Cumberland Pharmaceuticals Inc.

Good afternoon and welcome to Cumberland Pharmaceuticals' third quarter 2023 company update and financial report. This call is being recorded at Cumberland's request and will be archived on the company's website for one year from today's date. I would now like to turn it over to Molly Agus, Account Supervisor at the Dalton Agency, who handles Cumberland's communications. Molly, please go ahead.

Hello, everyone. Good afternoon. Thanks for joining today's call. Earlier today, Cumberland issued a press release announcing the company's financial results with an operational update for the third quarter ending September 30th, 2023. The release, which includes the related financial tables, can be found on the company's website at www.cumberlandpharma.com. During today's call, management will share an overview of those financial results. They'll also provide an overall company update, including a discussion of its brand, pipeline, and partners. Participating in today's call are A.J. Kazemi, Cumberland's Chief Executive Officer, Todd Anthony, Vice President, Organizational Development, and John Hamm, Chief Financial Officer. Please keep in mind that their discussions may include 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 and uncertainties. There are many factors that could affect Cumberland's future results, including natural disasters, economic downturns, public health epidemics, international conflicts, 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. 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 the links to those sites can be found on the corporate website at www.cumberlandpharma.com. The company will also provide 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 that was issued earlier today. 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's also prepared to hold a follow-up conversation after the call if that's your preference. So with that overview, I'll turn the call over to Cumberland's Chief Executive Officer, A.J. Kazemi.

Thank you, Molly, and good afternoon, everyone. I do have a slight cough today, so please bear with me. We appreciate your taking the time to join us today as we share how the year is going. As Molly mentioned, During today's call, we'll provide both a company update as well as a review of our financial results for the third quarter of 2023. I'd like to start by mentioning that we've recently refined our mission statement to better capture the spirit of what we endeavor to do here each day at Cumberland. It now reads as follows, working together to provide unique products that improve the quality of patient care. In designing this statement, we took into account several factors. First, we wanted a mission that's designed to address the constituents we serve, which include the patients in need of care, healthcare providers, our employees, our shareholders, our partners, and our community. We also wanted 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, it emphasizes that the patient is at the core of everything we do. Our collective efforts are directed at providing better alternatives for poorly met medical needs. Our hope is that everyone across our organization will embrace our newly refined mission statement and use it not only as an inspiration, but also as a guide in supporting the achievement of our goals. Our strategy for fulfilling this mission is to build a portfolio of specialty pharmaceutical brands. I'm touching on a few. Our Sancuso patch is the only FDA-approved prescription patch for the prevention of certain side effects in oncology patients receiving chemotherapy treatment. Caldolor is the only injectable therapy approved in the U.S. for the treatment of both pain and fever in a wide range of patients. That includes children, adults, and now newborns. And Crystallose is the only branded prescription laxative that combines the established safety and efficacy of lactulose with the convenience and portability of a pre-measured dose. So now as we reflect on the progress we've made throughout 2023, we are pleased to share a number of exciting updates and growth opportunities for our product portfolio. For example, we continue to work with our partners in their efforts to register and launch Vibative in several international markets, which should provide significant future catalysts for the brand. Tabook Pharmaceuticals has updated Vibative's approval in Saudi Arabia with new manufacturing information as they plan to introduce the product into the Middle East. DB Farm, our partner in South Korea, who also distributes Caldolor, is awaiting the approval of Vibative in their country. And Sky Clone Pharmaceuticals, our Vibative partner for the Chinese market, has continued to respond to regulatory inquiries as they seek approval in their country. We now await the approval of these three initiatives and look forward to the launch of our product in those markets. We recently announced the publication of positive results from a clinical study investigating the safety and pharmacokinetics of our Caldolor product in newborns. which supported the brand's FDA approval in infants of three to six months of age. And we're thrilled to further expand Calderlor's labeling the youngest of patients. Additionally, we expect Calderlor will be eligible for special Medicare reimbursement under the new no pain legislation. The act is scheduled to go into effect in early 2025 and we expect CMS to next issue regulations for implementing the Act and the amount of the separate reimbursement. Meanwhile, we've completed the expansion of our Oncology Sales Division as we work to expand the use of our newest brand, Sancuso, to help cancer patients tolerate their chemotherapy treatments. Our largest selling brand, Crystalose, is now beginning to benefit from its listing on the New York State Medicaid formulary. And we're glad to share today that we have now successfully transferred the manufacturing of our Vaprizol product to a new facility. Following that successful production of the first batches, we're now planning to provide supplies of a special compounded conovaptant product on an interim basis to the market starting at the end of this year. We then expect to file for the approval of Vaprazole at the new plant in order to then relaunch the branded version of the product in the future. Turning next to some highlights on our financial performance, during the third quarter our product portfolio of FDA approved brands delivered combined revenues of $10.1 million and year to date revenues totaled $30.2 million. Adjusted earnings for the quarter were $260,000, or two cents a share, and the year to date adjusted earnings were totaled $4.2 million, or 29 cents a share. Also, I'm pleased to report that cash flow from operations this year has totaled $5.1 million. We ended the third quarter with $88 million in total assets, $52 million in liabilities, and $36 million in shareholders' equity. Additionally, I'm very pleased to report that we entered into a new revolving credit loan agreement for a $20 million facility expandable to $25 million with a three-year term. So with that overview, now I'd like to turn to Todd Anthony, Cumberland's Vice President, Organizational Development, to further discuss our brands. Todd?

Thank you, AJ. Regarding our Vibative product, in October we announced a new publication in the journal Antimicrobial Agents and Chemotherapy, detailing the results of the first clinical study investigating the safety and pharmacokinetics of our Vibative injection in children 2 to 17 years of age. The results of this study suggest that a single dose of Vibative can be safely administered to children to fight certain serious skin and lung infections in those patients. Vibative 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. Antimicrobial resistance poses a significant challenge in the treatment of bacterial infections necessitating the development of new antibiotic therapies. We are pleased to see that viabative sales continue to improve and are up 13% year-to-date as we have a number of new initiatives underway to improve the brand's performance. Turning next to Crystallose, our prescription strength laxative packaged in a convenient pre-measured powder dose that dissolves quickly in just four ounces of water for a clear, taste-free, and grit-free solution. It continues to be our largest selling product and is benefiting nicely from the support of our two co-promotion partners with this year's sales up 8% over the prior year period. Additionally, we found that the brand performs best in states where we have Medicaid coverage. New York State recently added Crystallose to its Medicaid formulary. and we are implementing a special initiative to increase our presence and our share of voice in that state. We believe that this new coverage is contributing to the growth of the product. As AJ mentioned, we believe Calvelor, our non-opioid analgesic injection product, will be eligible for special Medicare reimbursement under the new Non-Opioids Prevent Addiction in the Nation, or Nopain, legislation which was enacted as part of the Consolidated Appropriations Act of 2023. The No Pain Act requires Medicare to provide separate and more favorable reimbursement for non-opioid products that are used to manage pain during surgeries conducted in hospital outpatient departments or ambulatory surgical centers. This legislation applies to products that are indicated to provide analgesia without acting upon the body's opioid receptors. As a result, we believe that the No Pain Act will affect Medicare reimbursement for Caldolor. In the Medicare Hospital Outpatient Prospective Payment System proposed rule, the CMS requested that manufacturers with potentially applicable non-opioid products submit comments in supporting clinical evidence regarding products that should be eligible for separate payment. We submitted a comment letter along with the requisite clinical information to the CMS in September of 2023, explaining why CalValor should be included and separately reimbursed. The Act is scheduled to go into effect in early 2025 and will apply to those products that are furnished between January 1st, 2025 and January 1st, 2028. Also, with the newly approved labeling, AJ noted, Calvalor is now the only non-opioid product approved to treat pain in infants that's delivered through injection. Other products in this class, such as Ketorolac and Meloxicam, are not approved for use in children, as the safety and efficacy of those drugs have not been established for pediatric patients. Acetaminophen injection is not approved for treating pain in children less than two years of age, as the safety and efficacy of that drug has not been established for treating pain in those newborn infants. We are thrilled to further expand the products labeling for use in patients of nearly all ages and believe the product is beginning to benefit with sales up 8% so far this year. Moving now to Sencuso, which is the only FDA-approved prescription patch for the prevention of nausea and vomiting in patients receiving certain types of chemotherapy treatment. we assumed commercial responsibility for the product in the United States, including its marketing, promotion, distribution, manufacturing, and medical support activities, early last year, and as of September 2023, have fully completed the transition of Sancuso to Cumberland. As we previously reported, the FDA approved moving the product's manufacturer to a new facility and the production of supplies for Cumberland at this plant is now underway. Sancuso sales are significantly lower than those we experienced last year due to an inordinate amount of sales deductions. We are working to improve that performance and are also now supporting the brand through our expanded oncology sales division, which is comprised of both field-based and inside sales personnel. As we've reported previously, the packager for our Ameclomox pack brand suspended their operations due to supply issues. That facility is now under new ownership and new management, and we're currently awaiting availability of a potential supply from their operations. We're also exploring other alternatives to restart the product's packaging. Demand for our Vaprosol product increased during the pandemic, and we work to support the expanded use of the product in hospitals and clinics during that healthcare crisis. We then shipped all remaining inventory of the product and notified the FDA that supplies of the product were not currently available. As AJ mentioned, we have since transferred the products manufacturing to a new facility. Our new manufacturing partner is working with the FDA to address several Form 483 and warning letter issues in a timely manner. Meanwhile, we're planning to provide interim supplies of a special compounded conovaptin product to the market in support of critically ill patients. The companies will share in the sales of this interim compounded product, which is expected to be available in the coming months. We then expect to file for the approval to manufacture branded Vaprosol once all FDA issues at this new site are resolved. That completes my updates for today, and I'll turn it back over to you, AJ.

Thank you, Todd. Before we turn to the financial report, I'd like to provide an update on our ongoing clinical pipeline. Throughout the third quarter, we continue to progress our Phase II clinical trials, evaluating ifitroban, a potent and selective thromboxane receptor antagonist for patients with a series of unmet medical needs. It has now been dosed in nearly 1,400 subjects and is found to be safe and well-tolerated in those individuals. Patient enrollment is well underway in two company-sponsored Phase II clinical programs. One is evaluating ifitroban in systemic sclerosis or scleroderma. It's a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs. Enrollment in that study is well underway. The other ongoing clinical program involves the cardiomyopathy associated with Duchenne muscular dystrophy, or DMD. It's a rare and fatal genetic neuromuscular disease that results in deterioration of the skeletal, heart, and lung muscles. We're sponsoring the FIGHT-DMD trial, a multicenter, randomized, placebo-controlled Phase II study enrolling patients across 10 centers in the United States that specialize in DMD. We have completed enrollment in the younger age group of patients, and now are working to finish enrollment in the older patient group with DMD. Meanwhile, earlier this year, we announced that the FDA cleared the investigational new drug application for a phase two study in patients with idiopathic pulmonary fibrosis, or IPF. It's the most common form of progressive fibrosing interstitial lung disease, and as a result, we're in the process of initiating our Fighting Fibrosis Trial, designed to enroll 128 patients in over 20 medical centers of excellence across the U.S. Recent studies have shown ifitriban can both prevent and enhance resolution of lung fibrosis in multiple preclinical models. In addition to these sponsored studies, there are several other preclinical and pilot patient studies at iFitraband underway, including several investigator-initiated trials. Our plan going forward is to complete each of our company-sponsored studies, analyze the resulting data, announce the top-line results, and then decide on the best development path for the registration of ifitriban. And we continue to believe it has the potential to benefit many patients with orphan diseases that represent unmet medical needs. So, with that update on our ongoing clinical trials, I'd now like to turn it over to our Chief Financial Officer, John Hamm, to review our third quarter financial results. John?

Thank you, AJ. For the three months ended September 30th, 2023, net revenue from continuing operations were $10.1 million. Net revenue by product for the third quarter of 2023 included $3.9 million for Crystallose, $2.8 million for Vibatav, $1.9 million for Increaso, and $1.2 million for Caldolor. Total year-to-date net revenue were $30.2 million, including $12.3 million for Crystalos, $6.8 million for Vibative, $5.7 million for Sancuso, and $3.3 million for Caldolor. Each of these brands has experienced growth in sales this year, with the exception of Sancuso. Unfortunately, the brand has seen sales deductions associated with the product's transition. We are working to address these issues and believe over time Sancuso's performance will improve, and therefore it's best evaluated on an annual basis. Turning to our expenditures, total operating expenses for the third quarter were $12 million, slightly more than the $11.7 million, for the prior year period. Year-to-date expenses totaled $33.6 million. Net loss for the third quarter was $1 million and when the non-cash expenses are added back, the resulting adjusted earnings were $260,000 or two cents a share. The year-to-date adjusted earnings were $4.2 million or 29 cents a share. Both net income and adjusted earnings have improved significantly over the last year. Also, please note that the adjusted earnings calculations do not include the additional benefit of the $0.8 million cost of goods for Vybatov and Sancuso during the quarter. Year to date, the benefit is $1.7 million. That inventory was received as part of each product's acquisition. The total cash flow from operations was $5.1 million. As a reminder, the additions of Vibatav and Sancuso to our product portfolio have continued to significantly impact our financial statements. As a result of the Vibatav 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 financial terms for the Vybatov 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. Vybatov was our largest acquisition, and I am pleased to report that since we assumed responsibility for the product in late 2018, it has delivered a total cash contribution of $37.2 million to our business and therefore is now generating a return on our $25 million investment. 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 these assets was $13.6 million at the end of the third quarter. We provided $13.5 million at closing for the Sancuso acquisition. There are also royalties that we pay based on the brand sales. Since we started shipping Sancuso in early 2022, the product has already provided a total cash contribution of approximately $12.2 million, and we believe it will soon begin to generate a return on our $14.5 million investment. Turning to our balance sheet as of September 30, 2023, we had $88 million in total assets, including $18.5 million in cash and cash equivalents. Liabilities totaled $52 million, and total shareholders' equity was $36 million. On September 5th, 2023, we entered into a new revolving credit loan agreement with Pinnacle Bank for a three-year term. The agreement provides for an aggregate principal funding amount of up to $25 million. It provides an initial revolving credit line with $20 million of availability and the ability of Cumberland to increase the amount to $25 million under certain conditions. The interest rate is based on benchmark term SOFR and is subject to one financial covenant determined on a quarterly basis. Also, during the third quarter of 2023, we continued our share repurchase program, buying a total of 117,000 shares. These repurchases included those on the open market, as well as those needed to fund the taxes associated with employee vested restricted shares. We are also continuing the process of implementing new trading plans for our board members who will purchase Cumberland shares over the remainder of 2023 to increase their holdings in the company. Cumberland continues to hold over $53 million in tax net operating loss carry-forwards, primarily resulting from the prior exercise of stock options. And that completes our financial report for the third quarter of 2023.

Back to you, AJ. Thank you, John. Overall, Cumberland has had a successful year to date, and we are encouraged by our progress. It's been particularly good to see the recent growth in our Crystallose and Caldolor business, along with the rebound in Vibative sales. And we're pleased to share the recent pediatric studies involving favorable results with both Vibative and Caldolor in children. We're also optimistic about the opportunity with our new manufacturing partner to provide initial supplies of compounded Vaprazole to help critically ill patients, and we're excited about the expansion of our oncology sales division and opportunity to further help cancer patients. It's good to be on the New York State Medicaid formulary for Crystalose, and we believe that the special reimbursement associated with the No Pain Act can have a meaningful impact on Caldor's future growth. As we move into the remainder of the year, we remain committed to our strategy seeking to maximize the potential of our commercial brands, progressing our pipeline, and also pursuing select acquisitions. As always, I'd like to extend a special thanks to the entire Cumberland team for their dedication and many fine contributions as we continue in our mission of working together to provide unique products that improve the quality of patient care. So with that, let's open the call to any questions. Operator, please proceed.

Thank you, sir. Ladies and gentlemen, that concludes the company's presentation, and we will now open the call for any questions. If you'd like to ask a question, please press star key on your phone, followed by the digit one twice. That's star one one. Please stand by.

Well, thank you everyone for joining today's call. We do understand that many of you prefer a private discussion with management, and if so, please just 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 your interest in Cumberland, and we'll look forward to providing another update in the coming months.

Thank you, sir. 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. Music Playing Bye. Thank you. Good afternoon and welcome to Cumberland Pharmaceuticals' third quarter 2023 company update and financial report. This call is being recorded at Cumberland's request and will be archived on the company's website for one year from today's date. I would now like to turn it over to Molly Agus, Account Supervisor at the Dalton Agency, who handles Cumberland's communications. Molly, please go ahead.

Hello, everyone. Good afternoon. Thanks for joining today's call. Earlier today, Cumberland issued a press release announcing the company's financial results with an operational update for the third quarter ending September 30, 2023. The release, which includes the related financial tables, can be found on the company's website at www.cumberlandpharma.com. During today's call, management will share an overview of those financial results. They'll also provide an overall company update, including a discussion of its brand, pipeline, and partners. Participating in today's call are A.J. Kazemi, Cumberland's Chief Executive Officer, Todd Anthony, Vice President, Organizational Development, and John Hamm, Chief Financial Officer. Please keep in mind that their discussions may include 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 and uncertainties. There are many factors that could affect Cumberland's future results, including natural disasters, economic downturns, public health epidemics, international conflicts, 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. 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 the links to those sites can be found on the corporate website at www.cumberlandpharma.com. The company will also provide 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 that was issued earlier today. 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's also prepared to hold a follow-up conversation after the call if that's your preference. So with that overview, I'll turn the call over to Cumberland's Chief Executive Officer, A.J. Kazemi.

Thank you, Molly, and good afternoon, everyone. I do have a slight cough today, so please bear with me. We appreciate your taking the time to join us today as we share how the year is going. As Molly mentioned, During today's call, we'll provide both a company update as well as a review of our financial results for the third quarter of 2023. I'd like to start by mentioning that we've recently refined our mission statement to better capture the spirit of what we endeavor to do here each day at Cumberland. It now reads as follows, working together to provide unique products that improve the quality of patient care. In designing this statement, we took into account several factors. First, we wanted a mission that's designed to address the constituents we serve, which include the patients in need of care, healthcare providers, our employees, our shareholders, our partners, and our community. We also wanted 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, it emphasizes that the patient is at the core of everything we do. Our collective efforts are directed at providing better alternatives for poorly met medical needs. Our hope is that everyone across our organization will embrace our newly refined mission statement and use it not only as an inspiration, but also as a guide in supporting the achievement of our goals. Our strategy for fulfilling this mission is to build a portfolio of specialty pharmaceutical brands. I'm touching on a few. Our Sancuso patch is the only FDA-approved prescription patch for the prevention of certain side effects in oncology patients receiving chemotherapy treatment. Caldolors, the only injectable therapy approved in the U.S. for the treatment of both pain and fever in a wide range of patients. That includes children, adults, and now newborns. And Crystallose is the only branded prescription laxative that combines the established safety and efficacy of lactulose with the convenience and portability of a pre-measured dose. So now as we reflect on the progress we've made throughout 2023, we are pleased to share a number of exciting updates and growth opportunities for our product portfolio. For example, we continue to work with our partners in their efforts to register and launch Vibative in several international markets, which should provide significant future catalysts for the brand. Tabuk Pharmaceuticals has updated Vibative's approval in Saudi Arabia with new manufacturing information as they plan to introduce the product into the Middle East. DB Farm, our partner in South Korea, who also distributes Caldolor, is awaiting the approval of Vibative in their country. and Skyclone Pharmaceuticals, our vibative partner for the Chinese market, has continued to respond to regulatory inquiries as they seek approval in their country. We now await the approval of these three initiatives and look forward to the launch of our product in those markets. We recently announced the publication of positive results from a clinical study investigating the safety and pharmacokinetics of our Cowdelure product in newborns, which supported the brand's FDA approval in infants of three to six months of age. And we're thrilled to further expand Cowdelure's labeling to the youngest of patients. We expect Caldelore will be eligible for special Medicare reimbursement under the new no-paying legislation. The act is scheduled to go into effect in early 2025, and we expect CMS to next issue regulations for implementing the act and the amount of the separate reimbursement. Meanwhile, we've completed the expansion of our oncology sales division as we work to expand the use of our newest brand, Sancuso, to help cancer patients tolerate their chemotherapy treatments. Our largest selling brand, Crystalose, is now beginning to benefit from its listing on the New York State Medicaid formulary, and we're glad to share today that we have now successfully transferred the manufacturing of our Vaprizol product to a new facility. Following that successful production of the first batches, we're now planning to provide supplies of a special compounded Conevapton product on an interim basis to the market starting at the end of this year. We then expect to file for the approval of Vaprasol at the new plant in order to then relaunch the branded version of the product in the future. Turning next to some highlights on our financial performance, During the third quarter, our product portfolio of FDA-approved brands delivered combined revenues of $10.1 million, and year-to-date revenues totaled $30.2 million. Adjusted earnings for the quarter were $260,000, or two cents a share, and the year-to-date adjusted earnings were totaled $4.2 million, or 29 cents a share. Also, I'm pleased to report that cash flow from operations this year has totaled $5.1 million. We ended the third quarter with $88 million in total assets, $52 million in liabilities, and $36 million in shareholders' equity. Additionally, I'm very pleased to report that we entered into a new revolving credit loan agreement for a $20 million facility expandable to $25 million with a three-year term. So with that overview, now I'd like to turn to Todd Anthony, Cumberland's Vice President, Organizational Development, to further discuss our brands. Todd?

Thank you, AJ. Regarding our Vibative product, in October we announced a new publication in the journal Antimicrobial Agents and Chemotherapy, detailing the results of the first clinical study investigating the safety and pharmacokinetics of our Vibative injection in children 2 to 17 years of age. The results of this study suggest that a single dose of Vibative can be safely administered to children to fight certain serious skin and lung infections in those patients. Vibative 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. Antimicrobial resistance poses a significant challenge in the treatment of bacterial infections, necessitating the development of new antibiotic therapies. We are pleased to see that Vibative sales continue to improve and are up 13% year to date as we have a number of new initiatives underway to improve the brand's performance. Turning next to Crystallose, our prescription strength laxative packaged in a convenient pre-measured powder dose that dissolves quickly in just four ounces of water for a clear, taste-free, and grit-free solution. It continues to be our largest selling product and is benefiting nicely from the support of our two co-promotion partners, with this year's sales up 8% over the prior year period. Additionally, we found that the brand performs best in states where we have Medicaid coverage. New York State recently added Crystalose to its Medicaid formulary, and we are implementing a special initiative to increase our presence and our share of voice in that state. We believe that this new coverage is contributing to the growth of the product. As AJ mentioned, we believe Calvelor, our non-opioid analgesic injection product, will be eligible for special Medicare reimbursement under the new Non-Opioids Prevent Addiction in the Nation, or Nopain, legislation, which was enacted as part of the Consolidated Appropriations Act of 2023. The Nopain Act requires Medicare to provide separate and more favorable reimbursement for non-opioid products that are used to manage pain during surgeries conducted in hospital outpatient departments or ambulatory surgical centers. This legislation applies to products that are indicated to provide analgesia without acting upon the body's opioid receptors. As a result, we believe that the No Pain Act will affect Medicare reimbursement for Caldolor In the Medicare Hospital Outpatient Prospective Payment System proposed rule, the CMS requested that manufacturers with potentially applicable non-opioid products submit comments in supporting clinical evidence regarding products that should be eligible for separate payment. We submitted a comment letter along with the requisite clinical information to the CMS in September of 2023, explaining why CalValor should be included and separately reimbursed. The Act is scheduled to go into effect in early 2025 and will apply to those products that are furnished between January 1st, 2025 and January 1st, 2028. Also, with the newly approved labeling, AJ noted, Calvulor is now the only non-opioid product approved to treat pain in infants that's delivered through injection. Other products in this class such as Ketorolac and Meloxicam are not approved for use in children as the safety and efficacy of those drugs have not been established for pediatric patients. Acetaminophen injection is not approved for treating pain in children less than two years of age as the safety and efficacy of that drug has not been established for treating pain in those newborn infants. We are thrilled to further expand the products labeling for use in patients of nearly all ages and believe the product is beginning to benefit, with sales up 8% so far this year. Moving now to Sencuso, which is the only FDA-approved prescription patch for the prevention of nausea and vomiting in patients receiving certain types of chemotherapy treatment. We assumed commercial responsibility for the product in the United States, including its marketing, promotion, distribution, manufacturing, and medical support activities. early last year and as of September 2023 have fully completed the transition of Sancuso to Cumberland. As we previously reported, the FDA approved moving the products manufacturer to a new facility and the production of supplies for Cumberland at this plant is now underway. Sancuso sales are significantly lower than those we experienced last year due to an inordinate amount of sales deductions. We are working to improve that performance and are also now supporting the brand through our expanded oncology sales division, which is comprised of both field-based and inside sales personnel. As we reported previously, the packager for our Omeclomox pack brand suspended their operations due to supply issues. That facility is now under new ownership. and new management, and we're currently awaiting availability of a potential supply from their operations. We are also exploring other alternatives to restart the product's packaging. Demand for our Vaprosol product increased during the pandemic, and we worked to support the expanded use of the product in hospitals and clinics during that healthcare crisis. We then shipped all remaining inventory of the product and notified the FDA that supplies of the product were not currently available. As AJ mentioned, we have since transferred the products manufacturing to a new facility. Our new manufacturing partner is working with the FDA to address several form 483 and warning letter issues in a timely manner. Meanwhile, we're planning to provide interim supplies of a special compounded conovaptin product to the market in support of critically ill patients. The companies will share in the sales of this interim compounded product, which is expected to be available in the coming months. We then expect to file for the approval to manufacture branded Vaprosol once all FDA issues at this new site are resolved. That completes my updates for today, and I'll turn it back over to you, AJ.

Thank you, Todd. Before we turn to the financial report, I'd like to provide an update on our ongoing clinical pipeline. Throughout the third quarter, we continue to progress our Phase II clinical trials, evaluating ifitroban, a potent and selective thromboxane receptor antagonist for patients with a series of unmet medical needs. It has now been dosed in nearly 1,400 subjects and is found to be safe and well-tolerated in those individuals. Patient enrollment is well underway in two company-sponsored Phase II clinical programs. One is evaluating ifitroban in systemic sclerosis, or scleroderma. It's a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs. Enrollment in that study is well underway. The other ongoing clinical program involves the cardiomyopathy associated with Duchenne muscular dystrophy, or DMD. It's a rare and fatal genetic neuromuscular disease that results in deterioration of the skeletal, heart, and lung muscles. We're sponsoring the Fight DMD trial, a multi-center, randomized, placebo-controlled phase two study enrolling patients across 10 centers in the United States that specialize in DMD. We have completed enrollment in the younger age group of patients, and now are working to finish enrollment in the older patient group with DMD. Meanwhile, earlier this year, we announced that the FDA cleared the investigational new drug application for a Phase II study in patients with idiopathic pulmonary fibrosis, or IPF. It's the most common form of progressive fibrosing interstitial lung disease, and as a result, we're in the process of initiating our Fighting Fibrosis Trial designed to enroll 128 patients in over 20 medical centers of excellence across the U.S. Recent studies have shown ifitriban can both prevent and enhance resolution of lung fibrosis in multiple preclinical models. In addition to these sponsored studies, there are several other preclinical and pilot patient studies of iFitraBand underway, including several investigator-initiated trials. Our plan going forward is to complete each of our company-sponsored studies, analyze the resulting data, announce the topline results, and then decide on the best development path for the registration of ifitriban. And we continue to believe it has the potential to benefit many patients with orphan diseases that represent unmet medical needs. So with that update on our ongoing clinical trials, I'd now like to turn it over to our Chief Financial Officer, John Hamm, to review our third quarter financial results. John?

Thank you, AJ. For the three months ended September 30th, 2023, net revenue from continuing operations were $10.1 million. Net revenue by product for the third quarter of 2023 included $3.9 million for Crystalos, $2.8 million for Vibato, $1.9 million and $1.2 million for Caldolor. Total year-to-date net revenue were $30.2 million, including $12.3 million for Crystalos, $6.8 million for Vibative, $5.7 million for Sancuso, and $3.3 million for Caldolor. Each of these brands has experienced growth in sales this year, with the exception of Sancuso. Unfortunately, the brand has seen sales deductions associated with the product's transition. We are working to address these issues and believe over time Sancuso's performance will improve and therefore it's best evaluated on an annual basis. Turning to our expenditures, total operating expenses for the third quarter were $12 million, slightly more than the $11.7 million. for the prior year period. Year-to-date expenses totaled $33.6 million. Net loss for the third quarter was $1 million and when the non-cash expenses are added back, the resulting adjusted earnings were $260,000 or two cents a share. The year-to-date adjusted earnings were $4.2 million or 29 cents a share. Both net income and adjusted earnings have improved significantly over the last year. Also, please note that the adjusted earnings calculations do not include the additional benefit of the $0.8 million cost of goods for Vybatov and Sancuso during the quarter. Year to date, the benefit is $1.7 million. That inventory was received as part of each product's acquisition. The total cash flow from operations was $5.1 million. As a reminder, the additions of Vibatav and Sancuso to our product portfolio have continued to significantly impact our financial statements. As a result of the Vibatav 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 financial terms for the Vybatov 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. Vybatov was our largest acquisition and I'm pleased to report that since we assumed responsibility for the product in late 2018, it has delivered a total cash contribution of $37.2 million to our business and therefore is now generating a return on our $25 million investment. 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 these assets was $13.6 million at the end of the third quarter. We provided $13.5 million at closing for the Sancuso acquisition. There are also royalties that we pay based on the brand sales. Since we started shipping Sancuso in early 2022, the product has already provided a total cash contribution of approximately $12.2 million, and we believe it will soon begin to generate a return on our $14.5 million investment. Turning to our balance sheet as of September 30, 2023, we had $88 million in total assets, including $18.5 million in cash and cash equivalents. Liabilities totaled $52 million, and total shareholders' equity was $36 million. On September 5th, 2023, we entered into a new revolving credit loan agreement with Pinnacle Bank for a three-year term. The agreement provides for an aggregate principal funding amount of up to $25 million. It provides an initial revolving credit line with $20 million of availability and the ability of Cumberland to increase the amount to $25 million under certain conditions. The interest rate is based on benchmark term SOFR and is subject to one financial covenant determined on a quarterly basis. Also, during the third quarter of 2023, we continued our share repurchase program, buying a total of 117,000 shares. These repurchases included those on the open market, as well as those needed to fund the taxes associated with employee vested restricted shares. We are also continuing the process of implementing new trading plans for our board members who will purchase Cumberland shares over the remainder of 2023 to increase their holdings in the company. Cumberland continues to hold over $53 million in tax net operating loss carry-forwards, primarily resulting from the prior exercise of stock options. And that completes our financial report for the third quarter of 2023. Back to you, AJ.

Thank you, John. Overall, Cumberland has had a successful year to date, and we are encouraged by our progress. It's been particularly good to see the recent growth in our Crystallose and Caldolor business, along with the rebound in Vibative sales. And we're pleased to share the recent pediatric studies involving favorable results with both Vibative and Caldolor in children. We're also optimistic about the opportunity with our new manufacturing partner to provide initial supplies of compounded Vaprazole to help critically ill patients, and we're excited about the expansion of our oncology sales division and opportunity to further help cancer patients. It's good to be on the New York State Medicaid formulary for Crystalose, and we believe that the special reimbursement associated with the No Pain Act can have a meaningful impact on Caldor's future growth. As we move into the remainder of the year, we remain committed to our strategy seeking to maximize the potential of our commercial brands, progressing our pipeline, and also pursuing select acquisitions. As always, I'd like to extend a special thanks to the entire Cumberland team for their dedication and many fine contributions as we continue in our mission of working together to provide unique products that improve the quality of patient care. So with that, let's open the call to any questions. Operator, please proceed.

Thank you, sir. Ladies and gentlemen, that concludes the company's presentation, and we will now open the call for any questions. If you'd like to ask a question, please press star key on your phone, followed by the digit one twice. That's star one one. Please stand by.

Well, thank you everyone for joining today's call. We do understand that many of you prefer a private discussion with management, and if so, please just 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 your interest in Cumberland, and we'll look forward to providing another update in the coming months.

Thank you, sir. 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.