Cumberland Pharmaceuticals Inc.

Good afternoon and welcome to Cumberland Pharmaceuticals' third 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 one year from today's date. I would now like to turn it over to Emily Kent from the Dalton Agency who handles Cumberland's communications. Emily, please proceed.

Hello everyone and thank you for joining us today. This afternoon, Cumberland issued a press release announcing its third 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. During today's call, management will share an overview of those financial results. They'll also provide an overall company update, including recent developments along with a discussion of Cumberland's brands, pipeline, and partners. Participating in today's call are AJ Kazemi, 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, international conflicts, trade restrictions, public health epidemics and others that are beyond the company's control. Those issues are described under the caption risk factors in Cumberland's annual report on Form 10-K and any subsequent 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 website, and you can find the links to those sites on the corporate site 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 noted earlier. 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. Kazemi.

Thank you, Emily. Good afternoon, everyone. We appreciate your joining us today. As Emily mentioned during the call, we'll provide a review of our financial results for the third quarter this year, and we'll also cover key operational developments that occurred during that period. In addition, we'll discuss several recent updates that continue to underscore our optimism about the company's future. So let's get started. Today, I'm very pleased to announce a new addition to our commercial product portfolio. We've entered into arrangements with Redhill Biopharma to jointly commercialize Telicia, which is an FDA-approved and leading treatment for Helicobacter pylori infections. Provided in a single capsule that contains Omeprazole, Amoxicillin, and Rifabutin, Telicia is now recommended as a first-line therapy for H. pylori infections in the American College of Gastroenterology's clinical guidelines. The product is patent protected through 2042 and also received eight years of U.S. market exclusivity under its qualified infectious disease product designation. We believe Telicia is an excellent strategic fit for our company. It was FDA approved based on two large successful clinical studies And it features an outstanding profile with three key advantages, a high eradication rate exceeding 90%, the convenience of an all-in-one capsule containing three medicines, and minimal antibiotic resistance. We formed a new company with Redhill called Tilesia Holdings, Inc. and Redhill has contributed the worldwide rights to Tilesia as well as the product assets to the new company. Cumberland will invest $2 million this year and $2 million next to participate in the new company's joint ownership. Through a joint commercialization agreement, we'll assume responsibility for the distribution and sale of Tilesia in the U.S. and will equally share Tilesia's net revenues. In 2024, net sales of Tilesia totaled $8 million. Cumberland will also assume responsibility for product promotion through our field sales division, which currently details Crystalos, another gastroenterology product, and will provide an annual investment of up to $2 million to cover certain distribution, marketing, and sales costs associated with the brand. Meanwhile, during the third quarter, We announced international developments, including the launch of our Vibative product in Saudi Arabia. The launch follows an agreement with Tabuk Pharmaceutical Manufacturing Company to introduce Vibative into the Middle East. Tabuk had obtained the final approvals needed to commercialize Vibative in Saudi Arabia and we're pleased the product is now available for patients in that market. In October, we announced the regulatory approval of our ibuprofen injection product in Mexico. We worked to secure that approval through our partnership with Pisa Pharmaceutical, a well-established Mexican pharma firm. Under the terms of the agreement, Pisa is responsible for both the registration and commercialization of the product in their country, while we provide regulatory support and the product supply. Additionally, we previously shared that our antibiotic Vybattiv received approval from the regulatory authorities in China earlier this year. That milestone provides us with access to the world's second largest pharma market, and we're now preparing to support the launch of Vybattiv there. Here in the U.S., we announced the availability of our Vybattiv four-vial starter pack through a new supply arrangement with Vizient, making it accessible to their health care members nationwide. And we also announced that Vibatab was added to a national purchasing agreement with Premier, Inc. Meanwhile, we've continued to progress our Phase II clinical programs, evaluating our Ifitroban product candidate in patients with Duchenne muscular dystrophy, systemic sclerosis, and an idiopathic pulmonary fibrosis. Returning to the third quarter financial results, our portfolio of FDA-approved brands delivered combined revenues of $8.3 million during the quarter. Year-to-date revenues for the first nine months of the year totaled $30.9 million. While third quarter sales were impacted by a delay in some Crystalos and Caldolor shipments, our year-to-date revenue has grown 12% over the same period last year. Furthermore, as a reminder, the fourth quarter is often our strongest, as customers tend to increase their product purchases towards the end of the year, and therefore we continue to believe our financial performance is best evaluated on an annual basis. The adjusted loss for the third quarter was $0.8 million, or $0.06 a share, and our year-to-date adjusted earnings were $1.9 million, or $0.13 a share. In addition, our business continued to generate positive cash flow from operations, which increased to nearly $5 million this year through September. At the end of the third quarter, we held $66 million in total assets, including $15 million in cash. Liabilities totaled $40 million, and shareholders' equity was $26 million at the end of the third quarter. And please note that our total debt has been reduced by $10 million since the end of 2024. With those developments in overview, I'd now like to turn to Todd Anthony, Cumberland's Vice President, Organizational Development, to further discuss both our brands and our sales organization.

Todd? Well, thank you, AJ. I'll start by sharing an update on each of our major brands. Vibative 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 multi-drug resistant. Unlike many antibiotics that are losing the battle to fight bacteria, Vibative's unique dual method of action was specifically designed to address these drug resistant bacteria. We therefore believe it has life saving potential to help many patients amid this growing antibiotic resistance crisis, which faces a very fragile pipeline of new antibiotic development. Recall that to reinforce the message, we are conducting a series of infectious insights. These are discussions with infectious disease experts that we are disseminating across the country. These video vignettes share the opportunity to use Vibative as a solution for select patient types where other products have failed. In June, a comprehensive new pharmacokinetic analysis of Vibative was published in 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 Vibative's critical role in treating life-threatening gram-positive infections. We recently announced the availability of the Vibative 4-Vial Starter Pack through a new supply arrangement with Vizient, making it accessible to their healthcare members nationwide. As the country's largest provider-driven healthcare performance improvement company, Vizient serves more than 65% of the nation's acute care providers, including 97% of our country's academic medical centers. Through this agreement, Vizient members now have access to Vibative's new four-vial configuration, which supports flexible treatment initiation in both inpatient and outpatient settings, again, for this potentially life-saving therapy. Vibative was also added to a national group purchasing agreement with Premier Incorporated, an alliance of approximately 4,350 US hospitals designed to drive transformation across the healthcare system. The product's addition provides Premier's members with a cost-effective solution to treat resistant gram positive infections. Moving next to Crystallose, which is our prescription strength laxative provided in a convenient pre-measured powder dose that dissolves quickly in just four ounces of water resulting in a clear, taste-free, and grit-free solution. While our field sales division has been able to generate prescriptions of Crystalose through their promotional efforts, we have always faced substitution by pharmacies in favor of generic alternatives. That substitution has increased this year with the arrival of additional generic competition. We have taken appropriate action and are now implementing strategies to protect and grow our business. Let's shift now to Caldolor, our intravenous ibuprofen product. With its new pediatric labeling cleared with the FDA, Caldolor is now the only non-opioid product approved to treat pain in infants that's delivered by injection. As a reminder, we are featuring Calvalor through sales and marketing initiatives, highlighting this new indication, resulting in growing use of the product in our country's children's hospitals. We previously announced the publication of our study investigating Calvalor in clinical therapeutics, demonstrating the product's safety and efficacy for managing postoperative pain in patients 60 years of age and older. This analysis, encompassing over 1,000 patients from our comprehensive post-surgical studies, represents the first such evaluation in this vulnerable population, where traditional pain management options, such as opioids, carry increased risk. Turning to Sencuso, our transdermal patch, FDA approved for the management of chemotherapy-induced nausea and vomiting. We continue to see favorable sales results following the expansion of our oncology sales force. We have also launched a new Sancusa website along with promotional marketing resources and digital marketing campaigns to further support awareness and access to this product. Recall our Vaprosol product is the only intravenously administered vasopressin receptor antagonist It's used to raise serum sodium levels in hospitalized patients with hyponatremia, which is the most common electrolyte disorder among these patients. Our new manufacturing and distribution partner for Vaprosol has successfully begun producing the product in their facility and are now awaiting FDA's GMP certification for this site. Once they receive regulatory clearance, we will file for approval to manufacture branded Vaprosol there. Well, that completes my updates for today, and so I'll turn it back to you, AJ.

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 Afitraban product candidate, which is a potent and selective thromboxane receptor antagonist, is being evaluated in several clinical programs for patients with a series of unmet medical needs. Ifitraban'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. Earlier this year, we announced positive top-line results from our FITE DMD trial. The study evaluated Ifitraban as a therapy for Duchenne muscular dystrophy and its heart disease, which is the leading cause of death in DMD patients. The study and its results mark a breakthrough for these patients, as it's the first successful study specifically targeting the cardiac complications of their disease. The trial enrolled 41 DMD patients who received either a low dose of ifitriban, a high dose of ifitriban, or a placebo. The study's primary efficacy endpoint was an improvement in the heart's left ventricular injection fraction, or LVEF. And key findings associated with the patient's LVEF included high dose ifitriban treatment resulted in an overall 3.3% improvement. And the high-dose ifitropan showed an increase of 1.8%, while the placebo group showed the expected decline of 1.5%. And when those are combined, you get the 3.3% overall improvement I mentioned. Now, when compared with propensity-matched natural history controls, the difference was even more pronounced. with the high-dose treatment providing a significant 5.4% overall improvement as the control patients experienced a 3.6% decline. And both doses of ifitriban were well-tolerated with no serious drug-related events. These top-line fight DMD study findings were selected for a late-breaking presentation at the Muscular Dystrophies Association Clinical and Scientific Conference in March and were then presented at the Parent Project Muscular Dystrophy Annual Conference in June. We completed the comprehensive analysis of the study results. We prepared our clinical study report and then we submitted it to the FDA along with a request for an end of phase two meeting. We held that meeting in September And we began interaction with the FDA to determine the remaining development requirements. The FDA recommended a follow-on meeting, which we are now planning is the next step in that process. Meanwhile, we've been evaluating our FIT or BAD product candidate in a clinical program in patients with systemic sclerosis or scleroderma. Enrollment in the study was completed this year, and we've been monitoring the clinical study sites in preparation to lock the database and begin evaluating the study results. And we look forward to announcing those findings from this study. In addition, we have a Phase II clinical study, the Fighting Fibrosis Trial, underway in patients with idiopathic pulmonary fibrosis, the most common form of progressive fibrosing in a special lung disease. Patient enrollment in that study is moving rapidly. It's well underway in medical centers across the country. The study design includes both an interim safety analysis as well as an interim efficacy analysis, and we'll look forward to reporting on both of those findings. Additional pilot studies of iFiture BAN are also underway through several investigator-initiated trials. And following completion of our ongoing studies and with the FDA feedback, we'll then determine the optimal regulatory pathway for development of a Fitcher band, our first new chemical entity. So with that update on our clinical activities, 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, A.J. For the three months ending September 30th, 2025, net revenue from continuing operations was $8.3 million. Revenue for the first nine months of the year totaled $30.9 million. Net revenue by product for the third quarter of 2025 included a $1.2 million for Crystalos, $3.2 million for Sancuso, $2.6 million for Vibatav, and $0.9 million for Caldolor. Year-to-date product revenues totaled $7.4 million for Crystalos, $8.6 million for Sancuso, $6.7 million for Vybatov, and $3.8 million for Caldolor. Turning to our expenditures, total operating expenses for the third quarter were $10.3 million. Year-to-date expenses totaled $32.3 million. The net loss for the quarter was $1.9 million. Year-to-date net income loss was $1.4 million, and when non-cash expenses are added back, the resultant adjusting earnings for the first nine months of 2025 were $1.9 million, or 13 cents a share. Cash flow from operations during 2025 was $5 million. Also, please note, that the adjusted earnings calculations do not include the additional benefit of the $.1 million of Vibatav cost of goods during the third quarter. Those goods were received as part of the product's acquisition. We're pleased to see that the additions of Vibatav and Sancuso to our portfolio continue to positively impact our financial performance. 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 estimated value for those assets was $10 million at the end of the third quarter. The financial terms for the Vibato 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 $15 million of intangibles. The estimated value of those assets was $9.5 million at the end of the third quarter. We provided $13.5 million at closing for the Sancuso acquisition, and we paid $1.5 million in milestone payments. There are ongoing royalties that we pay based on the brand sales. Turning to our balance sheet as of September 30, 2025, we had $66 million in total assets, including $15.2 million in cash and cash equivalents. Liabilities totaled $40 million, including $5 million on our credit facility. Total shareholders' equity was $26 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 terms so far and is subject to a financial covenant determined on a quarterly basis. And we were in compliance at the end of the third quarter. We are also continuing the process of implementing new trading plans for our board members who are purchasing Cumberland shares throughout the year to increase their holdings in the company. Lastly, I'd like to note that 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 2025. Back to you, A.J.

Thank you, John. Well, overall, it's been a successful year to date, and we're encouraged by our progress. The addition of a new product marks an exciting next phase of growth for our company. We remain dedicated to our mission of working together to provide unique products that improve the quality of patient care. And we pursued our mission by building a portfolio of FDA-approved brands with outstanding safety and efficacy profiles that can make a difference in patients' lives. We continue to support our product portfolio through our three dedicated sales divisions, each focused on strategic segments of the healthcare market. And we're encouraged by the progress of our fitter band clinical programs 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 select product additions. 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. And we look forward to providing updates on further developments as the year progresses. Now, 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 the star key on your phone, followed by the digit 1 twice. That's star 1-1. Please stand by.

Well, if there are no questions, I'd just like to thank everybody for joining us for today's call. We understand that many of our shareholders prefer a private discussion with management, and if so, please just reach out, and we'll be happy to get a call scheduled with you and hold such a discussion. As always, we appreciate your time and interest in our company and look forward to providing updates 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 now like to thank you for your participation. You may now disconnect.