FDA approved products through three national sales divisions.
Speaker Change: Our hospital sales division calls on key institutional accounts across the country in support of Caldolor in by bad at our field sales Division covers select office based physicians featuring Crystallose and also promotes caldolor to select outpatient surgery centers and finally, our recently expanded Cumberland.
Speaker Change: Collagen division calls on cancer clinics, promoting our sand cuso product.
Speaker Change: That completes my updates for today, and so I'll turn it back to you a J. Thanks, Todd now I'd like to provide an update on our product development activities. We continue to progress our pipeline of innovative products designed to improve patient care and their quality of life.
Our <unk> product candidate, a potent and selective thromboxane receptor antagonist is being evaluated in phase two clinical trials for patients with a series of unmet medical needs.
Speaker Change: It's now been dosed in nearly 1400 subjects and it's been found to be safe and well tolerated in those individuals', resulting in an outstanding safety database.
Speaker Change: We recently completed a phase two study in patients with cardiomyopathy associated with Duchenne muscular dystrophy, or DMD, a rare fatal genetic neuromuscular disease, which results in the deterioration of the skeletal lung and heart muscles and.
Speaker Change: This marks a breakthrough for these patients as it's the first successful phase two study that specifically targeted the cardiac complications of their condition.
Speaker Change: Recall the previous study conducted at Vanderbilt University Medical Center demonstrated that I've had to revert as is protective against cardiomyopathy in several preclinical models muscular dystrophy.
Speaker Change: And those results were published in the journal of the American Heart Association.
Speaker Change: And based on those promising promising findings we became the first recipient of an FDA office of orphan products critical trial Grant for D. M D, which provided us with over a million dollars in funding for our phase II clinical study.
Speaker Change: The trial enrolled 41 D M D patients who received either a low dose of <unk> 150 milligrams a day.
Speaker Change: Hi, Josef I picture beds at 300 milligrams, a day or placebo.
Speaker Change: The studies primary endpoint was improvement in the Hearts left ventricular ejection fraction or L V F.
Speaker Change: Key findings from the trial include.
Speaker Change: That compared to the placebo group high dose I fit your band treatment resulted in an overall, 3.3% improvement in L V F.
Speaker Change: That difference resulted from the high dose I fit your bank group, showing a one 8% increase or improvement in L. V F. While the placebo group showed the expected decline, which was one 5% again a difference of three 3%.
Speaker Change: Compared with propensity matched natural history controls the difference was even more pronounced with high dose treatment, providing a significant 5.4% overall improvement in L. V E F. As the natural history control patients experienced a loss.
Speaker Change: Three 6% decline.
And both doses were well tolerated with no serious drug related events.
Speaker Change: Recall late last year I fit your band received both orphan drug designation and rare pediatric disease designation from the FDA highlighting its potential significance in treating this devastating condition.
Speaker Change: Other products for DMD patients typically target their neuromuscular neuro skeletal impact of the disease.
Speaker Change: And importantly, our Accenture band program is designed to address the patients cardiomyopathy, which is a thickening of the muscle that we can start.
Speaker Change: Therefore, our product is applicable to all DMD patients targeting cardiovascular condition.
Speaker Change: Often leads to their death.
Speaker Change: Next steps for this program include completion of the full data analysis.
Speaker Change: And the study report in preparation for a meeting with the FDA to determine the remaining path for the products development and commercialization.
Speaker Change: Meanwhile, our two other company sponsored phase II clinical programs are also well underway.
Speaker Change: The first now nearing completion involves patients with systemic sclerosis, or scleroderma, a debilitating autoimmune disorder.
Speaker Change: Characterised by diffuse fibrosis of the skin and internal organs.
Speaker Change: And we're also developing a fisherman to treat idiopathic pulmonary fibrosis. The most common form of progressive fibrosis interstitial lung disease.
Speaker Change: Recent studies have shown that <unk> fit your bed kept both prevent and enhanced resolution of lung fibrosis in several preclinical models.
Speaker Change: In addition to the sponsor studies I've covered there are also other preclinical and pilot patient studies about future ban underway, including several investigator initiated trials.
Speaker Change: You see we believe I said your ban our first new chemical entity has the potential to benefit many patients.
Speaker Change: We look forward to sharing our further progress with the DMD program as well as results from our other company sponsored studies as they emerge.
Speaker Change: Meanwhile, through our work at Cumberland emerging technologies, where CET, we're continuing to build a long term pipeline of innovative new biopharmaceutical products.
Speaker Change: Last year, we announced two development amongst the programs at CET is supporting.
Speaker Change: We announced favorable top line results from an investigator led phase II study evaluating our new treatment for delirium and critically ill patients.
Speaker Change: C. A T also entered into a development agreement with a corporate partner to fund the development of a new product designed to locate the site of internal bleeding in the digestive tract.
Speaker Change: We believe this innovation can lead to faster diagnosis reduce costs and less trauma to the patient.
Speaker Change: So with that update on our new product development programs I would now like to turn it over to our Chief Financial Officer, John him to review, our 2024 financial results John Thank.
John: Thank you a J for the three months ending December 31, 2024, net revenues from continuing operations were $10 $4 million, which represented a $1 $1 million or 11 points.
John: 11, 6% increase over the prior year period.
John: Net revenue by product for the fourth quarter of 2024 included $4 $4 million for Crystal was $2 $4 million for sand KUSA $2 $1 million for buyback and one $4 million for Caldolor as a reminder, due to quarterly fluctuation in our customers' purchases we built.
John: We've our performance should be a SaaS based on annual sales results with that in mind I am pleased to report that net revenue for the full year 2024 were $38 million full year product revenue totaled $15 $3 million for Crystal Rose $9 million for Santa Cruz sur.
John: $6 $9 million to provide that at $5 million for Caldolor.
John: Turning to our expenditures total operating expenses for the fourth quarter were $12 3 million compared to $15 5 million for the prior year period total operating expenses for 2024 or $44 $3 million, a $5 million improvement down from <unk>.
John: $49 1 million during the prior year.
John: Net loss was approximately $1 9 million for the fourth quarter and $6 5 million for the full year. However, when noncash expenses are added back the resulting adjusted loss for the year is reduced to one 5 million or 11, a share also please note that.
John: The adjusted earnings calculations do not include the additional benefit of the point $3 million of iPad and San Cuso cost of goods during the fourth quarter that benefit was $1 $3 million for the full year of 2020 for those goods are received as part of each products acquisition.
John: As a reminder, we're pleased to see that the additions of <unk> <unk> to our product portfolio continue to positively impact our financial performance as a result of the <unk> acquisition, a total of $34 million in new assets were added including approximately $21 million in inventory.
John: $12 million of intangible assets and $1 million of goodwill the estimated value of those assets was $12 $2 million at the end of 2020 for the financial terms for the Vivat transaction included a $20 million payment upon closing and the subsequent $5 million milestone.
John: We also continue to provide royalties tied to product sales.
John: Cuso added a total of $19 million in new assets include approximately $4 million in inventory and $14 million of intangibles. The estimated value of those assets was $11 million at the end of 2024, we provided $13 $5 million at the closing for the Santa Cruz.
John: <unk> acquisition, and we paid $1 5 million in milestone payments. There are also royalties.
John: Based on the brand's sales turning to our balance sheet as of December 31, 2024, we had $76 million in total assets, including $18 million in cash and cash equivalents.
John: Liabilities totaled $53 million, including $15 $3 million on our credit facility.
John: Total shareholders' equity was $23 million at the end of 2024, we continue to hold a bank line of credit, which provides up to $20 million in capital and provides the ability for Cumberland to increase the amount to $25 million under certain conditions. The interest rate is based on benchmark terms so far.
John: And is subject to one financial covenant determined on a quarterly basis. During 2024, we continued our corporate share repurchase program and through the end of December we repurchased a total of 339000 shares those repurchases include dose on the open market as well as those need.
John: To fund the taxes associated with employee vested restricted shares. We also continue the process of implementing new trading plans for our board members, who purchased Cumberland shares throughout 2024 to increase their holdings in the company.
Speaker Change: Lastly, I'd like to note that Kimberly continues to hold $53 million in tax net operating loss carryforwards, primarily resulted from the prior exercise of stock options and that completes our financial report for the final quarter and year end of 2024 back to you a J.
Speaker Change: Thank you John.
Speaker Change: Well overall 2024 was a successful year as we continue to add key components to our foundation that can drive further value creation.
Speaker Change: We're encouraged by the progress of our clinical studies evaluating <unk> in patients with unmet medical needs and we believe the product has the potential to benefit many patients.
Speaker Change: Given the large market those clinical programs are addressing success in just one can potentially transform our company.
Speaker Change: It's also been encouraging to see the literature, featuring the benefits of our caldolor product as well as the favorable international developments, which can result in a significant expansion of our of Vivat if business.
Speaker Change: We continue to see the positive impact of our sales and marketing initiatives that are now supporting the growth of sand cuso and it's been good to see the growing number of states, adding crystallose to their Medicaid formularies.
Speaker Change: Further I would like to remind you we have an active acquisition initiative underway as we continue to seek additional FDA approved brands that complement our portfolio and can be bolted onto our infrastructure.
Speaker Change: And finally, we expect our momentum to continue as we are still in the early stages of capitalizing on the numerous opportunities available to us.
Speaker Change: Well, we'd often pointed out in previous updates that that while many of the positive developments announced didn't impact those quarters revenues they could become important contributors to future shareholder value creation.
Speaker Change: And those predictions are now coming to fruition just as we anticipated.
Speaker Change: Our ongoing success can be driven by continued momentum from our approved brands Inc.
Speaker Change: Increased contributions from international partnerships.
Speaker Change: Ongoing advancement of our clinical development programs and the potential addition of select acquisitions.
Speaker Change: Importantly, Cumberland remains in a solid financial position, which provides us with the ability to execute on our strategy and our objectives.
Speaker Change: We expect to deliver double digit revenue growth this year as well as positive cash flow from operations were.
Speaker Change: We're entering an exciting time for our company and with that report will now open the call to any questions. Operator. Please proceed.
Speaker Change: Thank you, Sir ladies and gentlemen that concludes the Companys presentation, and we will now open the call for any questions if you'd like to ask a question. Please press the star key on your phone followed by the digit one twice that star one one.
Speaker Change: Please standby.
Speaker Change: Well, if there's no questions Oh, that's fine just wanted to thank everybody for joining us for today's call. We do understand many of our shareholders prefer a private discussion with management and so please reach out and we'll be happy to get such a call scheduled with you and hold such a discussion.
As always we appreciate your time and interest in Cumberland, and we look forward to providing another update in the coming months.
Speaker Change: Thank you, Sir ladies and gentlemen that concludes today's call if you'd like to listen to a replay of the discussion. Please visit the Investor Relations section on <unk> website I.
Speaker Change: I would like to thank you for your participation you may now disconnect.
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