Cumberland Pharmaceuticals Inc
Annual Report 2023

Plain-text annual report

Working together to provide unique products that improve patient care 2023 Annual Report 2023 Highlights Delivering Our Products to New Patients May | Caldolor® Newborn Indication & Study Publication The FDA approved expanded labeling for our Caldolor product, an intravenously delivered formulation of ibuprofen, to include use in infants. The non-narcotic agent may now be administered for the treatment of pain and fever in patients 3 to 6 months of age. With this newly approved labeling, Caldolor is the only non-opioid product approved to treat pain in infants that is delivered through injection. We also shared the positive results from a clinical study investigating the safety and pharmacokinetics of Caldolor in newborns, published in the journal Pediatric Drugs. The results of the study support the growing body of evidence that demonstrates Caldolor is a safe therapeutic option available to practitioners for the treatment of fever and pain in infants, children and adults. June | Expanded Oncology Sales Division We expanded our oncology sales division as we work to deliver our newest brand Sancuso® – to help cancer patients tolerate their chemotherapy treatments. Sancuso is the first and only FDA-approved prescription patch for the prevention of nausea and vomiting in patients receiving certain types of chemotherapy. October | New Vibativ® Pediatric Study Publication We announced a new publication in Antimicrobial Agents and Chemotherapy detailing the results of the first clinical study investigating the safety and pharmacokinetics of our Vibativ product in children 2 to 17 years of age. Vibativ is an intravenous antibiotic approved by the FDA for the treatment of hospital-acquired and ventilator-associated bacterial pneumonia, as well as complicated skin and skin structure infections caused by certain gram-positive bacteria. The results of the study suggest that a single dose of Vibativ is safe in children and they experience reduced exposure to Vibativ, compared with the same body weight-based dosing in adults. 2 Cumberland Pharmaceuticals 2023 Annual Report 1 To Our Shareholders, Employees & Partners: In many ways 2023 was a building year for Cumberland, as we continued to integrate our newest products, while also delivering several significant achievements. During the year we took a fresh look at our mission statement and refined it to better capture the spirit of what we do each day at Cumberland. Our mission is now: working together to provide unique products that improve the quality of patient care. Additionally, we shared the results of the first pediatric study investigating the safety and pharmacokinetics of our Vibativ product. The results suggest that a single dose of Vibativ can be safely administered to children to fight certain serious skin and lung infections. Meanwhile, we completed the expansion of our oncology sales division as we work to deliver our newest brand, Sancuso, to cancer patients. In designing this statement, we considered several factors. First, we wanted our mission to address the constituencies we serve, which include patients in need of care, as well as health care providers, our employees, shareholders, partners and community. We also sought to reflect Cumberland’s culture, where teamwork is prized, emphasized and expected – in order to achieve our goals. Next, it needed to demonstrate our focus on developing, acquiring and distributing differentiated brands. And finally, we wanted to emphasize that the patient is at the core of everything we do. Our collective efforts are directed at providing unique products that serve as better alternatives for poorly met medical needs. Now, as we report on the progress we made throughout 2023, we are pleased to share a few exciting updates including the growth opportunities for our portfolio of branded medicines. Following the FDA’s approval to expand the labeling for Caldolor, our non-narcotic agent may now be administered for the treatment of pain and fever in patients 3 to 6 months of age. This expanded use was further supported by the publication of positive results from a clinical study investigating the safety and pharmacokinetics of Caldolor in newborns. We are thrilled to extend Caldolor’s labeling for these youngest of patients. As we remain focused on delivering our products to patients within the U.S., we continue to work with our partners in their efforts to register and launch Vibativ in several international markets, which should provide significant future catalysts for the brand. We also continue to progress our pipeline of innovative products designed to improve patient care and patients’ quality of life. Our ifetroban product candidate is being evaluated in a number of Phase II clinical trials for patients with a series of unmet medical needs. It has now been dosed in nearly 1,400 subjects and has been found to be safe and well tolerated in those individuals. We look forward to sharing the results from these studies as they emerge and then deciding on the best development path for the product, which we believe has the potential to benefit many patients. We remain committed to fulfilling our newly refined mission by building a portfolio of specialty pharmaceutical brands, which we do by maximizing the potential of our commercial brands, progressing our pipeline and also pursuing select acquisitions. All the best, A.J. Kazimi Chairman and Chief Executive Officer 2 Cumberland Pharmaceuticals 2023 Annual Report 1 Products to enhance patients’ lives For more information on Cumberland’s approved products, including safety and full prescribing information, please visit links to the individual product websites, which can be found on our corporate website, www.cumberlandpharma.com. 2 Cumberland Pharmaceuticals 2023 Annual Report 3 Products to enhance patients’ lives Addressing unmet medical needs through our product portfolio With a focus on underserved, specialty markets, including hospital acute care, gastroenterology and oncology, we develop and acquire medicines that are designed to offer distinct advantages over prior treatments. Our portfolio of FDA-approved brands is supported through our hospital, field, and oncology sales divisions along with our national accounts and field-based medical teams across the United States. Our commercial product line includes the brands shown below. (acetylcysteine) An injection used for the treatment of acetaminophen poisoning, which is the leading cause of drug toxicity in the U.S. (lactulose) The only branded prescription laxative product that combines the established safety and efficacy of lactulose with the convenience and portability of a pre-measured dose (granisetron) The first and only FDA- approved prescription patch that prevents nausea and vomiting in patients receiving certain types of chemotherapy treatment (ibuprofen) The first injectable therapy approved in the U.S. for the treatment of both pain and fever (conivaptan) The first and only intravenously administered vasopressin receptor antagonist, which is used to raise serum sodium levels in hospitalized patients with euvolemic and hypervolemic hyponatremia (telavancin) An injection used for the treatment of certain serious bacterial infections, including hospital-acquired and ventilator-associated bacterial pneumonia, as well as complicated skin and skin structure infections 2 Cumberland Pharmaceuticals 2023 Annual Report 3 Building a Pipeline of Differentiated Products In addition to our portfolio of FDA-approved brands, we continue to advance our pipeline of new product candidates. All part of our ifetroban program, our development candidates have the potential to help multiple patient populations and are designed to treat conditions for which there is currently no FDA-approved pharmaceutical treatment. Our Pipeline Includes: Preclinical IND Phase I Phase II Phase III NDA Dyscorban® An oral capsule to treat cardiomyopathy associated with duchenne muscular dystrophy (DMD), a fatal, genetic neuromuscular disease The FDA has cleared the Investigational New Drug (IND) application for this program and a Phase II clinical trial in DMD patients has been initiated, with enrollment advancing. The FDA has also provided grant awards of over $1 million to support this study. Vasculan® An oral capsule to treat systemic sclerosis (SSc), also known as scleroderma, a rare, debilitating autoimmune disorder that results in a thickening of the skin and internal organs With FDA clearance of our IND, this Phase II study in SSc patients is well underway. We are also developing an oral capsule to treat idiopathic pulmonary fibrosis (IPF), the most common form of progressive fibrosing interstitial lung disease Following FDA clearance of our IND, we are in the process of initiating our Phase II study in IPF patients in centers of excellence across the U.S. 4 Cumberland Pharmaceuticals 2023 Annual Report 5 Cumberland Emerging Technologies A collaboration to advance biomedical innovation The U.S. leads the world in biomedical innovation, including the development of new medicines. To create a long-term product pipeline and also help build the local biomedical industry, we formed Cumberland Emerging Technologies (CET). As a majority owned subsidiary of Cumberland Pharma, CET helps inventor scientists and life science companies develop health care solutions and provides needed support to advance these solutions toward the commercial marketplace. CET partners with several major academic research institutions, led by joint activities with Vanderbilt University and the Vanderbilt Medical Center. Together we work to identify early-stage biomedical research opportunities and develop the resulting new biopharmaceutical product candidates to improve patient care. CET has also established and manages the Nashville Life Sciences Center, which serves as an incubator for Middle Tennessee’s emerging biomedical industry. CET represents a joint initiative between Cumberland Pharmaceuticals, Vanderbilt University, Launch Tennessee – a state- supported network created to empower Tennessee’s entrepreneurial ecosystem – and WinHealth Pharmaceuticals – our international partner. At CET we team with academic research groups and support the development process for selected projects, providing critical expertise on intellectual property, regulatory, manufacturing and marketing issues essential to the successful development of new biomedical products. The Life Sciences Center provides offices, laboratory space, and equipment to early-stage companies looking to develop their technologies and products. We maintain the Cumberland Pharmaceuticals formulation and testing laboratory at the CET Life Sciences Center. Nearly 30 life science companies exist today because of CET, including a vibrant group of current tenants at the Life Sciences Center as well as a growing number of successful graduates. 4 Cumberland Pharmaceuticals 2023 Annual Report 5 Providing Medicines to Patients Around the World A look at our key international partnerships Bringing our medicines to patients throughout the world through a growing network of distinguished international partners Tennessee Cardinal Health Inc. provides warehousing, shipping and other distribution support for our products in the U.S. Mexico PiSA Pharmaceutical is our commercial partner for Caldolor. Saudi Arabia and Jordan Tabuk Pharmaceutical Manufacturing Company is our commercial partner for Vibativ. 6 Cumberland Pharmaceuticals 2023 Annual Report 7 To provide for the availability of our products, we have established a network of distribution partners. Our international partners are responsible for registering and commercializing select Cumberland products, allowing us to provide our unique medicines to better the quality of patient lives in their countries. Russia and CIS R-Pharm JSC is our commercial partner for Vibativ. South Korea D.B. Pharm Korea Co. Ltd. is our commercial partner for Caldolor and Vibativ. China WinHealth Pharma Group is our commercial partner for Caldolor and Acetadote, and an investor in Cumberland Emerging Technologies. SciClone Pharmaceuticals is our commercial partner for Vibativ. 6 Cumberland Pharmaceuticals 2023 Annual Report 7 Australia Phebra Pty Ltd. is our commercial partner for Acetadote and Caldolor. India Sandor Medicaids Pvt. Ltd. is our commercial partner for Caldolor. The once-daily antibiotic infusion with a dual mechanism of action indicated for MRSA and MSSA 8 Cumberland Pharmaceuticals 2023 Annual Report 9 Sustainability 2023 At a Glance ENVIRONMENT Supplies Contracted with third-party companies for the manufacturing, packaging and warehousing of our products Waste Ensured strict guidelines and processes for the safe, permanent disposal of all unused product Returns Received and disposed of 5,891 pounds of damaged and expired products SOCIAL Community Involvement Cumberland Pharma Foundation Contributed to Denver Health, Loyola University, Tennessee State Museum, American Heart Association, Tennessee Historical Society, Belmont University & University of Mississippi Sponsorships Nashville Health Care Council’s Wall Street’s View of Healthcare Event Associations • Nashville Health Care Council • Life Science Tennessee • Nashville Chamber of Commerce Life Sciences Center Provide a lab and incubator to help build the biomedical industry in our area GOVERNANCE Board Independent – 7 of 8 Tenure – Average 9.8 years Age – Average 66 years Male/ Female – 6/1 Turnover – None Board Meeting Attendance 100% Standing Committee Attendance 100% SOCIAL Employees Male – 56% Female – 44% Minorities – 15% Ages 6.5% below 30 27.5% between 30 & 50 66% over 50 Turnover – 19.1% Additions – 20% Career Development Program Available to all corporate employees Cumberland Academy Provides industry training for corporate employees Tenures 35% @ 5 or more years 25% @ 10 or more years 10% @ 15 or more years Training Average $4,000 per full-time employee Work-related injuries None SOCIAL Patients Provided 3 million doses of our products to patients Clinical Trials Safety No trials terminated due to failure to practice good clinical standards Advocacy Groups Supported • Muscular Dystrophy Association • Parent Project Muscular Dystrophy Drug Safety Results • No products listed in the FDA’ s MedWatch Safety Alerts • No products recalled Patient AffordAbility We cover up to 71% of patient Rx costs through coupons for our GI brand GOVERNANCE Compliance GOVERNANCE Government Relations Code of Conduct Establishes guidelines for all Board members and employees Cumberland Health & Wellness PAC Supports candidates, elected officials and relevant legislation Ethical Marketing No government judgments, decrees or fines Health Care Professionals All reports regarding relations filed on time 8 Cumberland Pharmaceuticals 2023 Annual Report 9 Selected Financial Data Our strategy involves maximizing the potential of our existing brands while continuing to build a portfolio of unique, differentiated products. The result of these efforts has strengthened our market presence, diversified our revenue stream and delivered positive cash flow from operations in 2023. (dollars in thousands except per share data) Net Revenues Less Total Expenses Net Income (Loss) Cash Flow from Operating Activities Total Assets Total Liabilities Total Equity 2019 $47,553 51,091 (3,538) 3,056 104,549 53,464 51,085 2020 $37,441 40,780 (3,339) 5,415 96,463 49,590 46,873 2021 $35,985 39,493 (3,508) 6,342 84,460 41,858 42,602 2022 $42,011 47,661 (5,650) 8,453 92,925 56,951 35,974 2023 $39,553 45,884 (6,331) 6,094 81,776 52,516 29,260 Reconciliation of Net Income (Loss) Attributable to Common Shareholders to Adjusted Earnings and Adjusted Diluted Earnings Per Share (1) (Unaudited) (dollars in thousands except per share data) 2019 2020 2021 2022 2023 Net Income (Loss) from Continuing Operations Adjustments to Net Income (Loss) Income Tax Expense (Benefit) Depreciation and Amortization Share-Based Compensation Other Adjustments to Net Income (1) Interest Income Interest Expense Adjusted Earnings ($3,538) ($6,625) ($5,597) ($5,650) ($6,331) (79) 4,404 1,486 – (243) 56 4,749 1,047 440 (75) 35 4,606 742 (1,051) (26) 246 263 98 69 5,328 447 1,368 (98) 586 46 8,280 365 (347) (287) 668 ($2,276) ($146) ($1,193) $2,050 $2,394 Adjusted Diluted Earnings per Share ($0.32) ($0.01) ($0.08) $0.14 $0.17 Diluted Weighted-Average Common Shares Outstanding: 15,764 15,162 14,905 14,809 14,526 (1) The supplemental financial measures are Non-GAAP as defined, the reconciliation of these supplemental measures is above. 10 Cumberland Pharmaceuticals 2023 Annual Report 11 Board of Directors A.J. Kazimi Chairman Chief Executive Officer Cumberland Pharmaceuticals James R. Jones Director Former Managing Partner KPMG LLP-Nashville Dr. Gordon R. Bernard Director Professor of Medicine Division of Pulmonary & Critical Care Medicine Vanderbilt University Medical Center Kenneth J. Krogulski Lead Director Managing Partner and Chief Investment Officer Berkshire Asset Management Caroline R. Young Director Vice President of Partnership Development Frist Cressey Ventures Former President Nashville Health Care Council Martin S. Brown Director Attorney of Counsel Adams and Reese LLP Former Board Director Brown-Forman Corporation Joseph C. Galante Director Former Chairman Sony Music Nashville Former President RCA Records 10 Cumberland Pharmaceuticals 2023 Annual Report 11 Corporate Information Forward-Looking Statements This annual report includes forward- looking statements regarding expected future results of the company. A variety of factors could cause actual results to differ materially from expected results. Please see the risk factors more fully described in our Annual Report on Form 10-K for the year ended December 31, 2023, which is filed with the U.S. Securities and Exchange Commission. Company Headquarters Cumberland Pharmaceuticals Inc. 1600 West End Avenue, Suite 1300 Nashville, TN 37203 Phone: (615) 255-0068 Toll Free: (877) 484-2700 Fax: (615) 255-0094 Stock Listing NASDAQ Global Select Market Ticker Symbol: CPIX Annual Meeting 9:30 a.m. Central Time Wednesday, April 24, 2024 Cumberland Headquarters 1600 West End Avenue, Suite 1300 Nashville, TN 37203 Independent Registered Public Accounting Firm Carr, Riggs & Ingram, LLC 3011 Armory Drive, Suite 300 Nashville, TN 37204 (615) 665-1811 Transfer Agent and Registrar Continental Stock Transfer & Trust Company 1 State Street, 30th Floor New York, NY 10004 (800) 509-5586 (212) 509-4000 cstmail@continentalstock.com 

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