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What changed in CUMBERLAND PHARMACEUTICALS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CUMBERLAND PHARMACEUTICALS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+390 added−407 removedSource: 10-K (2024-03-13) vs 10-K (2023-03-13)

Top changes in CUMBERLAND PHARMACEUTICALS INC's 2023 10-K

390 paragraphs added · 407 removed · 296 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

177 edited+50 added−79 removed132 unchanged
Biggest changeSuch factors include, but are not limited to: • The possible or assumed future results of operations, including the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; • Changes in national or regional economic conditions, including changes in interest rates and the availability and the cost of capital to us; • The impact of a pandemic, epidemic or outbreak of a contagious disease, such as the novel coronavirus (COVID-19) pandemic, including any recurrence of the COVID-19 pandemic, the impact on our employees, the extent of the impact on overall demand for our key products and the impact on our suppliers, including any disruptions and inefficiencies in the supply chain for our products; • Our competitive position and competitors, including the size and growth potential of the markets for our products and product candidates; • The success, cost and timing of our product acquisition and development activities and clinical trials; and our ability to successfully commercialize our product candidates; • Product efficacy or safety concerns, whether or not based on scientific evidence, resulting in product withdrawals, recalls, regulatory action on the part of the FDA (or international counterparts) or declining sales; • The performance of our third-party suppliers and manufacturers which impacts our supply chain and could create business shutdowns or product shortages; and the retention of key scientific and management personnel; • Challenges to our patents and the introduction of generic versions of our products and product candidates, which could negatively impact our ability to commercialize and sell our products and product candidates and decrease sales a result of market exclusivity; • Changes in reimbursement available to us, including changes in Medicare and Medicaid payment levels and availability of third-party insurance coverage and the effects of future legislation or regulations, including changes to regulatory approval of new products, licensing and patent rights, environmental protection and possible drug re-importation legislation; • Interruptions and breaches of our computer and communications systems, and those of our vendors, including computer viruses, hacking and cyber-attacks, that could impair our ability to conduct business and communicate internally and with our customers, or result in the theft of trade secrets or other misappropriation of assets, or otherwise compromise privacy of sensitive information belonging to us, our customers or other business partners; and 35 • Issuance of new or revised accounting standards by the Financial Accounting Standards Board and the Securities and Exchange Commission.
Biggest changeSuch factors include, but are not limited to: • The possible or assumed future results of operations, including the accuracy of our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; • The impact of macroeconomic conditions, including inflationary pressures, rising interest rates, general economic slowdown or a recession, changes in monetary policy, volatile market conditions, financial institution instability, as well as geopolitical instability and the ongoing conflicts outside the U.S., on our operations; • Our competitive position and competitors, including the size and growth potential of the markets for our products and product candidates; • The success, cost and timing of our product acquisition and development activities and clinical trials; and our ability to successfully commercialize our product candidates; • Product efficacy or safety concerns, whether or not based on scientific evidence, resulting in product withdrawals, recalls, regulatory action on the part of the FDA (or international counterparts) or declining sales; • The performance of our third-party suppliers and manufacturers which impacts our supply chain and could create business shutdowns or product shortages; and the retention of key scientific and management personnel; • The impact on our business, financial condition and results of operations from the effects of a pandemic or the outbreak of an infectious disease in the United States and worldwide and resulting governmental and societal responses; • Challenges to our patents and the introduction of generic versions of our products and product candidates, which could negatively impact our ability to commercialize and sell our products and product candidates and decrease sales a result of market exclusivity; • Changes in reimbursement available to us, including changes in Medicare and Medicaid payment levels and availability of third-party insurance coverage and the effects of future legislation or regulations, including changes to regulatory approval of new products, licensing and patent rights, environmental protection and possible drug re-importation legislation; • Interruptions and breaches of our computer and communications systems, and those of our vendors, including computer viruses, hacking and cyber-attacks, that could impair our ability to conduct business and communicate internally and with our customers, or result in the theft of trade secrets or other misappropriation of assets, or otherwise compromise privacy of sensitive information belonging to us, our customers or other business partners; and • Issuance of new or revised accounting standards by the Financial Accounting Standards Board and the Securities and Exchange Commission. 32 The list above contains many, but not all, of the factors that could impact our ability to achieve results described in any forward-looking statements.
Duchenne Muscular Dystrophy (“DMD”) We also initiated the clinical development of oral ifetroban under the brand name Dyscorban ® for the treatment of cardiomyopathy associated with Duchenne Muscular Dystrophy (“DMD”), a rare and fatal disease caused by a genetic defect which leads to inexorable muscle damage. Cardiomyopathy is the leading cause of death in DMD patients.
Duchenne Muscular Dystrophy (“DMD”) We also initiated the clinical development of oral ifetroban under the brand name Dyscorban ® for the treatment of cardiomyopathy associated with Duchenne Muscular Dystrophy, a rare and fatal disease caused by a genetic defect which leads to inexorable muscle damage. Cardiomyopathy is the leading cause of death in DMD patients.
It is sold by Synergy Pharmaceuticals. • Generic and branded liquid lactulose products are marketed by a number of pharmaceutical companies. • Lactitol for oral solution (brand name Pizensy), an oral, osmotic laxative indicated for the treatment of chronic idiopathic constipation and distributed by Braintree Laboratories, Inc. was recently approved by the FDA.
It is sold by Synergy Pharmaceuticals. • Generic and branded liquid lactulose products are marketed by a number of pharmaceutical companies. • Lactitol for oral solution (brand name Pizensy ® ), an oral, osmotic laxative indicated for the treatment of chronic idiopathic constipation. It is distributed by Braintree Laboratories, Inc. and was recently approved by the FDA.
The institutional review board ("IRB"), or ethics committee (outside of the U.S.), of each clinical site generally must approve the clinical trial design and patient informed consent and may also require the clinical trial at that site to be halted, either temporarily or permanently, for failure to comply with the IRB's requirements or may impose other conditions.
The institutional review board ("IRB"), or ethics committee (outside of the U.S.), of each clinical site generally must approve the clinical trial design and patient informed consent and may also impose other conditions or require the clinical trial at that site to be halted, either temporarily or permanently, for failure to comply with the IRB's requirements.
The review process and the PDUFA goal date may be extended by two months to address deficiencies, or by three months if the FDA requests or the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the submission at any time during the review clock period.
The review process and the PDUFA goal date may be extended by two months to address deficiencies, or by three months if the FDA requests or if the NDA sponsor otherwise provides additional information or clarification regarding information already provided in the submission at any time during the review clock period.
The claims of the 810 Caldolor Patent encompass methods of treating pain using intravenous ibuprofen. Following its issuance, the 810 Caldolor Patent was listed in the FDA Orange Book and is scheduled to expire in September 2029. 23 During the third quarter of 2015, we obtained four additional patents for Caldolor. On July 7, 2015, the USPTO issued U.S.
The claims of the 810 Caldolor Patent encompass methods of treating pain using intravenous ibuprofen. Following its issuance, the 810 Caldolor Patent was listed in the FDA Orange Book and is scheduled to expire in September 2029. During the third quarter of 2015, we obtained four additional patents for Caldolor. On July 7, 2015, the USPTO issued U.S.
If the FDA's evaluations of the NDA and the clinical and manufacturing procedures and facilities are favorable and meet all regulations, the FDA will issue an approval letter. Priority review is reserved for drugs that represent a “significant improvement in safety or efficacy” over existing treatments and FDA endeavors to complete these reviews in six months.
If the FDA’s evaluations of the NDA and the clinical and manufacturing procedures and facilities are favorable and meet all regulations, the FDA will issue an approval letter. Priority review is reserved for drugs that represent a “significant improvement in safety or efficacy” over existing treatments. The FDA endeavors to complete priority reviews in six months.
Product Serialization: In November of 2013, the FDA passed the Drug Supply Chain Security Act (DSCSA). The DSCSA was created to strengthen the security of the drug distribution supply chain by adding controls such as a national pharmaceutical track and trace system and establishing national standards for licensing of prescription drug wholesale distributors and third-party logistics providers.
Product Serialization: In November of 2013, the FDA passed the Drug Supply Chain Security Act (“DSCSA”). The DSCSA was created to strengthen the security of the drug distribution supply chain by adding controls such as a national pharmaceutical track and trace system and establishing national standards for licensing of prescription drug wholesale distributors and third-party logistics providers.
Caldolor & Acetadote China and Hong Kong Development Our international commercialization agreements include a license to one or more Cumberland products for a specific territory as noted in the table above. We seek partners who have the local infrastructure to support the registration and commercialization of our products in their territory.
Acetadote China and Hong Kong Development Our international commercialization agreements include a license to one or more Cumberland products for a specific territory as noted in the table above. We seek partners who have the local infrastructure to support the registration and commercialization of our products in their territory.
Alternative oral treatments must be taken several times (day and night) to deliver the same therapeutic doses. 6 In early 2022, we assumed full commercial responsibility for the product in the U.S. – including its marketing, promotion, distribution, manufacturing, and medical support activities.
Alternative oral treatments must be taken several times (day and night) to deliver the same therapeutic doses. In early 2022, we assumed full commercial responsibility for the product in the U.S. – including its marketing, promotion, distribution, manufacturing and medical support activities.
The PAC received initial funding from us, and future funding will include voluntary individual contributions from Cumberland Pharmaceuticals directors and employees. MANUFACTURING AND DISTRIBUTION Manufacturing We partner with third parties for certain non-core, capital-intensive capabilities, including the manufacturing and distribution of our products.
The PAC received initial funding from us, and future funding will include voluntary individual contributions from Cumberland Pharmaceuticals directors and employees. 17 MANUFACTURING AND DISTRIBUTION Manufacturing We partner with third parties for certain non-core, capital-intensive capabilities, including the manufacturing and distribution of our products.
Because some events may occur after the use of a drug for reasons unrelated to the product, the FDA reviews the events to assess which ones may indicate a problem with that particular drug. They then use information gleaned from the surveillance data to determine a course of action.
Because some events may occur after the use of a drug for reasons unrelated to the product, the FDA reviews the events to assess which ones may indicate a problem with that particular drug. 29 They then use information gleaned from the surveillance data to determine a course of action.
By ruling in Cumberland’s favor, the court upheld the validity of the patent that encompasses our EDTA-free formulation. The court also granted a permanent injunction preventing challengers from marketing a generic version of our proprietary Acetadote product formulation before the expiration of Cumberland’s patent in August 2025.
By ruling in Cumberland’s favor, the court upheld the validity of the patent that encompasses our EDTA-free formulation. The court also granted a permanent injunction preventing challengers from marketing a generic version of our proprietary Acetadote product formulation before the expiration of Cumberland’s patent in 3 August 2025.
Demand for the product increased in 2020 during the pandemic, and we worked to support the expanded use of the product in hospitals and clinics during the health care crisis. During 2021, we shipped all remaining inventory of the product and have notified the FDA that supplies of the product are not currently available.
Demand for the product increased in 2020 during the pandemic, and we worked to support the expanded use of the product in hospitals and clinics during the health care crisis. During 2021, we shipped all remaining inventory of the product and notified the FDA that supplies of the product are not currently available.
TPr and its ligand, isoprostanes, are found to have increased in DMD patients. Preclinical studies by our Vanderbilt collaborators demonstrated TPr blockade by ifetroban prevented cardiac dysfunction and improved mortality in several animal models of muscular dystrophy.
TPr and its ligand, isoprostanes, are found to have increased in DMD patients. 8 Preclinical studies by our Vanderbilt collaborators demonstrated TPr blockade by ifetroban prevented cardiac dysfunction and improved mortality in several animal models of muscular dystrophy.
ICH - International Committee on Harmonization Outside of the U.S., our ability to market our products will depend on receiving marketing authorizations from the appropriate regulatory authorities. The International Committee on Harmonization (ICH) provides a set of standards that most regulatory authorities adhere to (e.g.
ICH - International Committee on Harmonization Outside of the U.S., our ability to market our products will depend on receiving marketing authorizations from the appropriate regulatory authorities. The International Committee on Harmonization (“ICH”) provides a set of standards that most regulatory authorities adhere to (e.g.
Completion of our second Phase IV commitment resulted in further revised labeling for the product with FDA approval of additional safety data. 3 Completion of our third and final Phase IV commitment culminated in the FDA’s approval of a new formulation for the product.
Completion of our second Phase IV commitment resulted in further revised labeling for the product with FDA approval of additional safety data. Completion of our third and final Phase IV commitment culminated in the FDA’s approval of a new formulation for the product.
The lipophilic addition 7 increases Vibativ’s ability to penetrate the cell wall and inhibits the formation of new cell walls (the development of new and/or additional cell walls is the most common way that bacteria become resistant to drugs).
The lipophilic addition increases Vibativ’s ability to penetrate the cell wall and inhibits the formation of new cell walls (the development of new and/or additional cell walls is the most common way that bacteria become resistant to drugs).
To that end, we work with qualified search firms to identify talent, we measure and adjust compensation levels to remain competitive and we work closely with team members to support their success. 34 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS We make statements in this Annual Report on Form 10-K that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
To that end, we work with qualified search firms to identify talent, we measure and adjust compensation levels to remain competitive and we work closely with team members to support their success. 31 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS We make statements in this Annual Report on Form 10-K that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
In addition, we also are required to participate in the Public Health Service's 340B drug pricing program, which requires us to agree to charge no more than a designated ceiling price for covered outpatient drugs that are dispensed to community health clinics and other 31 entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients.
In addition, we also are required to participate in the Public Health Service’s 340B drug pricing program, which requires us to agree to 28 charge no more than a designated ceiling price for covered outpatient drugs that are dispensed to community health clinics and other entities that receive health services grants from the Public Health Service, as well as hospitals that serve a disproportionate share of low-income patients.
The FDA also requires post market safety surveillance reporting to monitor the side effects of the drug, which may result in withdrawal of approval after marketing begins if significant adverse safety findings are found. Section 505(b)(1) or the 'full' NDA is used for new chemical entities ("NCEs") and requires full clinical and nonclinical development of a compound.
The FDA also requires post market safety surveillance reporting to monitor the side effects of the drug, which may result in withdrawal of approval after marketing begins if significant adverse safety findings are found. Section 505(b)(1), or the ‘full’ NDA, is used for new chemical entities (“NCEs”) and requires full clinical and nonclinical development of a compound.
Generics must demonstrate that the product is bioequivalent (i.e., performs in the same manner and is comparable to the 'innovator' product in active ingredient, dosage form, strength, route of administration, labeling, quality, performance characteristics and intended use). 30 Abbreviated applications may be submitted for drug products that are the same as a listed drug and must be identical in active ingredient(s), form, strength, route of administration, and identical in conditions of use (non-exclusive uses).
Generics must demonstrate that the product is bioequivalent (i.e., performs in the same manner and is comparable to the 'innovator' product in active ingredient, dosage form, strength, route of administration, labeling, quality, performance characteristics and intended use). 27 Abbreviated applications may be submitted for drug products that are the same as a listed drug and must be identical in active ingredient(s), form, strength, route of administration and in conditions of use (non-exclusive uses).
To get that approval, the manufacturer must demonstrate the drug's safety and effectiveness according to criteria specified in law and agency regulations, ensure that its manufacturing plant passes FDA inspection, and obtain FDA approval for the drug's labeling, a term that includes all written material about the drug, including, for example, packaging, prescribing information for physicians and patient brochures. 28 The progression to drug approval begins before FDA involvement.
To get that approval, the manufacturer must demonstrate the drug's safety and effectiveness according to criteria specified in law and agency regulations, ensure that its manufacturing plant passes FDA inspection, and obtain FDA approval for the drug's labeling, a term that includes all written material about the drug, including, for example, packaging, prescribing information for physicians and patient brochures. 25 The progression to drug approval begins before FDA involvement.
First, scientists work in the laboratory to discover and develop a new compound. Next, basic questions on safety are answered by nonclinical testing with animals and then, a drug or biotechnology company develops a prototype drug. That company must seek clearance from the FDA by way of an Investigational New Drug ("IND") application to test the product with human subjects.
First, scientists work in the laboratory to discover and develop a new compound. Next, basic safety questions are answered by nonclinical testing with animals and then, a drug or biotechnology company develops a prototype drug. That company must seek clearance from the FDA by way of an IND application to test the product with human subjects.
An Appeals Court affirmed the District Court ruling in the Company's favor upholding Cumberland's Acetadote patent and expressly rejected the validity challenge. During 2022, we continued to distribute our Acetadote brand, however our Authorized Generic product is now distributed through Padagis US LLC (formerly a division of Perrigo Company).
An Appeals Court affirmed the District Court ruling in the Company’s favor upholding Cumberland’s Acetadote patent and expressly rejected the validity challenge. During 2023, we continued to distribute our Acetadote brand, however our Authorized Generic product is now distributed through Padagis US LLC (formerly a division of Perrigo Company).
Pharm”) has licensed our Caldolor product for the South Korean market, and they obtained regulatory approval for Caldolor in their country. During 2022, D.B. Pharm continued to purchase supplies of Caldolor and distributed the brand in South Korea. We have also entered into agreements with D.B. Pharm to register and commercialize our Vaprisol and Vibativ brands in their country.
Pharm”) has licensed our Caldolor product for the South Korean market, and they obtained regulatory approval for Caldolor in their country. During 2023, D.B. Pharm continued to purchase supplies of Caldolor and distributed the brand in South Korea. We have also entered into agreements with D.B. Pharm to register and commercialize our Vaprisol and Vibativ brands in their country.
The complete response letter will describe the specific deficiencies that the agency has identified in an application and what changes must be made before the application can be approved, with no implication regarding 29 whether the application will ultimately be approved. An approval letter authorizes commercial marketing of the drug for the proposed indication(s) under study.
The complete response letter will describe the specific deficiencies that the agency has identified in an application and what changes must be made before the application can be approved, with no implication regarding 26 whether the application will ultimately be approved. An approval letter authorizes commercial marketing of the drug for the proposed indication(s) under study.
Orphan drug designation The Orphan Drug Act of 1983 (the "Orphan Drug Act") encourages manufacturers to seek approval of products intended to treat “rare diseases and conditions” with a prevalence of fewer than 200,000 patients in the U.S. or for which there is no reasonable expectation of recovering the development costs for the product.
Orphan drug designation The Orphan Drug Act of 1983 (the “Orphan Drug Act”) encourages manufacturers to seek approval of products intended to treat “rare diseases and conditions” with a prevalence of fewer than 200,000 patients in the U.S. or for which there is no reasonable expectation of recovering the development costs for the product.
Both 505 (b)(1) and (b)(2) are eligible for seven years of exclusivity for orphan drugs and/or six months for pediatric exclusivity. Any marketing exclusivity is independent of patent exclusivity. We successfully secured FDA approvals for Acetadote in January 2004, for Caldolor in June 2009 and for RediTrex in 2019 pursuant to the 505(b)(2) pathway.
Both 505 (b)(1) and (b)(2) are eligible for seven years of exclusivity for orphan drugs and/or six months for pediatric exclusivity. Any marketing exclusivity is independent of patent exclusivity. We successfully secured FDA approvals for Acetadote in January 2004 and for Caldolor in June 2009 pursuant to the 505(b)(2) pathway.
The claims of the 356 Acetadote Patent encompass the new Acetadote formulation and include composition of matter claims. Following its issuance, the 356 Acetadote Patent was listed in the FDA Orange Book. The 356 Acetadote Patent is scheduled to expire in May 2026, which time period includes a 270-day patent term adjustment granted by the USPTO.
The claims of the 356 Acetadote Patent encompass the new Acetadote formulation and include composition of matter claims. Following its issuance, the 356 Acetadote Patent was listed in the FDA Orange Book. The 356 Acetadote Patent is scheduled to expire in May 2026, which includes a 270-day patent term adjustment granted by the USPTO.
These laws include obligations related to protecting the privacy and security of health-related personal information, including information that we may obtain through the clinical trial process. In addition, similar laws and regulations exist in Europe and other jurisdictions, including the European Union's General Data Protection Regulation.
These laws include obligations related to protecting the privacy and security of health-related personal information, such as information that we may obtain through the clinical trial process. In addition, similar laws and regulations exist in Europe and other jurisdictions, including the European Union’s General Data Protection Regulation.
This patent was acquired in our December 2021 acquisition, that closed in January 2022, of certain product rights, intellectual property and related assets of Sancuso from Kyowa Kirin, Inc. The 282 Sancuso Patent is listed in the FDA Orange Book and is scheduled to expire in January 2025.
This patent was acquired in our December 2021 acquisition, which closed in January 2022. The patent is of certain product rights, intellectual property and related assets of Sancuso from Kyowa Kirin, Inc. The 282 Sancuso Patent is listed in the FDA Orange Book and is scheduled to expire in January 2025.
We, our manufacturers and contract research organizations may also be subject to regulations under other federal, state and local laws, including the Occupational Safety and Health Act, (OSHA), the Resource Conservation and Recovery Act, the Clean Air Act and import, export and customs regulations as well as the laws and regulations of other countries.
We, our manufacturers and contract research organizations may also be subject to regulations under other federal, state and local laws, including the Occupational Safety and Health Act, (“OSHA”), the Resource Conservation and Recovery Act, the Clean Air Act and import, export and customs regulations as well as the laws and regulations of other countries.
Regulatory harmonization offers many direct benefits to both regulatory authorities and the pharmaceutical industry with beneficial impact for the protection of public health. 33 ENVIRONMENTAL MATTERS We are subject to federal, state and local environmental laws and regulations and we believe that our operations comply with such regulations.
Regulatory harmonization offers many direct benefits to both regulatory authorities and the pharmaceutical industry with beneficial impact for the protection of public health. 30 ENVIRONMENTAL MATTERS We are subject to federal, state and local environmental laws and regulations and we believe that our operations comply with such regulations.
Newer branded agents are also available including: • Ceftaroline fosamil (brand name Teflaro ® ) an injectable antibiotic manufactured and sold by Allergan • Dalbavancin (brand name Dalvance ® ), an injectable antibiotic manufactured and sold by Allergan • Oritavancin (brand name Orbactiv ® ), an injectable antibiotic manufactured and sold by Melinta We are aware of a number of other novel antibiotics which are currently in development.
Newer branded agents are also available including: • Ceftaroline fosamil (brand name Teflaro ® ), an injectable antibiotic manufactured and sold by Allergan; • Dalbavancin (brand name Dalvance ® ), an injectable antibiotic manufactured and sold by Allergan; and • Oritavancin (brand name Orbactiv ® ), an injectable antibiotic manufactured and sold by Melinta We are also aware of a number of other novel antibiotics that are currently in development.
In 2022, Cardinal Health Specialty Solutions exclusively handled our U.S. product logistics activities, including warehousing, shipping, and various other customer activities. Our primary customers are the wholesalers of pharmaceuticals who provide our products to hospitals, clinics and retail pharmacies in the U.S.
In 2023, Cardinal Health Specialty Solutions exclusively handled our U.S. product logistics activities, including warehousing, shipping, and various other customer activities. Our primary customers are the wholesalers of pharmaceuticals who provide our products to hospitals, clinics and retail pharmacies in the U.S.
On September 30, 2015, the United States District Court for the Northern District of Illinois, Eastern Division ("District Court") ruled in our favor in our lawsuit against Mylan for infringement of the 445 Acetadote Patent. The opinion upheld our 445 Acetadote Patent and expressly rejected Mylan's validity challenge.
On September 30, 2015, the United States District Court for the Northern District of Illinois, Eastern Division (“District Court”) ruled in our favor in our lawsuit against Mylan for infringement of the 445 Acetadote Patent. The opinion upheld our 445 Acetadote Patent and expressly rejected Mylan’s validity challenge.
We renewed our agreement with Foxland in 2022. Nordic License Agreement In July 2022, we entered into an amendment to our agreement with Nordic Pharma (“Nordic”) that addresses the responsibilities and financial arrangements regarding our license to Nordic’s methotrexate line of products for the U.S.
We renewed our agreement with Foxland in 2022. Nordic License Agreement In July 2022, we entered into an amendment to our agreement with Nordic Pharma (“Nordic”) that addressed the responsibilities and financial arrangements regarding our license to Nordic’s methotrexate line of products for the U.S.
We manage these third-party relationships and are responsible for the quality review and release of each lot of our products. Acetadote ® We have an agreement with one manufacturer, who provided commercial supplies of Acetadote in 2022.
We manage these third-party relationships and are responsible for the quality review and release of each lot of our products. Acetadote ® We have an agreement with one manufacturer, who provided commercial supplies of Acetadote in 2023.
We have entered into a series of agreements to establish an international network, which is summarized in the table below and includes information on our primary partners: International Partner Product(s) Territory Status Phebra Pty Ltd Acetadote & Caldolor Australia Marketed DB Pharm Korea Co., Ltd. Caldolor South Korea Marketed Sandor Medicaids Pvt. Ltd.
We have entered into a series of agreements to establish an international network, which is summarized in the table below and includes information on our primary partners: International Partner Product(s) Territory Status Phebra Pty Ltd Acetadote & Caldolor Australia Marketed D.B. Pharm Korea Co., Ltd. Caldolor South Korea Marketed Sandor Medicaids Pvt. Ltd.
Acetadote ® We developed a new formulation of Acetadote (acetylcysteine) Injection as part of a Phase IV commitment in response to a request by the FDA to evaluate the reduction of ethylene diamine tetraacetic acid ("EDTA") from the 21 product's formulation. In April 2012, the USPTO issued U.S. Patent number 8,148,356 (the “356 Acetadote Patent”) which is assigned to us.
Acetadote ® We developed a new formulation of Acetadote (acetylcysteine) injection as part of a Phase IV commitment in response to a request by the FDA to evaluate the reduction of ethylene diamine tetraacetic acid (“EDTA”) from the product’s formulation. In April 2012, the USPTO issued U.S. Patent number 8,148,356 (the “356 Acetadote Patent”) which is assigned to us.
The new, premixed presentation provides healthcare professionals a formulation that is easy to administer, helping manage the treatment of patient pain and fever, while reducing opioid consumption. It is provided in a pre-mixed bag containing 800 mg of ibuprofen in a 200 mL patented low sodium formulation for injection that is ready to use.
The new, premixed presentation provides health care professionals a formulation that is easy to administer, helping manage the treatment of patient pain and fever, while reducing opioid consumption. It is provided in a pre-mixed bag containing 800 mg of ibuprofen in a 200 mL patented low sodium formulation for injection that is ready to use.
Caldolor ® We have agreements with multiple manufacturers for the supply of Caldolor and during 2022 we obtained commercial supplies from three of these manufacturers for our international and domestic Caldolor requirements. Kristalose ® We have an agreement for the purchase of Kristalose API with an international supplier.
Caldolor ® We have agreements with multiple manufacturers for the supply of Caldolor and during 2023, we obtained commercial supplies from three of these manufacturers for our international and domestic Caldolor requirements. Kristalose ® We have an agreement for the purchase of Kristalose API with an international supplier.
The FDA cleared our Investigational New Drug (IND) application to evaluate 12 months of oral ifetroban (Vasculan) in a 34-subject phase II trial entitled, A Phase II Randomized, Double-Blind, Placebo-Controlled Study to Assess the Safety and Efficacy of Ifetroban in Patients with Diffuse Cutaneous Systemic Sclerosis or Systemic Sclerosis-Associated Pulmonary Arterial Hypertension.
The FDA cleared our IND application to evaluate 12 months of oral ifetroban (Vasculan) in a 34-subject phase II trial entitled, A Phase II Randomized, Double-Blind, Placebo-Controlled Study to Assess the Safety and Efficacy of Ifetroban in Patients with Diffuse Cutaneous Systemic Sclerosis or Systemic Sclerosis-Associated Pulmonary Arterial Hypertension.
In 2019, we extended our co-promotion arrangement with Poly. 2R and Foxland Agreements In 2018, we entered into another co-promotion arrangement related to our Kristalose product. We have agreements with 2R Investments, LLC and with Foxland Pharmaceuticals, Inc. ("Foxland") to package, distribute and promote an authorized generic form of our Kristalose product to physician targets that we do not cover.
In 2019, we extended our co-promotion arrangement with Poly. 2R and Foxland Agreements In 2018, we entered into another co-promotion arrangement related to our Kristalose product. We have agreements with 2R Investments, LLC and with Foxland Pharmaceuticals, Inc. (“Foxland”) to package, distribute and promote an unbranded generic form of our Kristalose product to physician targets that we do not cover.
The objective of the PAC is to support candidates and policies that are consistent with Cumberland’s mission of advancing patient care. The PAC’s activities will be at the local, state and federal level and conducted in a bi-partisan manner. The initial committee membership is comprised of Cumberland Pharmaceuticals employees.
The objective of the PAC is to support candidates and policies that are consistent with Cumberland’s mission of advancing patient care. The PAC’s activities are held at a local, state, and federal level and conducted in a bi-partisan manner. The initial committee membership is comprised of Cumberland Pharmaceuticals employees.
We also had manufacturing arrangements with a packager who provided finished supplies of the product for commercial and sampling purposes during 2022. Omeclamox-Pak ® The packager for Omeclamox-Pak encountered financial difficulties in 2020 due to the economic impact of COVID-19, and their operations are currently suspended.
We also had manufacturing arrangements with a packager who provided finished supplies of the product for commercial and sampling purposes during 2023. Omeclamox ® -Pak The packager for Omeclamox-Pak encountered financial difficulties in 2020 due to the impact of COVID-19, and their operations are currently suspended.
Following the issuance of the 356 Acetadote Patent, we received separate Paragraph IV certification notices from InnoPharma, Inc. ("InnoPharma"), Paddock Laboratories, LLC (“Paddock”), Mylan Institutional LLC (“Mylan”), Sagent Agila LLC ("Sagent") and Perrigo Company ("Perrigo") challenging the 356 Acetadote Patent on the basis of non-infringement and/or invalidity.
Following the issuance of the 356 Acetadote Patent, we received separate Paragraph IV certification notices from InnoPharma, Inc. (“InnoPharma”), Paddock Laboratories, LLC (“Paddock”), Mylan Institutional LLC (“Mylan”), Sagent Agila LLC (“Sagent”) and Perrigo Company (“Perrigo”) challenging the 356 Acetadote Patent on the basis of non-infringement and/or invalidity.
In October 2022, we announced an agreement with PiSA Pharmaceutical for the registration and commercialization of Caldolor in Mexico. Under the terms of the agreement, Cumberland will be responsible for providing the product dossier and supplies. PiSA will be responsible for obtaining regulatory approval for the product in Mexico and introducing it to the new market.
We also announced an agreement with PiSA Pharmaceutical for the registration and commercialization of Caldolor in Mexico. Under the terms of the agreement, Cumberland will be responsible for providing the product dossier and supplies. PiSA will be responsible for obtaining regulatory approval for the product in Mexico and introducing it to the new market.
Products are declared suitable based on a suitability petition to the FDA. If the petition is approved, the sponsor may then submit the ANDA. The Hatch-Waxman Act The Drug Price Competition and Patent Term Restoration Act, informally known as the "Hatch-Waxman Act", is a 1984 United States federal law which established the modern system of generic drugs.
Products are declared suitable based on a suitability petition to the FDA. If the petition is approved, the sponsor may then submit the ANDA. The Hatch-Waxman Act The Drug Price Competition and Patent Term Restoration Act, informally known as the “Hatch-Waxman Act”, is a 1984 United States federal law that established the modern system of generic drugs.
During 2022, we worked to support our existing international partners, conclude unproductive arrangements and identify new companies to represent our products in select additional territories. 13 BUSINESS DEVELOPMENT Since inception, we have had an active business development initiative focused on acquiring rights to marketed products and product candidates that fit our strategy and target markets.
During 2023, we worked to support our existing international partners, conclude unproductive arrangements and identify new companies to represent our products in select additional territories. 12 BUSINESS DEVELOPMENT Since inception, we have had an active business development initiative focused on acquiring rights to marketed products and product candidates that fit our strategy and target markets.
Build Back Better Act and Other Proposed Legislation: The Build Back Better Act ("BBBA") was introduced in the 117 th Congress and included provisions that were intended to lower the price of prescription drugs, including granting the Medicare program the authority to negotiate prescription drug prices and imposing tax penalties on drug manufacturers if the price of drugs increase too rapidly.
Build Back Better Act and Other Proposed Legislation: The Build Back Better Act (“BBBA”) was introduced in the 117 th Congress and included provisions that were intended to lower the price of prescription drugs, including granting the Medicare program the authority to negotiate prescription drug prices and imposing tax penalties on drug manufacturers if the price of drugs increases too rapidly.
On November 17, 2015, the District Court entered an order enjoining Mylan and its affiliates from selling or using its generic version of Acetadote until August 2025, the date of expiration of the 445 Acetadote Patent. On October 30, 2015, Mylan filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit (the "Appeals Court").
On November 17, 2015, the District Court entered an order enjoining Mylan and its affiliates from selling or using its generic version of Acetadote until August 2025, the date of expiration of the 445 Acetadote Patent. On October 30, 2015, Mylan filed a notice of appeal to the U.S.
Antibiotic drug selection is based both on an empiric and susceptibility proven basis. In the hospital setting, cost is an important factor which favors the use of generic agents as long as they are effective.
Antibiotic drug selection is based both on an empiric and susceptibility proven basis. In the hospital setting, cost is an important factor which favors the use of generic agents if they are effective.
Enrollment in this study is well underway and includes patients with diffuse cutaneous SSc, as well as those with pulmonary arterial hypertension associated with their SSc.
This study is well underway and includes patients with diffuse cutaneous SSc, as well as those with pulmonary arterial hypertension associated with their SSc.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending New Drug Application ("NDAs") or biologics license applications, ("BLAs"), warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to approve pending New Drug Applications (“NDAs”) or biologics license applications, (“BLAs”), warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.
We have since transferred manufacturing of the product to a new manufacturing facility. Our new manufacturing partner is working with the FDA to address several Form 483 and warning letter issues in a timely manner.
We have since transferred the product’s 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.
Physician Payments Sunshine Act: The PPACA also includes provisions known as the Physician Payments Sunshine Act, or Sunshine Act, which requires manufacturers of pharmaceuticals and medical devices covered under Medicare and Medicaid to record any transfers of value to physicians and teaching hospitals and to report this data to the Centers for Medicare and Medicaid Services, or CMS, for aggregation and subsequent public disclosure.
Physician Payments Sunshine Act: The PPACA also includes provisions known as the Physician Payments Sunshine Act (“Sunshine Act”), which requires manufacturers of pharmaceuticals and medical devices covered under Medicare and Medicaid to record any transfers of value to physicians and teaching hospitals and to report this data to the Centers for Medicare and Medicaid Services (“CMS”), for aggregation and subsequent public disclosure.
We have taken necessary steps to implement this program and are in compliance with all requirements by the November 2018 deadline. 21 st Century Cures Act: The 21st Century Cures Act (Cures Act), signed into law on December 13, 2016, is designed to help accelerate medical product development and bring new innovations and advances to patients who need them faster and more efficiently.
We have taken necessary steps to implement this program and are in compliance with all requirements. 21 st Century Cures Act: The 21st Century Cures Act (“Cures Act”), signed into law on December 13, 2016, is designed to help accelerate medical product development and bring new innovations and advances to patients who need them faster and more efficiently.
For more information, see "Risks Relating to Government Regulation" in Part I, Item 1A of this Form 10K. In the U.S., the FDA under the Federal Food, Drug, and Cosmetic Act, ("FDCA"), the Public Health Service Act, and other federal statutes and regulations, subjects pharmaceutical products to rigorous review.
For more information, see "Risks Relating to Government Regulation" in Part I, Item 1A of this Form 10-K. In the U.S., the FDA under the Federal Food, Drug, and Cosmetic Act, (“FDCA”), the Public Health Service Act, and other federal statutes and regulations, subjects pharmaceutical products to rigorous review.
While the FDA's PDUFA 2021 Performance Report showed a continued increase in the percentage of first-cycle approval letters for new molecular entities rising from 56% for FY 2009 to preliminary reports of 100% for FY 2021, we cannot be certain that timely first-cycle approvals will be maintained by the FDA.
While the FDA’s PDUFA 2021 Performance Report showed a continued increase in the percentage of first-cycle approval letters for new molecular entities rising from 56% for FY 2009 to 84% for FY 2023, we cannot be certain that timely first-cycle approvals will be maintained by the FDA.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Violations of the anti-kickback statute are punishable by imprisonment, criminal fines, civil monetary penalties and exclusion from participation in federal health care programs.
This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers and prescribers, purchasers or formulary managers. Violations of the anti-kickback statute are punishable by imprisonment, criminal fines, civil monetary penalties and exclusion from participation in federal health care programs.
The FDA requires that clinical trials be conducted in accordance with the FDA's Good Clinical Practice GCP requirements.
The FDA requires that clinical trials be conducted in accordance with the FDA’s Good Clinical Practice (“GCP”) requirements.
Food and Drug Administration (“FDA”) includes: • Acetadote ® ( acetylcysteine ) injection, for the treatment of acetaminophen poisoning; • Caldolor ® ( ibuprofen ) injection, for the treatment of pain and fever; • Kristalose ® ( lactulose ) for oral solution, a prescription laxative, for the treatment of constipation; • Omeclamox-Pak ® , ( omeprazole, clarithromycin, amoxicillin ) oral, for the treatment of Helicobacter pylori ( H. pylori ) infection and related duodenal ulcer disease; • RediTrex ® ( methotrexate ) injection, for the treatment of active rheumatoid, juvenile idiopathic and severe psoriatic arthritis, as well as disabling psoriasis; • Sancuso ® ( granisetron) transdermal, for the prevention of nausea and vomiting in patients receiving certain types of chemotherapy treatment; • Vaprisol ® ( conivaptan ) injection, to raise serum sodium levels in hospitalized patients with euvolemic and hypervolemic hyponatremia; and • Vibativ ® ( telavancin ) injection, 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.
Food and Drug Administration (“FDA”) includes: • Acetadote ® ( acetylcysteine ) injection, for the treatment of acetaminophen poisoning; • Caldolor ® ( ibuprofen ) injection, for the treatment of pain and fever; • Kristalose ® ( lactulose ) for oral solution, a prescription laxative, for the treatment of constipation; • Omeclamox ® -Pak , ( omeprazole, clarithromycin, amoxicillin ) oral, for the treatment of Helicobacter pylori ( H. pylori ) infection and related duodenal ulcer disease; • Sancuso ® ( granisetron) transdermal, for the prevention of nausea and vomiting in patients receiving certain types of chemotherapy treatment; • Vaprisol ® ( conivaptan ) injection, to raise serum sodium levels in hospitalized patients with euvolemic and hypervolemic hyponatremia; and • Vibativ ® ( telavancin ) injection, 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.
We subsequently completed the transfer of the product’s manufacturing to the new facility in 2021. We informed the FDA that supplies of the product are not currently available and are awaiting approval for that new facility. Our new manufacturing partner is working with the FDA to address several Form 483 and warning letter issues in a timely manner.
We informed the FDA that supplies of the product are not currently available and are awaiting approval for that new facility. Our new manufacturing partner is working with the FDA to address several Form 483 and warning letter issues in a timely manner.
Total revenue by customer for each customer representing 10% or more of consolidated gross revenues are summarized below for the year ended December 31, 2022: 2022 Customer 1 29% Customer 2 24% Customer 3 22% 12 INTERNATIONAL PARTNERSHIPS We have established our own capabilities to support the commercialization of our products in the U.S.
Total revenue by customer for each customer representing 10% or more of consolidated gross revenues are summarized below for the year ended December 31, 2023: 2023 Customer 1 29% Customer 2 26% Customer 3 24% 11 INTERNATIONAL PARTNERSHIPS We have established our own capabilities to support the commercialization of our products in the U.S.
Ifetroban Phase II Studies We have been evaluating our ifetroban product candidate in a series of clinical studies.
We have been evaluating our ifetroban product candidate in a series of clinical studies.
We are not aware of any approved injectable products indicated for the treatment of fever in the U.S. other than Caldolor and Ofirmev. There are, however, numerous drugs available to physicians to reduce fevers in hospital settings via oral administration to the patient, including ibuprofen, acetaminophen, and aspirin. These drugs are manufactured by numerous pharmaceutical companies.
We are not aware of any approved injectable products indicated for the treatment of fever in the U.S. other than Caldolor and Ofirmev. There are, however, numerous drugs available to physicians to reduce fevers in hospital settings via oral and rectal administration to the patient, including ibuprofen, acetaminophen and aspirin.
FDA Approval Process The FDA is a regulatory agency within the Department of Health and Human Services. A key responsibility is to regulate the safety and effectiveness of drugs sold in the United States. The FDA manages this responsibility into two phases: pre-approval (premarket) and post approval (post market).
FDA Approval Process The FDA is a regulatory agency within the Department of Health and Human Services. One of their key responsibilities is to regulate the safety and effectiveness of drugs sold in the United States. The FDA manages this responsibility in two phases: pre-approval (pre-market) and post approval (post-market).
BACKLOG Due to the relatively short lead-time required to fill orders for our products, backlog of orders is not considered material to our business. EMPLOYEES As of December 31, 2022, we had 85 employees.
BACKLOG Due to the relatively short lead-time required to fill orders for our products, backlog of orders is not considered material to our business. EMPLOYEES As of December 31, 2023, we had 91 employees.
These patents were acquired in our November 2018 acquisition of certain product rights, intellectual property and related assets of Vibativ from Theravance. Two Vibativ patents are listed in the FDA Orange Book. U.S.
Vibativ ® We own numerous U.S. patents and related international patents for Vibativ. These patents were acquired in our November 2018 acquisition of certain product rights, intellectual property and related assets of Vibativ from Theravance. Two Vibativ patents are listed in the FDA Orange Book. U.S.
Section 505(j) abbreviated new drug applications An abbreviated new drug application ("ANDA") is a type of NDA where approval of a generic drug is based on demonstrating comparability to an innovator drug product (the RLD or Reference Listed Drug). Applications are "abbreviated" because they generally don't include preclinical and clinical data to establish safety and effectiveness.
Section 505(j) abbreviated new drug applications An abbreviated new drug application (“ANDA”) is a type of NDA where approval of a generic drug is based on demonstrating comparability to an innovator drug product (the Reference Listed Drug, or RLD). Applications are "abbreviated" because they generally do not include pre-clinical and clinical data to establish safety and effectiveness.
During 2022, we worked with them to prepare the submissions for the approval of each brand there. We have executed a license and distribution agreement with HongKong WinHealth Pharma Group Co. Limited (“WinHealth”) for our Caldolor and Acetadote brands in China and Hong Kong.
During 2022, we worked with them to prepare the submissions for the approval of each brand there. They are currently awaiting the approval of Vibativ in their country. We have executed a license and distribution agreement with HongKong WinHealth Pharma Group Co. Limited (“WinHealth”) for our Caldolor and Acetadote brands in China and Hong Kong.
Caldolor India Marketed GerminMED Caldolor Qatar Marketed R-Pharm JSC Vibativ Russia Marketed Tabuk Pharmaceuticals, Inc. Vibativ Saudi Arabia and Jordan Registration PiSA Pharmaceutical Caldolor Mexico Registration SciClone Pharmaceuticals, Inc. Vibativ China and Hong Kong Registration DB Pharm Korea Co., Ltd. Vibativ & Vaprisol South Korea Registration WinHealth Pharma Group Co.
Caldolor India Marketed R-Pharm JSC Vibativ Russia and CIS Marketed Tabuk Pharmaceuticals Vibativ Saudi Arabia and Jordan Registration PiSA Pharmaceutical Caldolor Mexico Registration SciClone Pharmaceuticals, Inc. Vibativ China and Hong Kong Registration D.B. Pharm Korea Co., Ltd. Vaprisol & Vibativ South Korea Registration WinHealth Pharma Group Co.
The branded prescription products which we believe are our primary competitors are: • Lubiproston (brand name Amitiza ® ), an oral product indicated for the treatment of chronic idiopathic constipation, irritable bowel syndrome with constipation in adults, is manufactured and sold by Mallinckrodt Pharmaceuticals. • Naloxegol (brand name Movantik ® ), an oral product indicated for the treatment of opioid-induced constipation in adults with chronic non-cancer pain and recently acquired by RedHill Biopharma in the first quarter of 2020. • Linaclotide (brand name Linzess ® ), an oral product indicated for the treatment of irritable bowel syndrome with constipation and chronic idiopathic constipation.
The branded prescription products which we believe are our primary competitors are: • Lubiproston (brand name Amitiza ® ), an oral product indicated for the treatment of chronic idiopathic constipation, irritable bowel syndrome with constipation in adults, is manufactured and sold by Mallinckrodt Pharmaceuticals. • Naloxegol (brand name Movantik ® ), an oral product indicated for the treatment of opioid-induced constipation in adults with chronic non-cancer pain.
Regulatory and Quality Affairs Our internal regulatory and quality affairs team is responsible for: • preparing and submitting INDs for clearance to begin patient studies; • preparing and submitting NDAs and fulfilling post-approval marketing commitments; • maintaining investigational and marketing applications through the submission of appropriate reports; • submitting supplemental applications for additional label indications, product line extensions and manufacturing improvements; • evaluating regulatory risk profiles for product acquisition candidates, including compliance with manufacturing, labeling, distribution and marketing regulations; • monitoring applicable third-party service providers for quality and compliance with current Good Manufacturing Practices ("GMPs"), Good Laboratory Practices ("GLPs"), and Good Clinical Practices ("GCPs"), and performing periodic audits of such vendors; and • maintaining systems for document control, product and process change control and customer complaints.
Regulatory and Quality Affairs Our internal regulatory and quality affairs team is responsible for: • preparing and submitting INDs for clearance to begin patient studies; • preparing and submitting NDAs and fulfilling post-approval marketing commitments; • maintaining investigational and marketing applications through the submission of appropriate reports; • submitting supplemental applications for additional label indications, product line extensions and manufacturing improvements; • evaluating regulatory risk profiles for product acquisition candidates, including compliance with manufacturing, labeling, distribution and marketing regulations; • monitoring applicable third-party service providers for quality and compliance with current Good Manufacturing Practices (“GMPs”), Good Laboratory Practices (“GLPs”), and Good Clinical Practices (“GCPs”), and performing periodic audits of such vendors; and • maintaining systems for document control, product and process change control and customer complaints. 15 PROFESSIONAL AND MEDICAL AFFAIRS Our medical team provides in-house medical information support for our marketed products.
We have three Phase II clinical programs underway evaluating our ifetroban product candidate in 1) Aspirin-Exacerbated Respiratory Disease, a severe form of asthma, 2) Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs and 3) patients with cardiomyopathy associated with Duchenne Muscular Dystrophy , a rare, fatal, genetic neuromuscular disease results in deterioration of the skeletal, heart and lung muscles.
We have three Phase II clinical programs underway evaluating our ifetroban product candidate in 1) Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs, 2) patients with cardiomyopathy associated with Duchenne Muscular Dystrophy , a rare, fatal, genetic neuromuscular disease results in deterioration of the skeletal, heart and lung muscles and 3) patients with Idiopathic Pulmonary Fibrosis, the most common form of progressive fibrosing interstitial lung disease.
On May 3, 2016, the USPTO issued U.S. Patent number 9,327,028 (the “028 Acetadote Patent”) which is assigned to us. The claims of the 028 Acetadote Patent encompass administration methods of acetylcysteine injection, without specification of the presence or lack of EDTA in the injection.
Court of Appeals for the Federal Circuit (the “Appeals Court”). 20 On May 3, 2016, the USPTO issued U.S. Patent number 9,327,028 (the “028 Acetadote Patent”) which is assigned to us. The claims of the 028 Acetadote Patent encompass administration methods of acetylcysteine injection, without specification of the presence or lack of EDTA in the injection.
We are aware of other product candidates in development to treat acute pain including injectable NSAIDs, novel opioids, new formulations of existing therapies and extended release anesthetics. We believe non-narcotic analgesics for the treatment of post-surgical pain are the primary potential competitors to Caldolor.
FDA in October 2023, and is sold by Hikma Pharmaceuticals PLC. We are aware of other product candidates in development to treat acute pain including injectable NSAIDs, novel opioids, new formulations of existing therapies and extended release anesthetics. We believe non-narcotic analgesics for the treatment of post-surgical pain are the primary potential competitors to Caldolor.
Under policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA (currently PDUFA VI - effective October 1, 2017), the FDA has a target timeline of 10 months in which to complete its initial review of a standard NDA and respond to the applicant.
Under policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA (currently PDUFA VII - effective September 30, 2022), the FDA has a target timeline of 10 months in which to complete its initial review of a standard NDA and respond to the applicant.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAlso, reimbursement practices of third-party payors might preclude us from achieving market acceptance for our products or maintaining price levels sufficient to realize an appropriate return on our investment in product acquisition and development. If we cannot obtain adequate reimbursement levels, our business, financial condition and results of operations would be materially and adversely affected.
Biggest changeFuture cost control initiatives, legislation, and regulations could decrease the price that we receive for our products, which would limit our revenue and profitability. 40 Also, reimbursement practices of third-party payors might preclude us from achieving market acceptance for our products or maintaining price levels sufficient to realize an appropriate return on our investment in product acquisition and development.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, some of our confidential information could be disclosed during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, some of our confidential information could be disclosed during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments.
Potential causes of future fluctuations in our operating results may include: • New product launches, which could increase revenues but also increase sales and marketing expenses; • Acquisition activity and other charges; • Increases in research and development expenses resulting from the acquisition of a product candidate that requires significant additional studies and development; • Ability to utilize unrecognized federal and state net operating loss carryforwards as a result of the exercise of nonqualified options • Changes in the competitive, regulatory or reimbursement environment, which could drive down revenues or drive up sales and marketing or compliance costs; and 53 • Unexpected product liability or intellectual property claims and lawsuits.
Potential causes of future fluctuations in our operating results may include: • New product launches, which could increase revenues but also increase sales and marketing expenses; • Acquisition activity and other charges; • Increases in research and development expenses resulting from the acquisition of a product candidate that requires significant additional studies and development; • Ability to utilize unrecognized federal and state net operating loss carryforwards as a result of the exercise of nonqualified options • Changes in the competitive, regulatory or reimbursement environment, which could drive down revenues or drive up sales and marketing or compliance costs; and • Unexpected product liability or intellectual property claims and lawsuits.
In addition, changes impacting any of our products in areas such as competition, lack of market acceptance or demand, government regulation, intellectual property, reimbursement and manufacturing could have an adverse impact on our future revenues and profitability including: • Changes in intellectual property protection available for our products or competing treatments; • Any unfavorable publicity concerning us, our products, or the markets for these products such as information concerning product contamination or other safety issues in any of our product markets, whether or not directly involving our products; • Perception by physicians and other members of the healthcare community of the safety or efficacy of our products or competing products; • Regulatory developments related to our marketing and promotional practices or the manufacture or continued use of our products; • The prices of our products relative to other drugs or competing treatments; • The impact of current or additional generic competitors; • The availability and level of third-party reimbursement for sales of our products; • The continued availability of adequate supplies of our products to meet demand: • Weakened demand for our products; and 38 • Unforeseen or serious adverse effects outside of those specified in current product labeling being attributed to any of our approved products.
In addition, changes impacting any of our products in areas such as competition, lack of market acceptance or demand, government regulation, intellectual property, reimbursement and manufacturing could have an adverse impact on our future revenues and profitability including: • Changes in intellectual property protection available for our products or competing treatments; • Any unfavorable publicity concerning us, our products, or the markets for these products such as information concerning product contamination or other safety issues in any of our product markets, whether or not directly involving our products; • Perception by physicians and other members of the healthcare community of the safety or efficacy of our products or competing products; • Regulatory developments related to our marketing and promotional practices or the manufacture or continued use of our products; • The prices of our products relative to other drugs or competing treatments; • The impact of current or additional generic competitors; • The availability and level of third-party reimbursement for sales of our products; 35 • The continued availability of adequate supplies of our products to meet demand: • Weakened demand for our products; and • Unforeseen or serious adverse effects outside of those specified in current product labeling being attributed to any of our approved products.
If the manufacturing 39 or packaging facilities are unable to produce useable or marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Kristalose. Omeclamox-Pak: Our packager for Omeclamox-Pak encountered financial difficulties due to the impact of COVID-19, and their operations are currently suspended.
If the manufacturing or packaging facilities are unable to produce useable or marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Kristalose. Omeclamox-Pak: Our packager for Omeclamox-Pak encountered financial difficulties due to the impact of COVID-19, and their operations are currently suspended.
We believe that our subcontractors and vendors take precautionary measures to prevent problems that could affect our business operations as a result of failure or disruption to their information systems. However, there is no guarantee such efforts will be successful in preventing a disruption, and it is possible that we may be impacted by 45 information system failures.
We believe that our subcontractors and vendors take precautionary measures to prevent problems that could affect our business operations as a result of failure or disruption to their information systems. However, there is no guarantee such efforts will be successful in preventing a disruption, and it is possible that we may be impacted by information system failures.
Cumberland is awaiting resumption of those operations while also exploring other alternatives to restart the product’s packaging. In October 2020, we informed the FDA of a shortage of Omeclamox-Pak which continues. If we are unable to obtain marketable inventory in the future, we could suffer an inability to meet demand for Omeclamox-Pak.
Cumberland is awaiting resumption of those operations while also exploring other alternatives to restart the product’s packaging. In October 2020, we informed the FDA of a shortage of Omeclamox-Pak which continues. If we are unable to obtain marketable inventory in the future, we could continue to suffer an inability to meet demand for Omeclamox-Pak.
If we fail to attract and retain the talent required for our business, our business will be materially harmed. We are a relatively small company, and we depend to a great extent on principal members of our management, scientific staff, and sales representatives and managers. If we lose the services of any key personnel, in particular, 43 A.J.
If we fail to attract and retain the talent required for our business, our business will be materially harmed. We are a relatively small company, and we depend to a great extent on principal members of our management, scientific staff, and sales representatives and managers. If we lose the services of any key personnel, in particular, A.J.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. We are subject to stringent government regulation. All of our products face regulatory challenges. RISKS RELATED TO OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our operating results are likely to fluctuate from period to period.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. We are subject to stringent government regulation. All of our products face regulatory challenges. 51 RISKS RELATED TO OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS Our operating results are likely to fluctuate from period to period.
Like many companies in our industry, we have from time to time received inquiries and other types of information requests from government authorities. 47 While the ultimate outcomes of investigations and legal proceedings are difficult to predict, adverse resolutions or settlements of those matters could result in, among other things: • significant damage awards, fines, penalties or other payments, and administrative remedies, such as exclusion and/or debarment from government programs, or other rulings that preclude us from operating our business in a certain manner; • changes and additional costs to our business operations to avoid risks associated with such litigation or investigations; • product recalls; • reputational damage and decreased demand for our products; and • expenditure of significant time and resources that would otherwise be available for operating our business.
Like many companies in our industry, we have from time to time received inquiries and other types of information requests from government authorities. 45 While the ultimate outcomes of investigations and legal proceedings are difficult to predict, adverse resolutions or settlements of those matters could result in, among other things: • significant damage awards, fines, penalties or other payments, and administrative remedies, such as exclusion and/or debarment from government programs, or other rulings that preclude us from operating our business in a certain manner; • changes and additional costs to our business operations to avoid risks associated with such litigation or investigations; • product recalls; • reputational damage and decreased demand for our products; and • expenditure of significant time and resources that would otherwise be available for operating our business.
The occurrence of any information system failures could result in interruptions, delays, loss or corruption of data and cessations or interruptions in the availability of these systems. All of these events or circumstances, among others, could have an adverse effect on our business, results of operations, financial position and cash flows, and they could harm our business reputation.
The occurrence of any information system failures could result in interruptions, delays, loss or corruption of data and cessations or interruptions in the availability of these systems. All of these events or 43 circumstances, among others, could have an adverse effect on our business, results of operations, financial position and cash flows, and they could harm our business reputation.
We cannot be certain whether or when we will achieve profitability because of the significant uncertainties relating to our ability to generate commercially successful drug products. Even if we are successful in obtaining regulatory approvals for manufacturing and commercializing additional drug products, we may incur losses if our 54 drug products do not generate significant revenues.
We cannot be certain whether or when we will achieve profitability because of the significant uncertainties relating to our ability to generate commercially successful drug products. Even if we are successful in obtaining regulatory approvals for manufacturing and commercializing additional drug products, we may incur losses if our drug products do not generate significant revenues.
Our inability to comply with the covenants in our debt instruments could lead to a default or an event of default under the terms thereof, for which we may need to seek relief from our lender in order to waive the associated default or event of default and avoid a potential acceleration of the related indebtedness or cross-default or cross-acceleration to other debt.
Our inability to comply with the covenants in our debt instruments could lead to a default or an event of default under the terms thereof, for which we may need to seek relief from our lender in order to waive the associated default or event of default and avoid a potential acceleration of the related indebtedness or cross-default or cross- 55 acceleration to other debt.
The selling prices of pharmaceutical products tend to 40 decline as competition increases, through new product introduction or otherwise, which could reduce our revenues and profitability. If generic products that compete with any of our branded pharmaceutical products are approved and sold, sales of our products will be adversely affected.
The selling prices of pharmaceutical products tend to decline as competition increases, through new product introduction or otherwise, which could reduce our revenues and profitability. If generic products that compete with any of our branded pharmaceutical products are approved and sold, sales of our products will be adversely affected.
If the manufacturers of Caldolor are unable to produce marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Caldolor. Kristalose: The active pharmaceutical ingredient for Kristalose is manufactured at a single facility through a complex process.
If the manufacturers of Caldolor are unable to produce marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Caldolor. 36 Kristalose: The active pharmaceutical ingredient for Kristalose is manufactured at a single facility through a complex process.
If we or a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with a facility where the product is manufactured, a regulatory agency may impose restrictions on that product or the manufacturer, including withdrawal of the product from the market or suspension of manufacturing.
If we or a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or 46 frequency, or problems with a facility where the product is manufactured, a regulatory agency may impose restrictions on that product or the manufacturer, including withdrawal of the product from the market or suspension of manufacturing.
We have a life insurance policy covering the life of Mr. Kazimi. We have entered into agreements with each of our employees that contain restrictive covenants relating to non-competition and non-solicitation of our customers and suppliers for one year after termination of employment.
We have a life insurance policy covering the life of Mr. Kazimi. We have entered into agreements with each of our employees that 41 contain restrictive covenants relating to non-competition and non-solicitation of our customers and suppliers for one year after termination of employment.
If the closing bid 55 price of our common stock were to fail to meet NASDAQ’s minimum closing bid price requirement, or if we otherwise fail to meet any other applicable requirements of NASDAQ and we are unable to regain compliance, NASDAQ may make a determination to delist our common stock.
If the closing bid price of our common stock were to fail to meet NASDAQ’s minimum closing bid price requirement, or if we otherwise fail to meet any other applicable requirements of NASDAQ and we are unable to regain compliance, NASDAQ may make a determination to delist our common stock.
Manufacturers of 48 drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with GMP and other applicable regulations.
Manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with GMP and other applicable regulations.
Our Revolving Credit Agreement contains specified quarterly financial maintenance covenants. As of December 31, 2022, we were in compliance with the Maximum Funded Debt Ratio financial covenant of the Revolving Credit Agreement. However, we can make no assurance that we will be able to comply with the restrictive and financial covenants contained in the Revolving Credit Agreement in the future.
Our Revolving Credit Agreement contains specified quarterly financial maintenance covenants. As of December 31, 2023, we were in compliance with the Maximum Funded Debt Ratio financial covenant of the Revolving Credit Agreement. However, we can make no assurance that we will be able to comply with the restrictive and financial covenants contained in the Revolving Credit Agreement in the future.
With 41 future acquisitions, we may face financial and operational risks and uncertainties. We may not be able to engage in future product acquisitions, and those we do complete may not be beneficial to us in the long term. Furthermore, other products in development may encounter unforeseen issues during their clinical trials.
With future acquisitions, we may face financial and operational risks and uncertainties. We may not be able to engage in future product acquisitions, and those we do complete may not be beneficial to us in the long term. 39 Furthermore, other products in development may encounter unforeseen issues during their clinical trials.
If a licensor does not perform and if we do not assume the 51 maintenance of the licensed patents in sufficient time to make required payments or filings with the appropriate governmental agencies, we risk losing the benefit of all or some of those patent rights.
If a licensor does not perform and if we do not assume the 49 maintenance of the licensed patents in sufficient time to make required payments or filings with the appropriate governmental agencies, we risk losing the benefit of all or some of those patent rights.
These risks are discussed more fully in the section titled “Risk Factors.” These risks and uncertainties include, but are not limited to, the following: • General economic conditions can have a material adverse effect on our business, financial conditions and result of operations. • Global and national events, including, but not limited to the COVID-19 pandemic, increased inflation, rising interest rates, supply chain disruptions, labor conditions, and international conflict, may adversely affect our revenues, results of operations and financial condition. • Failure to implement strategies to enhance our performance could have a material adverse effect on our business, results of operations and financial conditions. • Our ability to perform depends on keeping and hiring exceptionally talented management and employees, and our failure to do so could have a material adverse effect on our business, revenues, results of operations and financial condition. • Our success depends, in part, on our ability to successfully obtain or retain high-performing third-party performers on commercially acceptable terms, and the failure to do so can have a material adverse effect on our business, financial conditions and results of operations. • Our business is subject to stringent government regulations, it must adhere to numerous complex pieces of legislation, and all of our products face regulatory challenges. • Our business depends on the successful protection of our intellectual property rights and our product candidates becoming approved by regulatory agencies, commercially viable, and accepted by the market. • Our business faces a serious financial risk if generic products that compete with any of our branded pharmaceutical products are approved and sold because sales of our products will be adversely-affected and our business may not recover the capital costs of bringing that product to market. • Our business faces an inherent risk of product liability lawsuits related to the testing of our product candidates and the commercial sale of our products, and if we cannot successfully defend ourselves against the product liability claim, we may incur substantial liabilities. • We may attempt to develop internationally and license our products globally, as well as invest in other businesses or joint ventures, all of which may be unsuccessful, divert our management’s attention and harm our operating results and prospects.
These risks are discussed more fully in the section titled “Risk Factors.” These risks and uncertainties include, but are not limited to, the following: • Global and national conditions and events, including, but not limited to, rising interest rates, increased inflation, supply chain disruptions, labor conditions, pandemics and public health crises and international conflict, may adversely affect our business, revenues, results of operations and financial condition. • Failure to implement strategies to enhance our performance could have a material adverse effect on our business, results of operations and financial conditions. • Our ability to perform depends on keeping and hiring exceptionally talented management and employees, and our failure to do so could have a material adverse effect on our business, revenues, results of operations and financial condition. • Our success depends, in part, on our ability to successfully obtain or retain high-performing third-party performers on commercially acceptable terms, and the failure to do so can have a material adverse effect on our business, financial conditions and results of operations. • Our business is subject to stringent government regulations, it must adhere to numerous complex pieces of legislation, and all of our products face regulatory challenges. • Our business depends on the successful protection of our intellectual property rights and our product candidates becoming approved by regulatory agencies, commercially viable, and accepted by the market. • Our business faces a serious financial risk if generic products that compete with any of our branded pharmaceutical products are approved and sold because sales of our products will be adversely-affected and our business may not recover the capital costs of bringing that product to market. • Our business faces an inherent risk of product liability lawsuits related to the testing of our product candidates and the commercial sale of our products, and if we cannot successfully defend ourselves against the product liability claim, we may incur substantial liabilities. • We may attempt to develop internationally and license our products globally, as well as invest in other businesses or joint ventures, all of which may be unsuccessful, divert our management’s attention and harm our operating results and prospects.
If we are unable to successfully integrate any acquired brands, both current and future, these product acquisitions may not be beneficial to us in the long term. Our ifetoban product candidates have not been approved for sale and may never be successfully commercialized.
If we are unable to successfully integrate any acquired brands, both current and future, these product acquisitions may not be beneficial to us in the long term. Our ifetroban product candidates have not been approved for sale and may never be successfully commercialized.
A significant adverse ruling in any such lawsuit could put our trademarks at risk of being invalidated and could compromise the issuance of our existing trademark applications. 52 Competitors may infringe on our trademarks or the trademarks of our collaborators or licensors.
A significant adverse ruling in any such lawsuit could put our trademarks at risk of being invalidated and could compromise the issuance of our existing trademark applications. 50 Competitors may infringe on our trademarks or the trademarks of our collaborators or licensors.
Our business could be adversely affected by an inability to retain personnel or upward pressure on wages as a result of the competitive labor market. The size of our organization and our potential growth may lead to difficulties in managing operations. As of December 31, 2022, we had 85 employees.
Our business could be adversely affected by an inability to retain personnel or upward pressure on wages as a result of the competitive labor market. The size of our organization and our potential growth may lead to difficulties in managing operations. As of December 31, 2023, we had 91 employees.
In addition, changes in either patent laws or in interpretations of patent laws in the U.S. and other countries may diminish the value of our intellectual property or narrow the scope of our patent protection.
In addition, changes in either patent laws or in interpretations of patent laws in the U.S. and other countries may increase the uncertainties and costs, diminish the value of our intellectual property, or narrow the scope of our patent protection.
Our focus on acquisitions as a growth strategy has created intangible assets whose amortization could negatively affect our results of operations. Our total assets include intangible assets related to our acquisitions. As of December 31, 2022, intangible assets relating to products, which are being amortized, represented approximately 33% of our total assets.
Our focus on acquisitions as a growth strategy has created intangible assets whose amortization could negatively affect our results of operations. Our total assets include intangible assets related to our acquisitions. As of December 31, 2023, intangible assets relating to products, which are being amortized, represented approximately 28 percent of our total assets.
As of December 31, 2022, we did not have any outstanding interest rate swap contracts. 57 Item 1B. Unresolved Staff Comments. None.
As of December 31, 2023, we did not have any outstanding interest rate swap contracts. Item 1B. Unresolved Staff Comments. None.
If we achieve profitability, we may not be able to sustain or increase profitability. Our officers, directors, and principal shareholders, acting as a group, could significantly influence corporate actions. As of December 31, 2022, our officers and directors control approximately 41.81 percent of our common stock.
If we achieve profitability, we may not be able to sustain or increase profitability. Our officers, directors, and principal shareholders, acting as a group, could significantly influence corporate actions. As of December 31, 2023, our officers and directors control approximately 43.3 percent of our common stock.
If we are unable to obtain any needed additional funding, we may be required to reduce the scope of, delay, or eliminate some or all of, our planned research, development and commercialization activities or to license to third parties the rights to develop and/or commercialize products or technologies that we would otherwise seek to develop and/or commercialize ourselves or on terms that are less attractive than they might otherwise be, any of which could materially harm our business.
If we are unable to obtain any needed additional funding, we may be required to reduce the scope of, delay, or eliminate some or all of, our planned research, development and commercialization activities or to license to third parties the rights to develop and/or commercialize products or technologies that we would otherwise seek to develop and/or commercialize ourselves or on terms that are less attractive than they might otherwise be, any of which could materially harm our business. 52 We might also seek to sell assets or rights in one or more commercial products or product development programs.
The market for our common stock may be affected by the reports financial analysts publish about us. If one of the analysts covering us downgrades our stock, its price could decline rapidly and significantly. Securities analysts covering our common stock may discontinue coverage. A lack of research coverage may adversely affect our stock’s market price.
The market for our common stock may be affected by the reports financial analysts publish about us. If one of the analysts covering us downgrades our stock, its price could decline rapidly and significantly. Securities analysts covering our common stock may discontinue coverage.
We must comply with the Physician Payment Sunshine Act. We are required to comply with the United States Physician Payment Sunshine Act, which requires manufacturers of drugs, medical devices and biologicals that participate in U.S. federal healthcare programs to report certain payments and items of value given to physicians and teaching hospitals.
We are required to comply with the United States Physician Payment Sunshine Act, which requires manufacturers of drugs, medical devices and biologicals that participate in U.S. federal healthcare programs to report certain payments and items of value given to physicians and teaching hospitals. Manufacturers are required to report this information annually to The Centers for Medicare & Medicaid Services ("CMS").
We are unable to predict the impact of global credit market trends, and if economic conditions deteriorate, our business, results of operations and ability to raise needed capital could be materially and adversely affected.
Additional capital might not be available to us when we need it. We are unable to predict the impact of global credit market trends, and if economic conditions deteriorate, our business, results of operations and ability to raise needed capital could be materially and adversely affected.
RISKS RELATED TO OWNING OUR STOCK The market price of our common stock may fluctuate substantially. The price for the shares of our common stock sold in our initial public offering was determined by negotiation between the representatives of the underwriters and us.
A lack of research coverage may adversely affect our stock’s market price. 53 RISKS RELATED TO OWNING OUR STOCK The market price of our common stock may fluctuate substantially. The price for the shares of our common stock sold in our initial public offering was determined by negotiation between the representatives of the underwriters and us.
If these third parties do not continue to provide services to us, or collaborate with us, we might not be able to obtain others who can serve these functions. This could disrupt our business operations, increase our operating expenses or otherwise adversely affect our operating results. Competitive pressures could reduce our revenues and profits. The pharmaceutical industry is intensely competitive.
If these third parties do not continue to provide services to us, or collaborate with us, we might not be able to obtain others who can serve these functions. This could disrupt our business operations, increase our operating expenses or otherwise adversely affect our operating results.
Many managed healthcare organizations control the pharmaceutical products included on their formulary lists. Having products listed on these formulary lists creates competition among pharmaceutical companies which, in turn, has created a trend of downward pricing pressure in our industry.
“Formulary” practices of third-party payors could adversely affect our competitive position. Many managed healthcare organizations control the pharmaceutical products included on their formulary lists. Having products listed on these formulary lists creates competition among pharmaceutical companies which, in turn, has created a trend of downward pricing pressure in our industry.
Similarly, there are a number of legislative proposals in the European Union, the United States, at both the federal 50 and state level, as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business. These changes may lead to additional costs and increase our overall risk exposure.
Similarly, there are a number of legislative proposals in the European Union, the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business.
The delisting of our common stock from NASDAQ could negatively impact us by (i) reducing the liquidity and market price of our common stock; (ii) reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; (iii) impacting our ability to use a registration statement to offer and sell freely tradable securities, thereby preventing or limiting us from accessing the public capital markets; and (iv) impairing our ability to provide equity incentives to our employees.
The delisting of our common stock from NASDAQ could negatively impact us by (i) reducing the liquidity and market price of our common stock; (ii) reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; (iii) impacting our ability to use a registration statement to offer and sell freely tradable securities, thereby preventing or limiting us from accessing the public capital markets; and (iv) impairing our ability to provide equity incentives to our employees. 54 Some provisions of our third amended and restated charter, bylaws and Tennessee law may inhibit potential acquisition bids that you may consider favorable.
We have established formal policies or 49 procedures for prohibiting or monitoring this conduct, but we cannot assure you that our employees or other agents will not engage in such conduct for which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could suffer severe penalties.
We have established formal policies or procedures for prohibiting or monitoring this conduct, but we cannot assure you that our employees or other agents will not engage in such conduct for which we might be held responsible.
In addition, legislation enacted in most U.S. states allows or, in some instances mandates, that a pharmacist dispense an available generic equivalent when filling a prescription for a branded product, in the absence of specific instructions from the prescribing physician. Governmental and private healthcare payors also emphasize substitution of branded pharmaceuticals with less expensive generic equivalents.
In addition, legislation enacted in most U.S. states allows or, in some instances mandates, that a pharmacist dispense an available generic equivalent when filling a prescription for a branded product, in the absence of specific instructions from the prescribing physician.
Pursuant to the provisions of the Hatch-Waxman Act, manufacturers of branded products often bring lawsuits to enforce their patent rights against generic products released prior to the expiration of branded products’ patents, but it is possible for generic manufacturers to offer generic products while such litigation is pending.
Governmental and private healthcare payors also emphasize substitution of branded pharmaceuticals with less expensive generic equivalents. 38 Pursuant to the provisions of the Hatch-Waxman Act, manufacturers of branded products often bring lawsuits to enforce their patent rights against generic products released prior to the expiration of branded products’ patents, but it is possible for generic manufacturers to offer generic products while such litigation is pending.
Manufacturers are required to report this information annually to The Centers for Medicare & Medicaid Services ("CMS"). In addition, some states require reporting information concerning payments to health care providers or other transfers of value by drug manufacturers beyond the requirements of the Federal Sunshine Act.
In addition, some states require reporting information concerning payments to health care providers or other transfers of value by drug manufacturers beyond the requirements of the Federal Sunshine Act.
Some provisions of our third amended and restated charter, bylaws and Tennessee law may inhibit potential acquisition bids that you may consider favorable. Our corporate documents contain provisions that may enable our board of directors to resist a change in control of our company even if a change in control were to be considered favorable by you and other shareholders.
Our corporate documents contain provisions that may enable our board of directors to resist a change in control of our company even if a change in control were to be considered favorable by you and other shareholders.
The pharmaceutical industry is characterized by constant and significant investment in new product development, which can result in rapid technological change. The introduction of new products could substantially reduce our market share or render our products obsolete.
Many of our competitors have significantly greater financial and marketing resources than we do. Additional competitors may enter our markets. The pharmaceutical industry is characterized by constant and significant investment in new product development, which can result in rapid technological change. The introduction of new products could substantially reduce our market share or render our products obsolete.
Global and national economic and other events, including, but not limited to increased inflation, rising interest rates, supply chain disruptions, labor conditions and international conflicts, could affect our future access to liquidity and materially adversely affect our results of operations and financial condition.
These risk factors and uncertainties include, but are not limited to the following: 34 RISKS RELATED TO OUR BUSINESS Global and national economic conditions and events, including, but not limited to increased inflation, rising interest rates, supply chain disruptions, labor conditions, pandemics and public health crises and international conflicts, could affect our future access to liquidity and materially adversely affect our results of operations and financial condition.
We may decide not to commercialize one of our drug candidates once it obtains regulatory approval if we determine that commercialization of that product would require more capital and time than we are willing to invest. 46 Even if any of our drug candidates receives regulatory approval, it could be subject to matters such as post-regulatory surveillance, additional clinical trials or testing, reformulation, changes in labeling, warnings to the public, recall, competition from similar or superior products, and lack of sufficient payor reimbursement by insurance companies or Medicare.
Even if any of our drug candidates receives regulatory approval, it could be subject to matters such as post-regulatory surveillance, additional clinical trials or testing, reformulation, changes in labeling, warnings to the public, recall, competition from similar or superior products, and lack of sufficient payor reimbursement by 44 insurance companies or Medicare.
We have never paid cash dividends on our capital stock. We have never paid cash dividends on our capital stock. The availability of funds for distributions to shareholders will depend on our financial performance and assets.
We have never paid cash dividends on our capital stock. We have never paid cash dividends on our capital stock. The availability of funds for distributions to shareholders will depend on our financial performance and assets. Any future decision to declare or pay dividends will be at the sole discretion of our Board of Directors.
Our strategy is to target differentiated products in specialized markets. However, this strategy does not relieve us from competitive pressures and can entail distinct competitive risks. Certain of our competitors do not aggressively promote their products in our markets. An increase in promotional activity in our markets could result in large shifts in market share, adversely impacting us.
Competitive pressures could reduce our revenues and profits. The pharmaceutical industry is intensely competitive. Our strategy is to target differentiated products in specialized markets. However, this strategy does not relieve us from competitive pressures and can entail distinct competitive risks. Certain of our competitors do not aggressively promote their products in our markets.
Any future decision to declare or pay dividends will be at the sole discretion of our Board of Directors. 56 DEBT-RELATED RISKS Our Revolving Credit Agreement impose restrictive and financial covenants on us. Our failure to comply with these covenants could trigger events that would have a material adverse effect on our business.
DEBT-RELATED RISKS Our Revolving Credit Agreement impose restrictive and financial covenants on us. Our failure to comply with these covenants could trigger events that would have a material adverse effect on our business.
In the longer term, there could be significant new regulatory actions and other events that could limit our activities and investment opportunities or change the functioning of the capital markets, and there is the possibility of a severe worldwide economic downturn. Consequently, we may not be capable of, or successful at, generating positive investment returns or effectively managing risks.
In the longer term, there could be significant new regulatory actions and other events that could limit our activities and investment opportunities or change the functioning of the capital markets, and there is the possibility of a severe worldwide economic downturn. Inflation rates have increased recently to levels not seen in decades.
Additional barriers for competitors seeking to enter the market include the time and cost associated with the development, regulatory approval and manufacturing of a similar product formulation.
We seek to secure and extend marketing exclusivity for our products through a variety of means, including FDA exclusivity and patent rights. Additional barriers for competitors seeking to enter the market include the time and cost associated with the development, regulatory approval and manufacturing of a similar product formulation.
Our employees have been trained to submit accurate and correct pricing information to payors. If, despite the training, our employees provide incorrect or fraudulent information, then we will be subject to various administrative and judicial investigations and litigation. “Formulary” practices of third-party payors could adversely affect our competitive position.
If we cannot obtain adequate reimbursement levels, our business, financial condition and results of operations would be materially and adversely affected. Our employees have been trained to submit accurate and correct pricing information to payors. If, despite the training, our employees provide incorrect or fraudulent information, then we will be subject to various administrative and judicial investigations and litigation.
Our failure to follow FDA rules and guidelines relating to promotion and advertising may cause the FDA to suspend or withdraw an approved product from the market, require a recall or payment of fines, or could result in 44 disgorgement of money, operating restrictions, injunctions or criminal prosecution, any of which could harm our business.
Our failure to follow FDA rules and guidelines relating to promotion and advertising may cause the FDA to suspend or withdraw an approved product from the market, require a recall or payment of fines, or could result in disgorgement of money, operating restrictions, injunctions or criminal prosecution, any of which could harm our business. 42 Our business and operations would suffer in the event of system failures, security breaches, including any cybersecurity incidents, adverse events or other disruptions within our information technology infrastructure at our corporate headquarters; or in the event of intellectual property infringement.
Vaprisol: In 2018, the manufacturer of Vaprisol informed us that they would no longer be able to provide the product following the manufacturing of one final batch which is providing us with a multi-year supply. We are currently working with a new manufacturer to provide us with long term supplies of the product.
With uncertain future cash flows, the Board of Directors approved the write-down of the intangible assets related to the product. Vaprisol: In 2018, the manufacturer of Vaprisol informed us that they would no longer be able to provide the product following the manufacturing of one final batch which is providing us with a multi-year supply.
At this time no assurances can be given that these measures, or subsequent legislative 42 proposals, will not have an adverse effect on our revenues in the future. Future cost control initiatives, legislation, and regulations could decrease the price that we receive for our products, which would limit our revenue and profitability.
At this time no assurances can be given that these measures, or subsequent legislative proposals, will not have an adverse effect on our revenues in the future.
Accordingly, we cannot predict the extent to which our results of operations, financial condition and cash flows will be affected. An adverse development regarding our products could have a material and adverse impact on our future revenues and profitability. Our product portfolio currently includes eight brands: Acetadote, Caldolor, Kristalose, Vaprisol, Omeclamox-Pak, Vibativ, RediTrex and Sancuso.
An adverse development regarding our products could have a material and adverse impact on our future revenues and profitability. Our product portfolio currently includes seven brands: Acetadote, Caldolor, Kristalose, Vaprisol, Omeclamox-Pak, Vibativ and Sancuso.
We may also experience delays associated with future required Phase IV clinical studies potentially resulting from, among other factors, difficulty enrolling patients. Such delays could impact our ability to explore opportunities for label expansion and limit our ability to bring our products to new patient populations.
We may also experience delays associated with future required Phase IV clinical studies potentially resulting from, among other factors, difficulty enrolling patients.
In February 2022, we notified the FDA of a shortage of Vaprisol. If we are unable to produce additional marketable inventory in sufficient quantities, in the required time frame, we could suffer an inability to meet demand for Vaprisol. Vibativ: Through our acquisition of Vibativ, we acquired a multi-year supply of raw material, work in process and finished goods inventory.
We are currently working with a new manufacturer to provide us with long term supplies of the product. In February 2022, we notified the FDA of a shortage of Vaprisol. If we are unable to produce additional marketable inventory in sufficient quantities, in the required time frame, we could suffer an inability to meet demand for Vaprisol.
In 2020, we completed the transfer of Vibativ manufacturing activities to a new supplier. If we are unable to continue to obtain marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Vibativ.
If we are unable to continue to obtain marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Vibativ. Sancuso : As part of the acquisition of Sancuso in January 2022, we obtained an initial supply of finished goods inventory and work in progress.
RISKS RELATING TO INTELLECTUAL PROPERTY Our strategy to secure and extend marketing exclusivity or patent rights may provide only limited or no protection from competition. We seek to secure and extend marketing exclusivity for our products through a variety of means, including FDA exclusivity and patent rights.
These changes may lead to additional costs and increase our overall risk exposure. 48 RISKS RELATING TO INTELLECTUAL PROPERTY Our strategy to secure and extend marketing exclusivity or patent rights may provide only limited or no protection from competition.
Our competitors may sell or develop drugs that are more effective and useful or less costly than ours, and they may be more successful in manufacturing and marketing their products. Many of our competitors have significantly greater financial and marketing resources than we do. Additional competitors may enter our markets.
An increase in promotional activity in our markets could result in large shifts in market share, adversely impacting us. Our competitors may sell or develop drugs that are more effective and useful or less costly than ours, and they may be more successful in manufacturing and marketing their products.
Ongoing global and national events including, but not limited to increased inflation, rising interest rates, supply chain disruptions, labor conditions and the war between Russia and Ukraine, have had a significant adverse impact on economic and market conditions around the world, including the United States.
These conditions have had a significant adverse impact on economic and market conditions around the world, including the United States.
Removed
These risk factors and uncertainties include, but are not limited to the following: 37 RISKS RELATED TO OUR BUSINESS Risks related to the COVID-19 pandemic, natural disasters, public health epidemics, and other events beyond our control may adversely affect our business.
Added
Our business and results of operations could be adversely affected by changes in global or national economic conditions.
Removed
Our business has been adversely impacted by the COVID-19 pandemic which has affected more than 200 countries and has significantly disrupted the day-to-day activities of both individuals and companies. We rely on individuals and third-party organizations around the world to supply components, manufacture and distribute our products, and execute our clinical trials.
Added
These conditions include, but are not limited to, increased inflation, high and rising interest rates, supply chain disruptions, labor conditions, the negative impacts from pandemics and public health crises (including any lingering or recurring adverse impacts from the COVID-19 pandemic) and the negative impacts resulting from the ongoing conflicts in Eastern Europe and the Middle East.
Removed
We have and may continue to experience revenue loss, supply interruptions, time delays and incur unplanned expenses as a result of the impact of the COVID-19 pandemic.
Added
If our costs, in particular costs related to clinical trial expenses and/or employee-related expenses, were to become subject to significant inflationary pressures, it may adversely impact our business, operating results and financial condition. In response to inflationary pressures, the Federal Reserve raised interest rates in 2022 and 2023, and these increases may continue in 2024 and beyond.
Removed
Sancuso : : As part of the acquisition of Sancuso in January 2022, we obtained an initial supply of finished goods inventory and work in progress.
Added
Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks.
Removed
Our business and operations would suffer in the event of system failures, security breaches, including any cybersecurity incidents, adverse events or other disruptions within our information technology infrastructure at our corporate headquarters; or in the event of intellectual property infringement.
Added
Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates continue to rise) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, ongoing effects of the COVID-19 pandemic, the ongoing conflicts in Eastern Europe and the Middle East and employee availability and wage increases.
Removed
We might also seek to sell assets or rights in one or more commercial products or product development programs. Additional capital might not be available to us when we need it.
Added
Vibativ: Through our acquisition of Vibativ, we acquired a multi-year supply of raw material, work in process and finished goods inventory. In 2020, we completed the transfer of Vibativ manufacturing activities to a new supplier.
Added
Specifically, we depend and will continue to depend upon independent investigators and collaborators, such as universities, medical institutions, contract research organizations (CROs) and strategic partners to conduct our preclinical and clinical trials. We negotiate budgets and contracts with CROs and study sites, which may result in delays to our development timelines and increased costs.
Added
We will rely heavily on these third parties over the course of our clinical trials, and we control only certain aspects of their activities.
Added
Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with applicable protocol, legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities.
Added
We and these third parties are required to comply with Good Clinical Practice (GCPs), which are regulations and guidelines enforced by 37 the FDA and comparable foreign regulatory authorities for therapeutic candidates in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.
Added
If we or any of these third parties fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeCET leases approximately 14,200 square feet of office and wet laboratory space in Nashville, Tennessee to operate the CET Life Sciences Center. Cumberland's product formulation and testing laboratories are located at this facility, along with CET's offices. The CET Life Sciences Center also provides laboratory and office space, equipment and infrastructure to early-stage life sciences companies and university spin-outs.
Biggest changeDuring 2023, Cumberland exercised the 2nd Extension option to extend the lease for five more years though April 2028. CET leases approximately 14,200 square feet of office and wet laboratory space in Nashville, Tennessee to operate the CET Life Sciences Center. Cumberland’s product formulation and testing laboratories are located at this facility, along with CET’s offices.
Item 2. Properties. As of December 31, 2022, we leased approximately 16,903 rentable square feet of space at the new Broadwest development in Nashville, Tennessee for our corporate headquarters. The lease commencement date occurred in October 2022 with a term of 157 months leased through November 2035.
Item 2. Properties. As of December 31, 2023, we leased approximately 16,903 rentable square feet of space at the new Broadwest development in Nashville, Tennessee for our corporate headquarters. The lease commencement date occurred in October 2022 with a term of 157 months leased through November 2035.
We believe these facilities are adequate to meet our current needs for office space. Manufacturing, packaging or warehousing services are provided to us through contracts with third-party organizations. The laboratory space at CET, under an agreement amended in July 2012, is leased through April 2023, with an option to extend the lease through April 2028.
We believe these facilities are adequate to meet our current needs for office space. Manufacturing, packaging or warehousing services are provided to us through contracts with third-party organizations. The laboratory space at CET, under an agreement amended in July 2012, is now leased through April 2028.
Added
The CET Life Sciences Center also provides laboratory and office space, equipment and infrastructure to early-stage life sciences companies and university spin-outs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny future decision to declare or pay dividends will be at the sole discretion of our Board of Directors. 58 Performance Graph The stock performance graph below illustrates a comparison of the total cumulative stockholder return on our common stock since December 31, 2017 to the Nasdaq Composite and a composite of eleven Nasdaq Pharmaceutical and Specialty Pharmaceutical Stocks which most closely compare to our Company - Avadel Pharmaceuticals plc, Harrow Health, Inc., Eagle Pharmaceuticals, Inc., Assertio Holdings, Inc., HLS Therapeutics, EyePoint Pharmaceuticals, Inc., Eton Pharmaceuticals, Inc., Theratechnologies Inc., Impel Pharmaceuticals Inc., Acorda Therapeutics Inc. and AcelRX Pharmaceuticals, Inc.
Biggest changePerformance Graph The stock performance graph below illustrates a comparison of the total cumulative stockholder return on our common stock since December 31, 2018 to the Nasdaq Composite and a composite of ten Nasdaq Pharmaceutical and Specialty Pharmaceutical Stocks which most closely compare to our Company - Avadel Pharmaceuticals plc, Harrow Health, Inc., Eagle Pharmaceuticals, Inc., Assertio Holdings, Inc., HLS Therapeutics Inc., EyePoint Pharmaceuticals, Inc., Eton Pharmaceuticals, Inc., Theratechnologies Inc., Acorda Therapeutics Inc. and Talphera, Inc.
The graph assumes an initial investment of $100 on December 31, 2017, and that all dividends were reinvested. Purchases of Equity Securities The Company currently has a share repurchase program to repurchase up to $10.0 million of our common stock pursuant to Rule 10b-18 of the Securities Exchange Act of 1934, as amended.
The graph assumes an initial investment of $100 on December 31, 2018, and that all dividends were reinvested. 58 Purchases of Equity Securities The Company currently has a share repurchase program to repurchase up to $10.0 million of our common stock pursuant to Rule 10b-18 of the Securities Exchange Act of 1934, as amended.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock, no par value, has been traded on the Nasdaq Global Select Market since August 11, 2009 under the symbol “CPIX.” As of March 7, 2023, we had 89 shareholders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock, no par value, has been traded on the Nasdaq Global Select Market since August 11, 2009 under the symbol “CPIX.” As of March 8, 2024, we had 97 shareholders of record of our common stock.
This excludes shareholders whose shares are held by brokers and other institutions on behalf of shareholders. The closing price of our common stock on the Nasdaq Global Select Market on March 7, 2023 was $2.31 per share. Dividend Policy We have not declared or paid any cash dividends on our common stock.
This excludes shareholders whose shares are held by brokers and other institutions on behalf of shareholders. The closing price of our common stock on the Nasdaq Global Select Market on March 8, 2024 was $2.03 per share. 57 Dividend Policy We have not declared or paid any cash dividends on our common stock.
In January 2019, the Company's Board of Directors established the current $10.0 million repurchase program to replace the prior authorizations. We repurchased 367,793 shares and 438,359 shares of common stock for approximately $1.0 million and $1.4 million, and during the years ended December 31, 2022 and 2021, respectively.
In January 2019, the Company’s Board of Directors established the current $10.0 million repurchase program to replace the prior authorizations. We repurchased 402,143 shares and 367,793 shares of common stock for approximately $0.7 and $1.0 million during the years ended December 31, 2023 and 2022, respectively.
The following table summarizes the activity, by month, during the fourth quarter of 2022: 59 Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 21,887 $2.52 21,887 $3,882,881 November 36,240 (1) $2.05 36,240 $3,808,415 December 19,094 $2.86 19,094 $3,753,797 Total 77,221 (1) Of this amount, 4,925 shares were repurchased directly in private purchases at the then-current fair market value of common stock.
The following table summarizes the activity, by month, during the fourth quarter of 2023: Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 28,114 $2.04 28,114 $3,135,727 November 50,220 (1) $1.81 50,220 $3,044,578 December 21,359 (2) $1.83 21,359 $3,005,385 Total 99,693 (1) Of this amount, 25,000 shares were repurchased directly in private purchases at the then-current fair market value of common stock.
Added
Any future decision to declare or pay dividends will be at the sole discretion of our Board of Directors.
Added
(2) Of this amount, 971 shares were repurchased directly in private purchases at the then-current fair market value of common stock. Item 6. Reserved. None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

44 edited+17 added−24 removed32 unchanged
Biggest changeFair value is determined through various valuation techniques including quoted market prices, third-party independent appraisals and discounted cash flow models, as considered necessary. 64 RESULTS OF OPERATIONS Year ended December 31, 2022 compared to year ended December 31, 2021 The following table presents the statements of operations for the years ended December 31, 2022 and 2021: Years ended December 31, 2022 2021 Change Net revenues $ 42,010,949 $ 35,985,043 $ 6,025,906 Costs and expenses: Cost of products sold 9,118,521 8,811,248 307,273 Selling and marketing 16,660,945 15,015,424 1,645,521 Research and development 6,688,924 5,684,465 1,004,459 General and administrative 10,180,120 9,780,026 400,094 Amortization 5,067,368 4,371,300 696,068 Total costs and expenses 47,715,878 43,662,463 4,053,415 Operating income (loss) (5,704,929) (7,677,420) 1,972,491 Interest income 98,405 26,081 72,324 Other income - gain on insurance proceeds 611,330 — 611,330 Other income — 2,187,140 (2,187,140) Interest expense (585,995) (98,031) (487,964) Income (loss) before income taxes (5,581,189) (5,562,230) (18,959) Income tax (expense) benefit (68,850) (34,891) (33,959) Net income (loss) from continuing operations $ (5,650,039) $ (5,597,121) $ (52,918) The following table summarizes net revenues for the years presented: Years ended December 31, 2022 2021 Change Products: Kristalose $ 15,205,155 $ 15,993,658 $ (788,503) Sancuso 13,205,603 — 13,205,603 Vibativ 7,487,462 11,704,062 (4,216,600) Caldolor 4,827,200 4,970,301 (143,101) Acetadote 501,040 850,993 (349,953) Omeclamox-Pak 29,145 (388,657) 417,802 Vaprisol (447,697) 1,859,581 (2,307,278) RediTrex (126,726) 55,321 (182,047) Other 1,329,767 939,784 389,983 Total net revenues $ 42,010,949 $ 35,985,043 $ 6,025,906 Net revenues.
Biggest changeFair value is determined through various valuation techniques including quoted market prices, third-party independent appraisals and discounted cash flow models, as considered necessary. 64 RESULTS OF OPERATIONS Year ended December 31, 2023 compared to year ended December 31, 2022 The following table presents the statements of operations for the years ended December 31, 2023 and 2022: Years ended December 31, 2023 2022 Change Net revenues $ 39,552,507 $ 42,010,949 $ (2,458,442) Costs and expenses: Cost of products sold 6,066,611 9,118,521 (3,051,910) Selling and marketing 18,451,765 16,660,945 1,790,820 Research and development 5,834,229 6,688,924 (854,695) General and administrative 10,651,915 10,180,120 471,795 Amortization and impairment 8,102,648 5,067,368 3,035,280 Total costs and expenses 49,107,168 47,715,878 1,391,290 Operating loss (9,554,661) (5,704,929) (3,849,732) Interest income 286,854 98,405 188,449 Other income 2,828,871 — 2,828,871 Other income - settlement 475,000 — 475,000 Other income - insurance proceeds 346,800 611,330 (264,530) Interest expense (667,861) (585,995) (81,866) Loss before income taxes (6,284,997) (5,581,189) (703,808) Income tax (expense) benefit (45,769) (68,850) 23,081 Net loss $ (6,330,766) $ (5,650,039) $ (680,727) The following table summarizes net revenues for the years presented: Years ended December 31, 2023 2022 Change Products: Kristalose $ 15,981,850 $ 15,205,155 $ 776,695 Vibativ 8,812,692 7,487,462 1,325,230 Sancuso 8,096,788 13,205,603 (5,108,815) Caldolor 4,333,923 4,827,200 (493,277) Acetadote 458,759 501,040 (42,281) Omeclamox-Pak 20,030 29,145 (9,115) Vaprisol 151,336 (447,697) 599,033 RediTrex (341,886) (126,726) (215,160) Other 2,039,015 1,329,767 709,248 Total net revenues $ 39,552,507 $ 42,010,949 $ (2,458,442) Net revenues.
We establish them using our best estimate at the time of sale based on: • Each product’s historical experience adjusted to reflect known changes in the factors that impact such allowances; • The contractual terms with direct and indirect customers; • Analyses of historical levels of chargebacks, discounts and returns of product; • Communications with customers; • Purchased information about the rate of prescriptions being written and the level of inventory remaining in the distribution channel, if known; and • Expectations about the market for each product, including any anticipated introduction of competitive products.
We establish them using our best estimate at the time of sale based on: • Each product’s historical experience adjusted to reflect known changes in the factors that impact such allowances; • The contractual terms with direct and indirect customers; • Analyses of historical levels of chargebacks, discounts and returns of product; • Communications with customers; 62 • Purchased information about the rate of prescriptions being written and the level of inventory remaining in the distribution channel, if known; and • Expectations about the market for each product, including any anticipated introduction of competitive products.
The Company’s accounting policy with respect to interest and penalties arising from income tax settlements is to recognize them as part of the provision for income taxes. Share-Based Payments We recognize compensation expense for all share-based payments based on the fair value of the award on the date of grant.
The Company’s accounting policy with respect to interest and penalties arising from income tax settlements is to recognize them as part of the provision for income taxes. 63 Share-Based Payments We recognize compensation expense for all share-based payments based on the fair value of the award on the date of grant.
Cash used in investing activities of $13.7 million was the result of the acquisition of Sancuso of $13.5 million, additions to intangibles of $2.0 million, additions to property and equipment of $0.1 million and the proceeds of officer life insurance proceeds of $0.9 million.
Cash used in investing activities of $13.7 million was the result of the acquisition of Sancuso of $13.5 68 million, additions to intangibles of $2.0 million, additions to property and equipment of $0.1 million and the proceeds of officer life insurance proceeds of $0.9 million.
You should review the “Risk Factors” section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements described in the following discussion and analysis. 60 EXECUTIVE SUMMARY We are a specialty pharmaceutical company focused on the acquisition, development and commercialization of branded prescription pharmaceutical products.
You should review the “Risk Factors” section of this Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements described in the following discussion and analysis. 59 EXECUTIVE SUMMARY We are a specialty pharmaceutical company focused on the acquisition, development and commercialization of branded prescription pharmaceutical products.
The contingent consideration liability represents the fair value of the royalty payments of up to 20% of future net sales as part of the Vibativ acquisition. 4. The contingent consideration liability represents the fair value of the royalty payments of up to 10% of future net sales as part of the Sancuso acquisition. 5.
The contingent consideration liability represents the fair value of the royalty payments of up to 20% of future net sales as part of the Vibativ acquisition. 69 4. The contingent consideration liability represents the fair value of the royalty payments of up to 10% of future net sales as part of the Sancuso acquisition. 5.
The estimated inventory obsolescence amounts are calculated based upon specific review of the inventory expiration dates and the quantity on-hand at December 31, 2022, in comparison to our expected inventory usage. The amount of actual inventory obsolescence and unmarketable inventory could differ 63 (either higher or lower) in the near term from the estimated amounts.
The estimated inventory obsolescence amounts are calculated based upon specific review of the inventory expiration dates and the quantity on-hand at December 31, 2023, in comparison to our expected inventory usage. The amount of actual inventory obsolescence and unmarketable inventory could differ (either higher or lower) in the near term from the estimated amounts.
At December 31, 2022 and December 31, 2021, all our investments had original maturities of less than ninety days and as a result were classified as cash equivalents.
At December 31, 2023 and December 31, 2022, all our investments had original maturities of less than ninety days and as a result were classified as cash equivalents.
Of the accounts receivable allowances and our sales related accruals, our accrual for product returns and rebates represents the majority of the balance. Sales related accrued liabilities for rebates, product returns, service fees, and administrative fees totaled $8.3 million and $3.7 million as of December 31, 2022 and 2021 , respectively.
Of the accounts receivable allowances and our sales related accruals, our accrual for product returns and rebates represents the majority of the balance. Sales related accrued liabilities for rebates, product returns, service fees, and administrative fees totaled $7.6 million and $8.3 million as of December 31, 2023 and 2022 , respectively.
Changes in our estimates would be recorded in our statement of operations in the period of the change. Non-current inventories consist of API which typically has an extended life and selected finished good products with extended life longer than one year. Income Taxes We provide for deferred taxes using the asset and liability approach.
Changes in our estimates would be recorded in our statement of operations in the period of the change. Non-current inventories consist of active pharmaceutical ingredients which typically has an extended life and selected finished good products with extended life longer than one year. Income Taxes We provide for deferred taxes using the asset and liability approach.
Companies will have to disclose additional information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the ASU’s provisions as a cumulative-effect adjustment, if any, to retained earnings as of the beginning of the first reporting period in which the guidance is adopted.
Companies will have to disclose additional information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the ASU’s provisions as a cumulative-effect adjustment, if any, to accumulated deficit as of the beginning of the first reporting period in which the guidance is adopted.
Our marketing and sales organization is responsible for our commercial activities, and we work closely with our distribution partners to ensure the availability of our brands. 2022 Highlights Below is a list of our company’s highlights from 2022.
Our marketing and sales organization is responsible for our commercial activities, and we work closely with our distribution partners to ensure the availability of our brands. 60 2023 Highlights Below is a list of our Company’s highlights from 2023.
RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements - Not Yet Adopted In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses,” which changes the impairment model for most financial assets and certain other instruments.
RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses,” which changes the impairment model for most financial assets and certain other instruments.
We base our estimates on past experience and on other factors we deem reasonable given the circumstances. Past results help form the basis of our judgments about the carrying value of assets and liabilities that are not determined from other sources. Actual results could differ from these estimates.
We base our estimates on past experience and on other factors we deem reasonable given the circumstances. Past results help form the basis of our judgments about the carrying value of assets and liabilities that cannot be determined from other sources. Actual results could differ from these estimates.
Other revenue, which is a component of net revenues, includes non-refundable upfront payments and milestone payments under licensing agreements along with grant and rental income. Other revenue was approximately 3.2% percent of net revenues in 2022 and 2.6% in 2021.
Other revenue, which is a component of net revenues, includes non-refundable upfront payments and milestone payments under licensing agreements along with grant and rental income. Other revenue was approximately 5.2% percent of net revenues in 2023 and 3.2% in 2022.
A change in our rebate estimate of one percentage point would have impacted net sales by approximately $0.6 million and $0.4 million for the year ended December 31, 2022 and 2021, respectively. A change in our product return estimate of one percentage point would have impacted net sales by $0.4 million for the years ended December 31, 2022 and 2021.
A change in our rebate estimate of one percentage point would have impacted net sales by approximately $0.6 million for the years ended December 31, 2023 and 2022. A change in our product return estimate of one percentage point would have impacted net sales by $0.4 million for the years ended December 31, 2023 and 2022.
In addition to these commercial brands, we have Phase II clinical programs underway evaluating our ifetroban product candidate for patients with 1) cardiomyopathy associated with Duchenne Muscular Dystrophy , a fatal, genetic neuromuscular disease, 2) Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by fibrosis of the skin and internal organs and 3) Aspirin-Exacerbated Respiratory Disease , a severe form of asthma.
In addition to these commercial brands, we have Phase II clinical programs underway evaluating our ifetroban product candidate for patients with 1) cardiomyopathy associated with Duchenne Muscular Dystrophy, a fatal, genetic neuromuscular disease and 2) Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by fibrosis of the skin and internal organs.
Of these amounts, our estimated liability for fee for services represented $1.5 million and $1.0 million, respectively, while our accrual for product returns totaled $2.7 million and $1.9 million, respectively.
Of these amounts, our estimated liability for fee for services represented $1.4 million and $1.5 million, respectively, while our accrual for product returns totaled $2.6 million and $2.7 million, respectively.
The Broadwest contractual cash obligation began upon commencement in October 2022. 70 OFF-BALANCE SHEET ARRANGEMENTS During 2022 and 2021 we did not engage in any off-balance sheet arrangements.
The Broadwest contractual cash obligation began upon commencement in October 2022 and CET began May 2023. OFF-BALANCE SHEET ARRANGEMENTS During 2023 and 2022 we did not engage in any off-balance sheet arrangements.
These amounts are based on the $16.2 million line of credit assuming the current $16.2 million balance outstanding on December 31, 2022 is consistently outstanding through maturity of October 2024. Interest and unused line of credit payments are due and payable quarterly in arrears. 3.
These amounts are based on the $12.8 million line of credit assuming the current $12.8 million balance outstanding on December 31, 2023 is consistently outstanding through maturity of October 2026. Interest and unused line of credit payments are due and payable quarterly in arrears. 3.
General and administrative . General and administrative expenses for the year ended December 31, 2022, were $10.2 million compared to $9.8 million in the prior year.
General and administrative expenses for the year ended December 31, 2023, were $10.7 million compared to $10.2 million in the prior year.
Certain eligibility requirements must be met and the election must be applied on an instrument-by-instrument basis. The election is not available for either available-for-sale or held-to-maturity debt securities. We adopted both ASU 2016-13 and ASU 2019-05 on January 1, 2023.
Certain eligibility requirements must be met and the election must be applied on an instrument-by-instrument basis. The election is not available for either available-for-sale or held-to-maturity debt securities. We adopted both ASU 2016-13 and ASU 2019-05 on January 1, 2023. The adoption of ASU 2016-13 and ASU 2019-05 did not have a material impact on the Company’s consolidated financial statements.
A portion of our research and development costs is variable based on the number of trials, study sites, number of patients and the cost per patient in each of our clinical programs. We continue to fund our ongoing clinical initiatives associated with our pipeline products. During 2022, we also experienced an increase in our annual FDA user fees.
A portion of our research and development costs is variable based on the number of trials, study sites, number of patients and the cost per patient in each of our clinical programs. We continue to fund our ongoing clinical initiatives associated with our pipeline products. General and administrative .
The following table summarizes our liquidity and working capital as of the years ended December 31: 2022 2021 Cash and cash equivalents $ 19,757,970 $ 27,040,816 Total cash and cash equivalents $ 19,757,970 $ 27,040,816 Working capital (current assets less current liabilities) $ 17,290,378 $ 26,409,053 Current ratio (multiple of current assets to current liabilities) 1.6 2.4 Revolving line of credit availability $ 3,800,000 $ 5,000,000 The following table summarizes our net changes in cash and cash equivalents for the years ended December 31: 2022 2021 Cash provided by (used in): Operating activities $ 8,453,396 $ 6,342,443 Investing activities (13,674,456) (501,893) Financing activities (2,061,786) (3,553,530) Net (decrease) increase in cash and cash equivalents $ (7,282,846) $ 2,287,020 The net $7.3 million decrease in cash and cash equivalents for the year ended December 31, 2022, was attributable to cash provided by operating activities offset by cash used in investing and financing activities.
The following table summarizes our liquidity and working capital as of the years ended December 31: 2023 2022 Cash and cash equivalents $ 18,321,624 $ 19,757,970 Total cash and cash equivalents $ 18,321,624 $ 19,757,970 Working capital (current assets less current liabilities) $ 7,732,161 $ 17,290,378 Current ratio (multiple of current assets to current liabilities) 1.3 1.6 Revolving line of credit availability $ 7,215,856 $ 3,800,000 The following table summarizes our net changes in cash and cash equivalents for the years ended December 31: 2023 2022 Cash provided by (used in): Operating activities $ 6,093,821 $ 8,453,396 Investing activities (105,695) (13,674,456) Financing activities (7,424,472) (2,061,786) Net decrease in cash and cash equivalents $ (1,436,346) $ (7,282,846) The net $1.4 million decrease in cash and cash equivalents for the year ended December 31, 2023, was attributable to cash provided by operating activities offset by cash used in investing and financing activities.
Research and development . Research and development costs for the year ended December 31, 2022, were $6.7 million, compared to $5.7 million last year, representing an increase of $1.0 million.
Research and development costs for the year ended December 31, 2023, were $5.8 million, compared to $6.7 million last year, representing a decrease of $0.9 million due to reduced FDA fees.
Acetadote revenue included net sales of our branded product and our share of net sales from our Authorized Generic. For the year ended December 31, 2022, the Acetadote net revenue decreased $0.3 million compared to the prior year due to an increase in expired product returns in 2022.
Acetadote revenue included net sales of our branded product and our share of net sales from our Authorized Generic. For the year ended December 31, 2023, the Acetadote net revenue was $0.5 million, similar to the prior year period.
Our financial statements reflect accounts receivable allowances of $0.6 million and $0.3 million at December 31, 2022 and 2021, respectively, for chargebacks and early pay discounts for products. 62 The following table reflects our sales-related accrual activity for the periods indicated below: 2022 2021 Balance, January 1 $ 3,680,677 $ 4,063,435 Current provision 24,426,431 12,127,410 Actual product returns and credits issued (19,759,894) (12,510,168) Balance, December 31 $ 8,347,214 $ 3,680,677 The allowances for chargebacks and discounts and sales related accruals for rebates, fee for service and product returns are determined on a product-by-product basis.
The following table reflects our sales-related accrual activity for the periods indicated below: 2023 2022 Balance, January 1 $ 8,347,214 $ 3,680,677 Current provision 22,184,661 24,426,431 Actual product returns and credits issued (22,952,092) (19,759,894) Balance, December 31 $ 7,579,783 $ 8,347,214 The allowances for chargebacks and discounts and sales related accruals for rebates, fee for service and product returns are determined on a product-by-product basis.
The change resulted from an increase in insurance expenses. 66 The components of the statements of operations discussed above reflect the following impacts from Vibativ: Financial Impact of Vibativ Years ended December 31, 2022 2021 Net revenue (1) $ 7,637,462 $ 11,704,062 Cost of products sold (2) 3,535,851 4,814,464 Royalty and operating expenses 83,145 2,011,458 Vibativ contribution $ 4,018,466 $ 4,878,140 (1) 2022 net revenue includes a $150,000 payment to Cumberland required under the terms of a new licensee agreement.
The change resulted from an increase in hiring costs and deferred compensation expenses. 66 The components of the statements of operations discussed above reflect the following impacts from Vibativ: Financial Impact of Vibativ Years ended December 31, 2023 2022 Net revenue (1) $ 9,812,692 $ 7,637,462 Cost of products sold (2) 1,423,399 3,535,851 Royalty and operating expenses 2,379,939 83,145 Vibativ contribution $ 6,009,354 $ 4,018,466 (1) 2023 net revenue includes a $1,000,000 payment to Cumberland related to a settlement agreement of milestone payments.
Cash used in investing activities of $0.5 million was the result of additions to intangibles of $0.3 million, additions to property and equipment of $0.1 million and the payment of $0.2 million to the WHC joint venture.
Cash used in investing activities of $0.1 million was the result of additions of intangibles and property and equipment offset by life insurance proceeds received.
Selling and marketing expense for the year ended December 31, 2022, were $16.7 million compared to $15.0 million in the prior year, which was an increase of $1.6 million. This increase was primarily a result of an increase in marketing expenses associated with the Sancuso acquisition including royalty costs, promotional spending and the cost associated with our new Oncology division.
This increase was primarily a result of an increase in marketing expenses associated with the Sancuso acquisition including royalty costs, promotional spending and the cost associated with our expanded Oncology division. Research and development .
Income taxes totaled $68,850 for the year ended December 31, 2022, and $34,891 for the year ended December 31, 2021. 67 LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity are cash flows provided by our operations, the amounts borrowed and available under our line of credit and the cash proceeds from our initial public offering of common stock that was completed in August 2009.
In addition, in 2023 we recognized a gain of $0.5 million to settle a manufacturing dispute and a gain of $0.3 million for a payout earned on a company owned insurance policy. 67 LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity are cash flows provided by our operations, the amounts borrowed and available under our line of credit and the cash proceeds from our initial public offering of common stock that was completed in August 2009.
The net $2.3 million increase in cash and cash equivalents for the year ended December 31, 2021, was attributable to cash provided by operating activities partially offset by cash used in investing and financing activities. 68 Cash provided by operating activities of $6.3 million includes a reduction of inventory of $4.8 million, most of which was Vibativ related, and cash payments received of $2.0 million provided by discontinued operations.
The net $7.3 million decrease in cash and cash equivalents for the year ended December 31, 2022, was attributable to cash provided by operating activities offset by cash used in investing and financing activities.
The components of the statements of operations discussed above reflect the following impacts from Sancuso: Financial Impact of Sancuso Years ended December 31, 2022 2021 Net revenue (1) $ 13,555,603 $ — Cost of products sold (2) 1,543,600 — Royalty and operating expenses 4,202,026 — Sancuso contribution $ 7,809,977 $ — (1) 2022 net revenue includes a $250,000 payment to Cumberland required under the terms of a new licensee agreement and a $100,000 payment to Cumberland required under a sales representation agreement.
The components of the statements of operations discussed above reflect the following impacts from Sancuso: Financial Impact of Sancuso Years ended December 31, 2023 2022 Net revenue $ 8,096,788 $ 13,555,603 Cost of products sold (1) 1,214,826 1,543,600 Royalty and operating expenses 3,375,823 4,202,026 Sancuso contribution $ 3,506,139 $ 7,809,977 (1) The Sancuso inventory included in the costs of product sold during the period was acquired and paid for by Cumberland as part of the acquisition of the brand during 2022.
This $4.2 million decline in net revenue was a result higher sales volume for the product in 2021 associated in part with wholesale stocking of our new packaged product. Caldolor revenue experienced a 2.9% decrease to $4.8 million during the year ended December 31, 2022, compared to $5.0 million in the same period last year.
This decrease in net revenue was primarily a result of an inordinate amount of product returns and higher commercial rebates. Caldolor revenue was $4.3 million during the year ended December 31, 2023, compared to $4.8 million in the same period last year.
We are dedicated to providing innovative products that improve the quality of care for patients and address poorly met medical needs. Our commercial portfolio includes eight branded products approved for marketing by the U.S. Food and Drug Administration (“FDA”).
We are dedicated to our mission of working together to provide unique products that improve the quality of patient care. Our commercial portfolio includes seven branded products approved for marketing by the FDA.
This increase was offset by decreased net sales of Vibativ and Vaprisol. 65 Kristalose revenue declined by $0.8 million, or (4.9)%, compared to December 31, 2021, primarily as a result of timing of sales of our shipments to one of our co-promotion partners. Vibativ revenue was $7.5 million compared to $11.7 million in the prior year.
These increases were mainly offset by decreased net product sales of Sancuso and Caldolor. 65 Kristalose revenue increased by $0.8 million, or 5.1%, compared to December 31, 2022, primarily as a result of increased shipments of the product.
Our financing activities included payments of $2.2 million of contingent consideration for Vibativ and $1.4 million in cash used to repurchase shares of our common stock. Shelf Registration In November 2017, the Company filed its Shelf Registration on Form S-3 with the SEC associated with the sale of up to $100 million in corporate securities.
Our financing activities included payments of $3.3 million of contingent consideration for Vibativ and Sancuso, a pay down on our line of credit of $3.4 and $0.7 million in cash used to repurchase shares of our common stock.
The Company filed an updated Form S-3 with the SEC in December 2020, which was declared effective in January 2021. On December 27, 2021, the Company filed a related prospectus supplement in connection with the sale and issuance of shares having an aggregate gross sales price of up to $19 million.
Shelf Registration In December 2023, the Company filed a Shelf Registration on Form S-3 with the SEC associated with the sale of up to $100 million in corporate securities which also was declared effective in December 2023.
The Company accounted for the forgiveness of the PPP loan under IAS 20 and recorded the $2,187,140 as other income. Minimum Product Purchase Requirements Our manufacturing and supply agreements do not require minimum annual purchase obligations.
Minimum Product Purchase Requirements Our manufacturing and supply agreements do not require minimum annual purchase obligations.
Net revenues for the year ended December 31, 2022, were approximately $42.0 million compared to $36.0 million for the year ended December 31, 2021, representing an increase of $6.0 million or 16.7%. Net revenue increased during the 2022 period as a result of our newest product Sancuso which contributed net revenue of $13.2 million.
Net revenues for the year ended December 31, 2023, were approximately $39.6 million compared to $42.0 million for the year ended December 31, 2022. As detailed in the table above, net revenue increased during 2023 for two of our marketed products: Kristalose and Vibativ.
The Company did not issue any shares under this ATM during the year ended December 31, 2022.
The Company intends to enter into an At the Market Sales Agreement in March 2024, in order to allow the Company to sell shares at market prices. The Company did not issue any shares under its ATM program during the year ended December 31, 2023.
Our 2022 gross wholesale revenue increased by $0.4 million, but the revenue growth was offset by expired product returns. Cost of products sold . Cost of products sold for the year ended December 31, 2022, were $9.1 million compared to $8.8 million in the prior year.
Other revenue increased due to the litigation settlement based on two $500,000 milestone payments due to us for the license associated with our Vibativ product. Cost of products sold . Cost of products sold for the year ended December 31, 2023, were $6.1 million compared to $9.1 million in the prior year, a decrease of $3.1 million.
(2) The Sancuso inventory included in the costs of product sold during the period was acquired and paid for by Cumberland as part of the acquisition of the brand during 2022. Amortization. Amortization expenses represent the ratable use of our capitalized intangible assets including product and license rights, patents, trademarks and patent defense costs.
Amortization and impairment. Amortization and impairment expenses represent the ratable use of our capitalized intangible assets including product and license rights, patents, trademarks and patent defense costs. Amortization and impairment for 2023 totaled approximately $8.1 million which is an increase of $3.0 million due to a $3.3 million write down of our Omeclamox intangible assets. Income taxes .
Omeclamox-Pak revenue increased $0.4 million during the year ended December 31, 2022, compared to the prior year. The increase was due to favorable sales adjustments and ownership changes at our packager which resulted in a temporary out of stock situation. Reditrex revenue decreased $0.2 million in 2022 compared to 2021.
Omeclamox-Pak had no sales for the year ended December 31, 2023, as Cumberland is currently out of commercial inventory of this product. The packager for our Omeclamox-Pak product encountered financial difficulties and currently is under new management and is reorganizing. Reditrex revenue decreased $0.2 million in 2023 compared to 2022. We discontinued sale of the product in 2023. Other Revenue.
Removed
For more information, please see Part I, Item I, Business , of this Form 10-K. • Acquired the U.S. rights to the FDA-approved oncology-supportive care medicine Sancuso ® from Kyowa Kirin, Inc., the U.S. affiliate of Japan-based Kyowa Kirin Co., Ltd. • Formed a specialty sales division, Cumberland Oncology, to support Sancuso.
Added
We are also developing an oral capsule to treat Idiopathic Pulmonary Fibrosis, the most common form of progressive fibrosing interstitial lung disease. Following FDA clearance of our Investigational New Drug application in May 2023, we are in the process of initiating our Phase II study in patients in centers of excellence across the U.S.
Removed
To augment those efforts, we also entered into a co-promotion agreement to feature Sancuso through another national oncology sales organization. • Launched Vibativ ® in Puerto Rico, through a partnership with Verity Pharmaceuticals, who has a particular strength and experience in that market. • Announced a new partnership with Saudi Arabia-based Tabuk Pharmaceutical Manufacturing Co., a fully owned subsidiary of the Astra Industrial Group, to introduce Vibativ in the Middle East. • Signed a new agreement with Laboratorios Pisa, S.A. de C.V. for the exclusive supply and distribution of Caldolor ® , Cumberland’s ibuprofen injection product, in Mexico. • Entered into two amendments to our agreement with Nordic Group B.V. who had provided us with a license for the U.S. rights associated with our RediTrex ® line.
Added
For more information, please see Part I, Item I, Business of this Form 10-K. • Announced our newly refined mission statement: Working together to provide unique products that improve the quality of patient care. • Obtained FDA approval for our Caldolor ® product, to include its use in infants.
Removed
Pursuant to the amendment, in exchange for financial consideration, Nordic may assume responsibility for distributing the methotrexate products in the U.S. after June 30, 2023. 61 • Announced the relocation of our headquarters into new offices located on the Broadwest campus in the Vanderbilt/West End corridor of Nashville, which will allow us to accommodate our expected growth and better serve our international base of customers and partners. • Named Martin S.
Added
The non-narcotic agent may now be administered for the treatment of pain and fever in patients 3 to 6 months of age.
Removed
Brown Jr. to our Board of Directors. Mr. Brown is an attorney with over 30 years of corporate law experience who brings significant legal, public company, health care and civic experience to our board.
Added
With this newly approved labeling, Caldolor is the only non-opioid product approved to treat pain in infants that is delivered through injection. • Shared the publication of positive results from a clinical study investigating the safety and pharmacokinetics of Caldolor in newborns.
Removed
The Company relies on several law firms for legal advice, including the firm in which Martin is affiliated. • Released our third annual Sustainability Report, which details the company’s activities pertaining to our environmental, social and governance matters. • Modified our line of credit with Pinnacle Bank, which provides for a remaining three-year facility for up to $20 million which ends in October 2024. • Continued our corporate share repurchase initiative, with a group of our board members also purchasing shares through Rule 10b5-1 trading plans in order to add to their holdings in the company.
Added
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. • 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.
Removed
CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES Accounting Estimates and Judgments The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.
Added
The results of the study suggest that a single dose of Vibativ is safe in children. • Completed the Sancuso ® transition from Kyowa Kirin to Cumberland, including the NDA transfer, and initiation of the product’s manufacture at a new facility.
Removed
These estimates, judgments and assumptions are most critical with respect to our accounting for revenue recognition, inventory, intangible assets and goodwill, research and development accounting, contingent consideration liability, provision for income taxes and share-based payments. Revenue Recognition We recognize revenue in accordance with the Accounting Standards Codification (ASC) Topic 606.
Added
We also expanded our oncology sales division to further support the brand. • Helped advance the submissions for the approval of Vibativ in China, South Korea and Saudi Arabia. • Completed the transition of our former RediTrex ® product to Nordic Pharma. • Obtained FDA clearance of the Investigational New Drug application for a new ifetroban Phase II program in patients with Idiopathic Pulmonary Fibrosis, the most common form of progressive fibrosing interstitial lung disease. • Shared our fourth annual Sustainability Metrics, which detail the Company’s activities pertaining to our environmental, social and governance matters. • Entered into a new revolving credit loan agreement with Pinnacle Bank for a $20 million facility, expandable to $25 million over a three-year term. • Continued our corporate share repurchase initiative, with a group of our board members also purchasing shares through Rule 10b5-1 trading plans in order to add to their holdings in the Company. 61 CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES Accounting Estimates and Judgments The preparation of condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.
Removed
This decrease in Caldolor revenue for the year ended December 31, 2022, w as the result of the timing of international shipments. Vaprisol revenue decreased $2.3 million during the year ended December 31, 2022, compared to the prior year period due primarily to a temporary out of stock situation associated with a change in manufacturers.
Added
The Company’s most significant estimates include: (1) its allowances for chargebacks and accruals for rebates and product returns, (2) the allowances for obsolescent or unmarketable inventory, (3) valuation of contingent consideration liabilities associated with business combinations and (4) valuation of continuing utility of intangible assets. Revenue Recognition We recognize revenue in accordance with the Accounting Standards Codification (ASC) Topic 606.
Removed
As a percentage of net revenues, cost of products sold were 21.7% compared to 24.5% during the prior year. This change in costs of products sold as a percentage of revenue was attributable to a change in the product sales mix, particularly the addition of our Sancuso sales. Selling and marketing .
Added
Our financial statements reflect accounts receivable allowances of $0.6 million at December 31, 2023 and 2022, for chargebacks and early pay discounts for products.
Removed
Amortization for 2022 totaled approximately $5.1 million which is an increase of $0.7 million due to the addition of Sancuso. Income taxes .
Added
Vibativ revenue increased to $8.8 million for the year ended December 31, 2023, compared to $7.5 million in the same prior year period. The increase of $1.3 million, or 17.7%, reflected fewer product returns in the current year. Sancuso revenue was $8.1 million compared to $13.2 million in the prior year.
Removed
The Shelf Registration was declared effective in January 2018. It also included an At the Market ("ATM") feature that allows the Company to sell common shares at market prices, along with an agreement with B. Riley FBR Inc. to support such a placement of shares.
Added
This decrease in Caldolor revenue for the year ended December 31, 2023, w as the result of the timing of international shipments. There was no Vaprisol revenue for the year ended December 31, 2023, as Cumberland is currently out of commercial inventory of the product. Net revenue was positively impacted by various sales deduction adjustments.
Removed
The Company amended the At the Market Sales Agreement on December 27, 2021, in order to allow the Company to continue using its ATM feature to sell shares at market prices. The Company intends to continue an ATM feature through B. Riley FBR, Inc. which allows the Company to issue shares of its common stock.
Added
These cost savings were due to the availability of lower cost inventory and fewer inventory write downs. Selling and marketing . Selling and marketing expense for the year ended December 31, 2023, were $18.5 million compared to $16.7 million in the prior year, which was an increase of $1.8 million.
Removed
Debt Agreement On September 29, 2022, the Company entered into the Ninth Amendment to the Revolving Credit Loan Agreement with Pinnacle Bank (as amended, the "Pinnacle Agreement") to update the Funded Debt Ratio to mean the ratio of (i) Funded Debt less the amount of Unrestricted Cash in excess of $8,500,000, to (ii) EBITDA, as determined at the end of each fiscal quarter on a rolling four (4) quarter basis.
Added
Income taxes totaled $45,769 for the year ended December 31, 2023, and $68,850 for the year ended December 31, 2022. Other income. In 2023, we recognized a $2.8 million refund of FDA fees for the periods of 2023 and 2022 to be used to further our product research efforts.
Removed
For the year ended December 31, 2022, we were in compliance with the Funded Debt Ratio financial covenant.
Added
Cash provided by operating activities of $6.1 million is primarily due to an increase in accounts payable and other accrued liabilities of $3.7 million, and a $3.4 million decrease in accounts receivable, partially offset by a decrease in non-cash contingent consideration of $1.3 million.
Removed
On June 30, 2022, the Company entered into the Eighth Amendment to the Revolving Credit Loan Agreement with Pinnacle Bank permitting the Maximum Funded Debt Ratio to be calculated on a rolling four-quarter basis to be no more than 3.00 to 1.00 for the second and third quarters of 2022 and 2.50 to 1.00 for each quarter thereafter.
Added
Debt Agreement On September 5, 2023, the Company entered into a new Revolving Credit Loan Agreement with Pinnacle Bank. This facility provides for an aggregate principal funding amount of up to $25 million. The initial revolving line of credit is up to $20 million, with the ability for Cumberland to increase the amount to $25 million, under certain conditions.
Removed
On March 31, 2022, the Company and Pinnacle Bank entered into a Seventh Amendment to the Revolving Credit Loan Agreement to revise and update the Maximum Funded Debt Ratio financial covenant and to delete from the Pinnacle Agreement the Funded Debt to Tangible Capital Ratio financial covenant.
Added
It has a three year term expiring on October 1, 2026. The interest rate is based on Benchmark (Term SOFR) plus a spread of 2.75%. Cumberland is subject to one financial covenant, the maintenance of a Funded Debt Ratio, determined on a quarterly basis. Borrowings under the line of credit are collateralized by substantially all of our assets.
Removed
These changes were made to more appropriately reflect the impact from the Sancuso acquisition. On December 31, 2021, the Company and Pinnacle Bank entered into the Fifth Amendment to the Revolving Credit Note and the Sixth Amendment to the Revolving Credit Loan Agreement in order to increase the principal amount of the Note from $15 million to $20 million.
Added
Contractual cash obligations The following table summarizes our contractual cash obligations as of December 31, 2023: Payments Due by Year Contractual obligations (1) Total 2024 2025 2026 2027 2026 and thereafter Line of credit (2) $ 12,784,144 $ — $ — $ 12,784,144 $ — $ — Estimated interest on debt (2) 2,856,458 1,038,712 1,038,712 779,034 — — Vibativ contingent consideration liability payments (3) 4,033,273 245,361 514,476 508,997 492,696 2,271,743 Sancuso contingent consideration liability payments (4) 2,306,000 124,565 387,316 365,174 344,064 1,084,881 Operating leases (5) 9,131,702 863,320 836,100 909,911 934,180 5,588,191 Total (1) $ 31,111,577 $ 2,271,958 $ 2,776,604 $ 15,347,260 $ 1,770,940 $ 8,944,815 1.
Removed
On October 28, 2021, the Company entered into a Fourth Amendment to the Revolving Credit Note and Fifth Amendment to Revolving Credit Loan Agreement with Pinnacle Bank. Among other terms, the Fourth Amendment extended the maturity date to October 1, 2024.
Removed
Paycheck Protection Program On April 20, 2020, Cumberland received the funding of a loan from Pinnacle Bank in the aggregate amount of $2,187,140 pursuant to the Paycheck Protection Program (the “PPP”) under the Federal Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), which was enacted March 27, 2020.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe Company did not have any investments in marketable securities at December 31, 2022. The interest rate risk related to borrowings under our line of credit is based on LIBOR plus an interest rate spread.
Biggest changeThe Company did not have any investments in marketable securities at December 31, 2023. The interest rate risk related to borrowings under our line of credit is based on a benchmark (Term SOFR) plus a spread of 2.75%.
We believe our exposure to foreign currency fluctuation is minimal as our purchases in foreign currency have a maximum exposure of 90 days based on invoice terms with a portion of the exposure being limited to 30 days based on the due date of the invoice. Foreign currency exchange losses were immaterial for 2022, 2021 and 2020.
We believe our exposure to foreign currency fluctuation is minimal as our purchases in foreign currency have a maximum exposure of 90 days based on invoice terms with a portion of the exposure being limited to 30 days based on the due date of the invoice. Foreign currency exchange losses were immaterial for 2023 and 2022.
As of December 31, 2022, we had $16.2 million in borrowings outstanding under our revolving line of credit. Exchange Rate Risk While we operate primarily in the U.S., we are exposed to foreign currency risk. A portion of our research and development is performed abroad. Currently, we do not utilize financial instruments to hedge exposure to foreign currency fluctuations.
As of December 31, 2023, we had $12.8 million in borrowings outstanding under our revolving line of credit. 70 Exchange Rate Risk While we operate primarily in the U.S., we are exposed to foreign currency risk. A portion of our research and development is performed abroad. Currently, we do not utilize financial instruments to hedge exposure to foreign currency fluctuations.
Removed
There is no LIBOR minimum and the LIBOR pricing provides for an interest rate spread of 1.75% to 2.75% (representing an interest rate of 6.875% at December 31, 2022).
Removed
When the LIBOR rate is discontinued, the Pinnacle Agreement allows for the LIBOR rate to be replaced by a Benchmark Rate, which may be the Daily Simple SOFR (Secured Overnight Financing Rate). The Benchmark Rate will be determined in consultation with Pinnacle Bank.

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