Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX) Q2 2025 Earnings Call Transcript

Cumberland Pharmaceuticals Inc. (NASDAQ:CPIX) Q2 2025 Earnings Call Transcript August 6, 2025

Operator: Good afternoon, and welcome to the Cumberland Pharmaceuticals Second Quarter 2025 Financial Report and Company Update. This call is being recorded at the company’s request and will be archived on its website for 1 year from today’s date. I would now like to turn it over to Emily Kent, Account Manager at the Dalton Agency, who handles Cumberland’s Communications. Emily, please proceed.

Unidentified Analyst: Hello, everyone, and thank you for joining us today. This afternoon, Cumberland issued a press release announcing its second quarter financial results. The release also provided an operational update, including key developments during the quarter. The release, which includes the related financial tables, can be found on the company’s website at www.cumberlandpharma.com. Management will share an overview of those financial results during today’s call. They’ll also provide an overall company update, including a discussion of Cumberland’s brands, pipeline and partners. Participating in today’s call are A.J. Kazimi, Cumberland’s Chief Executive Officer; along with Todd Anthony, Vice President, Organizational Development; and John Hamm, Chief Financial Officer.

Please keep in mind that their discussions may include some forward-looking statements as defined in the Private Securities Reform Act. Those statements reflect the company’s current views and expectations concerning future events and may involve risks as well as uncertainties. There are many factors that could affect Cumberland’s future results, including natural disasters, economic downturns, public health, epidemics, international conflicts, trade restrictions and others that are beyond the company’s control. Those issues are described under the caption Risk Factors in Cumberland’s Form 10-K and any additional updates filed with the SEC. Any forward-looking statements made during today’s call are qualified by those risk factors. Despite the company’s best efforts, actual results may differ materially from expectations.

So information shared on this call should be considered current as of today only. Also, please remember that the company isn’t responsible for updating any forward-looking statements, whether as a result of new information or due to future developments. During today’s call, there will be references to several of Cumberland’s marketed brands. Full prescribing and safety information for each brand is included on the individual product websites, and you can find links to those sites on the corporate website at www.cumberlandpharma.com. The company will also be providing some non-GAAP financial measures with respect to its performance. An explanation and reconciliation to GAAP measures can be found in the financial tables of the earnings release issued earlier this afternoon.

If you have any questions, please hold them until the end of the call, at which point, we’ll be happy to answer them. Management is also prepared to hold a follow-up conversation with shareholders after the call, if you prefer. With that introduction, I’ll turn the call over to Cumberland’s Chief Executive Officer, A.J. Kazimi.

Q&A Session

A. J. Kazimi: Thank you, Emily, and good afternoon, everyone. We appreciate you joining us today. As Emily mentioned, during the call, we’ll provide a review of our financial results for the second quarter, and we’ll also discuss the key developments that have occurred during the period. So let’s get started. We’ve enjoyed a strong first half of the year. There were a series of positive developments during the second quarter, which we’ll discuss today that bolster our optimistic view about the company’s future. Earlier this year, we announced positive top line results from the Phase II study evaluating our ifetroban product candidate and patients with Duchenne muscular dystrophy or DMD. In June, those breakthrough findings were presented at the Parent Project Muscular Dystrophy Annual Conference, and they demonstrated that high-dose ifetroban delivered a 5.4% improvement in the cardiac functions in the patients with DMD.

The June presentation also included additional biomarker data indicating reduced cardiac damage, which correlated with the clinical findings. These results position ifetroban as a potential treatment for DMD cardiomyopathy, the leading cause of death in these patients and a critical unmet medical need affecting 90% of DMD patients by age 18. The FIGHT DMD study findings were previously selected for a late-breaking presentation in March at the Muscular Dystrophy Association’s Clinical and Scientific Conference, which underscore the significant interest in our approach. In June, we completed the comprehensive analysis of the trial results. We prepared our clinical study report and then we submitted that report to the FDA. We followed with a request for an end of Phase II meeting.

We’re very appreciative of the FDA’s prompt response, and we are scheduled to meet with them this fall to discuss our clinical program and also discuss the development pathway forward. Meanwhile, we previously shared that our potential antibiotic Vibativ received approval from the regulatory authorities in China. That milestone provides us with access to the world’s second largest pharmaceutical market, and we’re now preparing to support the launch of Vibativ there. We also shared a new partnership with Saudi-based Tabuk Pharmaceuticals to introduce Vibativ into the Middle East. We began shipping Vibativ there, and we’ve completed the training required to launch the product in that country. Turning to our second quarter financial results. I’m pleased to report our portfolio of FDA-approved brands delivered combined revenues of $10.8 million during the quarter, a 10% increase over the same period last year.

Year-to-date revenues for the first 6 months of the year totaled $22.6 million, a 23% increase over the prior year period. Adjusted earnings for the second quarter were $0.4 million. And for the first half of this year, adjusted earnings were $2.8 million or $0.18 a share, up significantly from the same period last year. In addition, our business generated $4.7 million in cash flow from operations during the first 6 months of 2025. On our balance sheet, we held $68 million in total assets, including $16 million in cash and cash equivalents. Liabilities were $40 million and shareholders’ equity totaled $28 million, all at the end of the quarter. So with that overview, I’d now like to turn to Todd Anthony, Cumberland’s Vice President, Organizational Development, to discuss both our brands and our sales organization.

Todd?

Todd M. Anthony: Well, thank you, A.J. I’ll start by sharing an update on each of our major brands. Vibativ is our 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, including those that are multidrug resistant. As a reminder, a 2024 report from the World Health Organization found that antimicrobial resistance is becoming an urgent global health and socioeconomic crisis. They noted that the worldwide rise in antibiotic resistance poses a significant threat, diminishing the effectiveness of many common antibiotics against widespread bacterial infections.

Recall that unlike many antibiotics that are losing the battle to fight bacteria, Vibativ has a unique dual method of action specifically designed to address drug-resistant bacteria. We, therefore, believe it has life-saving potential to help many patients amid this growing antibiotic resistance crisis, which faces a fragile pipeline of new antibiotic development. To reinforce this message, we are conducting a series of infectious insights, which are discussions with infectious disease experts that we are disseminating across the country. These video vignettes share the opportunity to use Vibativ as a solution for select patient types where other products have failed. Also in June, a comprehensive new pharmacokinetic analysis of Vibativ was published in the journal Antimicrobial Agents and Chemotherapy.

The analysis utilizes data from over 1,200 patients across varied demographics and comorbidity profiles. The findings support optimized dosing strategies for patients with different infection severities and renal function levels, which reinforces Vibativ’s critical role in treating life-threatening gram-positive infections. We also recently announced the availability of the Vibativ 4-Vial Starter Pak through a new supply arrangement with Vizient, making it accessible to their health care members nationwide. As the country’s largest provider-driven health care performance improvement company, Vizient serves more than 65% of the nation’s acute care providers. Through this agreement, Vizient members now have access to Vibativ’s new 4-vial configuration, which supports flexible treatment initiation in both the inpatient and outpatient settings for this potentially life-saving therapy.

Moving next to Kristalose, our prescription strength laxative provided in a convenient premeasured powder dose that dissolves quickly in just 4 ounces of water, resulting in a clear, taste-free and grit-free solution. As previously mentioned, we found that the brand performs best in states where we have Medicaid coverage. We are enhancing support for Kristalose by updating key marketing materials to better educate health care providers and patients about the product’s benefits. We are also establishing new specialty distribution partnerships to improve the patient access to the product. Shifting now to Caldolor, our intravenous ibuprofen product. With its newest pediatric labeling cleared with the FDA, Caldolor is now the only non-opioid product approved to treat pain in infants that’s delivered by an injection.

We are featuring Caldolor through sales and marketing initiatives highlighting this new indication, resulting in a growing use of the product in our country’s children’s hospitals. In May, we announced the publication of our study investigating Caldolor in Clinical Therapeutics, another journal, demonstrating the product’s safety and efficacy for managing postoperative pain in patients 60 years of age and older. The analysis, which encompassed over 1,000 patients from our comprehensive postsurgical studies represents the first such evaluation in this valuable — vulnerable population where traditional pain management options such as opioids carry increased risk. Turning to Sancuso, the only transdermal patch FDA approved for the management of chemotherapy-induced nausea.

We continue to see favorable sales results following the expansion of our oncology sales force. As a reminder, we recently introduced a revised sampling program that expands patient trial and use of the product and are updating messaging to better connect with health care providers and their patients. Additionally, we are featuring a new hub services capability to provide enhanced patient support, including prior authorization insurance support and co-pay savings for our patients. Let’s now review our Vaprisol product, the only intravenously administered vasopressin receptor antagonist. It’s used to raise serum sodium levels in hospitalized patients with hyponatremia, the most common electrolyte disorder among these patients. Recall that our new manufacturing and distribution partner for Vaprisol successfully began producing the product in their facility, and they are now awaiting FDA inspection of that site.

Once they receive regulatory clearance, we will file for the approval to manufacture branded Vaprisol there. Well, that completes my updates for today, A.J., and so I’ll turn it back to you.

A. J. Kazimi: Thank you, Todd. I’d now like to provide an update on our ongoing clinical activities. We continue to progress our pipeline of innovative products designed to improve patient care and their quality of life. Our ifetroban product candidate, a potent and selective thromboxane receptor antagonist is being evaluated in several Phase II clinical trials for patients with a series of unmet medical needs. It’s now been dosed in nearly 1,400 subjects and has been found to be safe and well tolerated in those individuals, resulting in an outstanding safety database for the product. I mentioned the favorable results from our Phase II study in patients with Duchenne muscular dystrophy. In addition, we’ve been evaluating ifetroban in another Phase II clinical program in patients with systemic sclerosis or scleroderma.

It’s the deadliest of the autoimmune diseases. Enrollment in this study was completed earlier this year, and we’re now monitoring the clinical sites in preparation to lock the database and begin evaluating the results. We do expect to announce top line findings from this study later this year. We also have a Phase II clinical study, the fighting fibrosis trial underway in patients with idiopathic pulmonary fibrosis, the most common form of progressive fibrosing interstitial lung disease. Patient enrollment is proceeding swiftly in this study in medical centers across the country. The study design does include both an interim safety analysis as well as an interim efficacy analysis. In May, we announced a partnership with Qureight, a core imaging laboratory developing deep learning image analytics, which is based in Cambridge, U.K. to enhance the outcome and output of data from our fighting fibrosis clinical trial.

The partnership will utilize their advanced deep learning image analytic tools for complex lung disease applications to provide deeper insights into treatment efficacy and disease progression in our IPF clinical program. So in summary, we believe ifetroban, which is our first new chemical entity, has the potential to benefit many patients, and we look forward to sharing our further progress, including the results from additional company-sponsored studies as they emerge. So with that update on our clinical activities, I’d now like to look to our Chief Financial Officer, John Hamm, to review our second quarter and year-to-date financial results. John?

John Michael Hamm: Thank you, A.J. For the 3 months ending June 30, 2025, net revenue from continuing operations was $10.8 million, which represented a 10% increase over the prior year period. Revenue for the first 6 months of the year totaled $22.6 million, a 23% increase over the first half of 2024. Net revenue by product for the second quarter of 2025 included $2.8 million for Kristalose, $3.1 million for Sancuso, $2.7 million for Vibativ and $1.6 million for Caldolor. Year-to-date, product revenue totaled $6.2 million for Kristalose, $4.1 million for Vibativ, $5.4 million for Sancuso and $2.9 million for Caldolor. Turning to our expenditures. Total operating expense for the second quarter were $11.6 million. Year-to-date expenses totaled $22 million.

The net loss for the quarter was $0.7 million, a significant improvement over the prior year period. Year-to-date net income was $0.5 million and when noncash expenses are added back, the resulting adjusted earnings were $2.8 million or $0.18 a share. Also, please note that the adjusted earnings calculations do not include the additional benefit of the $0.3 million of Vibativ cost of goods during the second quarter. Those goods were received as part of the products acquisition. We’re pleased to see that the additions of Vibativ and Sancuso to our portfolio continue to positively impact our financial performance. As a result of the Vibativ acquisition, a total of $34 million in new assets were added, including approximately $21 million in inventory, $12 million of intangible assets and $1 million of goodwill.

The estimated value of those assets was $10.4 million at the end of the second quarter. The financial terms for the Vibativ transaction included a $20 million payment upon closing and a subsequent $5 million milestone payment. We also continue to provide royalties tied to product sales. Sancuso added a total of $19 million in new assets, including approximately $4 million in inventory and $14 million of intangibles. The estimated value of those assets was $9.5 million at the end of the second quarter. We provided $13.5 million at the closing for the Sancuso acquisition, and we also paid $1.5 million in milestone payments. These are — there are ongoing royalties that we pay based on the brand sales. Turning to our balance sheet. As of June 30, 2025, we had $68 (sic) [$78.5 million] in total assets, including $16 million (sic) [$17.3 million] in cash and cash equivalents.

Liabilities totaled $40 million (sic) [$52.5 million] including $5.2 million (sic) [$16.1 million] for our credit facility. Total shareholders’ equity was $28 million (sic) [$26.3 million] at the end of the quarter. We continue to hold a bank line of credit, which provides up to $20 million in capital. The interest rate is based on benchmark term SOFR and is subject to a financial covenant determined on a quarterly basis, and we were in compliance at the end of the second quarter. We are also continuing the process of implementing new trading plans for our Board members who will purchase Cumberland shares throughout the year to increase their holdings in the company. Lastly, I’d like to note that Cumberland continues to hold over $52 million in tax net operating loss carryforwards, primarily resulting from the prior exercise of stock options.

And that completes our financial report for the second quarter of 2025. Back to you, A.J.

A. J. Kazimi: Well, thank you, John. Overall, it’s been a strong start to the year, and we’ve entered an exciting time for our company. We remain dedicated to our mission of working together to provide unique products that improve the quality of patient care. We’re pursuing our mission by building a portfolio of FDA-approved brands with outstanding safety and efficacy profiles that can make a difference in patient lives. We continue to support our brands through our 3 dedicated sales divisions, each focused on strategic segments of the health care market. And we’re encouraged by the progress of our ifetroban clinical studies as we continue to pursue therapeutic solutions for unmet medical needs. Looking ahead, we expect continued momentum across our approved brands, increased international contributions, further progress in our clinical pipeline and new opportunities through the select addition of new products.

We have a lean, highly productive organization and the achievements outlined today were made possible by the dedication and fine efforts of our outstanding team. We look forward to providing updates on further developments as they unfold and as the year progresses. And now let’s open the call to any questions. Operator, please proceed.

Operator: Thank you, sir. Ladies and gentlemen, that concludes the company’s presentation. We would now like to open the call up for any questions. [Operator Instructions] I am showing no questions at this time. I would like to turn it back over to A.J. for closing remarks.

A. J. Kazimi: Well, thank you. I just want to tell everyone we appreciate you joining us for today’s call. We do understand that many of our shareholders would like to have a private discussion with management. And if you would, please just reach out, and we’ll be happy to get such a session scheduled and hold such a discussion. As always, thank you for your time and interest in our company, and we’ll look forward to providing another update in the coming months.

Operator: Thank you. Ladies and gentlemen, that concludes today’s call. If you would like to listen to a replay of the discussion, please visit the Investor Relations section on Cumberland’s website. I would like to thank you for your participation. You may now disconnect.