Cumberland Pharmaceuticals Inc.

11/13/2026 | Press release | Distributed by Public on 11/13/2026 16:15

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Disclosure regarding forward-looking statements
The following discussion contains certain forward-looking statements which reflect management's current views of future events and operations. These statements involve certain risks and uncertainties, and actual results may differ materially from them. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results may differ significantly from the results discussed in these forward-looking statements. Some important factors which may cause results to differ from expectations include: availability of additional debt and equity capital; market conditions at the time additional capital is required; the timing and outcome of our planned NDA submission for ifetroban and the FDA's review of it; the results of our clinical trials; our ability to deploy the proceeds of the Strategic Transaction effectively; our performance under the TSA; management of our operations and generally unpredictable conditions in national and international markets. While forward-looking statements reflect our beliefs and best judgment based upon current information, they are not guarantees of future performance. Other important factors that may cause actual results to differ materially from forward-looking statements are discussed in the sections entitled "Risk Factors" and "Special Note Regarding Forward-Looking Statements" of our Annual Report on Form 10-K for the year ended December 31, 2025, and our other filings with the SEC. We do not undertake to publicly update or revise any of our forward-looking statements, even in the event that experience or future changes indicate that the anticipated results will not be realized. The following presentation of management's discussion and analysis of financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in this report on Form 10-Q.
OVERVIEW
Our Business
Cumberland Pharmaceuticals Inc. ("Cumberland," the "Company," or as used in the context of "we," "us," or "our"), is an innovation-focused biopharmaceutical company developing new therapies to address unmet medical needs and improve patient outcomes. Earlier this year the Company completed the Strategic Transaction with Apotex Inc. to combine Cumberland's approved brands and commercial organization with the Apotex branded U.S. business. Following the Strategic Transaction, Cumberland has sharpened its focus on advancing its proprietary clinical pipeline.
The Company's lead product candidate, ifetroban, is being evaluated across multiple Phase 2 clinical programs targeting serious conditions with limited treatment options. The programs include the treatment of Duchenne muscular dystrophy-associated cardiomyopathy, Systemic Sclerosis, Idiopathic Pulmonary Fibrosis, as well as the prevention of Cancer Metastasis.
Following the Strategic Transaction's completion, Cumberland retained majority ownership in Cumberland Emerging Technologies (CET), which partners with academic institutions to identify and support the development of promising new product candidates.
We have announced positive results in a clinical study of our ifetroban product candidate in patients with cardiomyopathy associated with Duchenne muscular dystrophy ("DMD"). This rare, fatal genetic neuromuscular disease results in deterioration of the skeletal, heart and lung muscles. Following a pre-NDA meeting with the U.S. Food and Drug Administration (the "FDA") this fall, we announced our decision to submit a New Drug Application ("NDA") for ifetroban as a potential treatment for DMD-associated cardiomyopathy. The FDA granted our request for a rolling review of the application, and the program has previously received FDA Orphan Drug, Rare Pediatric Disease and Fast Track designations.
We have also completed a Phase 2a clinical trial evaluating our ifetroban product candidate in patients with Systemic Sclerosis or scleroderma, a debilitating autoimmune disorder characterized by diffuse fibrosis of the skin and internal organs. We recently announced top-line results showing that ifetroban was generally well tolerated, with a safety profile consistent with prior experience. Next steps include submitting the clinical study report to the FDA and completing correlative biomarker studies and cardiac imaging evaluations from patients in the open-label extension, which will inform our decision on further development.
Additionally, a Phase 2 study evaluating ifetroban in patients with Idiopathic Pulmonary Fibrosis ("IPF"), the most common form of progressive fibrosing interstitial lung disease, is actively enrolling at medical centers across the U.S. Favorable interim safety findings have been announced. We are evaluating a potential increase in the number of patients for this study, and the next milestone is interim efficacy results.
The Company, in collaboration with Vanderbilt Health, has completed a Phase 2a trial of ifetroban for the prevention of metastasis in patients with high-risk solid tumors. The study achieved its primary safety endpoint and identified favorable trends in decreased metastasis recurrence and metastasis-free survival. Based on these findings, we are developing plans for a follow-up study.
GROWTH STRATEGY
Cumberland's growth strategy is centered on creating long-term shareholder value by advancing its proprietary pipeline of differentiated product candidates while maintaining financial discipline. Key priorities include:
Advancing our clinical development programs across multiple rare disease indications;
Pursuing efficient regulatory pathways for therapies addressing significant unmet medical needs;
Expanding the pipeline through Cumberland Emerging Technologies ("CET");
Maintaining a strong balance sheet and operating with financial discipline; and
Leveraging the Company's business and product development expertise to support its corporate objectives.
Specifically, we are seeking long-term, sustainable growth by:
• Progressing our clinical pipeline and incubating future product opportunities at CET. We believe it is important to advance a pipeline of innovative new product opportunities, as we are doing through our ifetroban Phase 2 development programs. We are also supplementing our acquisitions and late-stage development activities with the early-stage product development activities at CET.
• Leveraging our partnerships. We seek to collaborate with leading academic institutions, health care organizations and industry partners that complement our development capabilities. These relationships enable us to advance our clinical programs, expand our efforts and identify new opportunities to develop innovative therapies addressing significant unmet medical needs.
• Managing our operations with financial discipline. Following the completion of our Strategic Transaction with Apotex, we have strengthened our balance sheet and enhanced our ability to support the continued advancement of our pipeline. We carefully manage our operating expenses, prioritize investments that create long-term value and seek to preserve the resources necessary to execute our strategic objectives while delivering sustainable value for shareholders.
RECENT DEVELOPMENTS
Strategic Transformation Outlined at the Nashville Health Care Conference
We outlined the next stage of our company's evolution at the Nashville Health Care Council's annual Sessions Conference, following the divestment of our commercial pharmaceutical brand portfolio. The Strategic Transaction provided significant financial resources to support our ongoing clinical development programs and sharpen our focus on advancing new therapies for significant unmet medical needs.
We featured our development efforts which are led by ifetroban, a first-in-class oral therapy in late-stage programs for Duchenne muscular dystrophy-associated cardiomyopathy, Systemic Sclerosis and Idiopathic Pulmonary Fibrosis. We also noted our investment in Cumberland Emerging Technologies, founded with Vanderbilt University and Launch Tennessee to advance promising academic discoveries toward the market, reaffirming our commitment to leading the growth of Nashville's life sciences community.
New Mission Reflects Focus on Innovation
Following the Strategic Transaction, we completed a strategic planning process. The result is a refined mission statement that reflects our emphasis on innovation: Advancing new therapies that address significant unmet medical needs.
This mission guides our next chapter as an innovation-focused biopharmaceutical company developing new products for rare diseases. It centers our resources and expertise on advancing our clinical-stage pipeline, led by ifetroban, while continuing to build on our experience developing and delivering differentiated medicines for patients.
Plans to File New Drug Application for Ifetroban in DMD
We announced our decision to submit a New Drug Application (NDA) to the FDA for ifetroban as a potential treatment for the cardiomyopathy associated with Duchenne muscular dystrophy (DMD). It follows a pre-NDA meeting with the FDA this fall, during which the format and content of the planned submission were discussed including the needed reports and requested analysis. After that meeting, the FDA granted our request for a rolling review of the NDA, which allows completed sections of the application to be submitted for review before the entire application is filed.
The NDA submission will include data from our Phase 2 FIGHT DMD trial, which demonstrated a statistically significant 5.4 percentage point improvement in left ventricular ejection fraction (p=0.002) in the high-dose group compared with a control group of placebo-treated patients combined with propensity score-matched natural history patients. Findings also included a reduction in markers of cardiac damage.
The NDA will include data from two natural history databases of DMD patients, preclinical data published in the Journal of the American Heart Association, manufacturing information and a safety database that includes more than 1,400 subjects across approximately 30 clinical studies of ifetroban. The submission will also include additional analysis and data that FDA requested at the pre-NDA meeting including data from the clinical study's open label extension. All patients who completed the twelve-month treatment period elected to continue receiving ifetroban in the open label extension, which was not part of the study's primary efficacy analysis. The resulting twenty-four-month and thirty-six-month data is currently being gathered and monitored for analysis and reporting. The Company intends to include the data in the NDA, and have it presented at an appropriate scientific conference (similar to the twelve-month data announcement), as well as through a study publication.
Top-Line SSc Study Results
We recently announced top-line results from our Phase 2a ASSIST-SSc trial evaluating ifetroban in patients with Systemic Sclerosis ("SSc"), a debilitating autoimmune disease with no approved therapy for the underlying condition. Ifetroban was generally well tolerated, with a safety profile consistent with our prior experience, and no serious adverse event during the 12-month treatment period was assessed as related to study drug by the medical monitor.
As next steps, we plan to submit the clinical study report to the FDA and complete correlative biomarker studies using specimens collected during the trial, along with cardiac imaging evaluations from patients continuing in the open-label extension. These findings will inform our decision on further development of ifetroban in SSc.
SUMMARY
The completion of our Strategic Transaction marked a transformational milestone for Cumberland, strengthening our financial position and sharpening our focus on developing innovative therapies for patients with significant unmet medical needs. With a differentiated clinical pipeline led by ifetroban and a planned NDA submission in DMD, continued investment through Cumberland Emerging Technologies and a disciplined approach to capital allocation, we believe the Company is positioned to advance scientific innovation while creating long-term value for patients, health care providers and our shareholders. We remain committed to executing our development strategy and look forward to reporting our continued progress.
CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT JUDGMENTS AND ESTIMATES
Please see a discussion of our critical accounting policies and significant judgments and estimates in Note 1 to the Company's Condensed Consolidated Financial Statements accompanying this report and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2025 Annual Report on Form 10-K.
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. 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. 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 and (3) valuation of contingent consideration liabilities associated with business combinations.
RESULTS OF OPERATIONS
Three months ended September 30, 2026 compared to the three months ended September 30, 2025
The following table presents the unaudited interim statements of operations for continuing operations for the three months ended September 30, 2026 and 2025:
Three months ended September 30,
2026 2025 Change
Transition services revenue $ 1,950,000 $ - $ 1,950,000
Net revenue 206,356 171,821 34,535
Total revenue 2,156,356 171,821 1,984,535
Costs and expenses:
Cost of transition services 1,062,266 - 1,062,266
Research and development 841,162 646,473 194,689
General and administrative 2,182,285 2,376,284 (193,999)
Amortization 7,125 5,586 1,539
Total costs and expenses 4,092,838 3,028,343 1,064,495
Operating income (loss) (1,936,482) (2,856,522) 920,040
Interest income 822,886 131,583 691,303
Interest expense (4,604) (29) (4,575)
Loss before income taxes (1,118,200) (2,724,968) 1,606,768
Income tax expense (3,871) (5,670) 1,799
Loss from continuing operations (1,122,071) (2,730,638) 1,608,567
Discontinued operations:
Gain on disposal of discontinued operations 81,092,578 - 81,092,578
Income tax expense on disposal of discontinued operations (467,657) - (467,657)
Income (loss) from discontinued operations (1,725,098) 781,592 (2,506,690)
Income from discontinued operations 78,899,823 781,592 78,118,231
Net income (loss) $ 77,777,752 $ (1,949,046) $ 79,726,798
Revenues. Revenues for the three months ended September 30, 2026, were $2.2 million compared to $0.2 million for the three months ended September 30, 2025. The $2.0 million increase is largely driven by transition service revenue associated with the Strategic Transaction.
The revenue from the branded products is classified as discontinued operations.
Cost of transition services. With the TSA beginning in the third quarter of 2026, the cost of transition services was $1.1 million for the three months ended September 30, 2026 and is attributable to discontinued operations.
Research and development. The research and development costs for the three months ended September 30, 2026, was $0.8 million, as compared to $0.6 million in the same period in 2025. A portion of our research and development costs is variable as we continue to fund the ongoing clinical initiatives associated with our pipeline product candidates. These variable costs depend on the number of active trials, study sites and patients as well as the cost per patient in each of our clinical programs.
General and administrative. The general and administrative expense for the third quarter of 2026 was $2.2 million similar to $2.4 million for the same period in 2025.
Amortization. Amortization for the three months ended September 30, 2026 and 2025, totaled approximately $0.01 million related to intellectual property of our study drug.
Interest income. Interest income was $0.8 million for the third quarter of 2026 and $0.1 million for the prior year period. The increase is the result of investing the proceeds associated with the Strategic Transaction.
Gain on disposal of discontinued operations. The $81.1 million gain resulted from the July 1, 2026, closing of the Strategic Transaction. The $100 million in proceeds was reduced primarily by the book value of the assets.
Income tax expense on disposal of discontinued operations. The $0.5 million income tax expense resulted from the gain on disposal of discontinued operations.
The following table shows the primary components of our research and development expenses for the three months ended September 30, 2026 and 2025.
Research and Development Expenses Three months ended September 30,
2026 2025
External research and development expenses
Clinical development $ 522,342 $ 322,958
Regulatory expenses 13,795 357,020
Other external 21,180 10,730
Total external expenses 557,317 690,708
Internal research and development expenses
Personnel costs 300,375 509,551
Other internal 20,266 53,108
Total internal expenses 320,641 562,659
Total research and development expenses 877,958 1,253,367
Discontinued operations (36,796) (606,894)
Research and development expenses from continuing operations $ 841,162 $ 646,473
RESULTS OF OPERATIONS
Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025
The following table presents the unaudited interim statements of operations for continuing operations for the nine months ended September 30, 2026 and 2025:
Nine months ended September 30,
2026 2025 Change
Transition services revenue $ 1,950,000 $ - $ 1,950,000
Net revenue 536,665 719,247 (182,582)
Total revenue 2,486,665 719,247 1,767,418
Costs and expenses:
Cost of transition services 1,062,266 - 1,062,266
Research and development 2,379,170 2,178,866 200,304
General and administrative 7,128,677 7,244,245 (115,568)
Amortization 21,276 17,430 3,846
Total costs and expenses 10,591,389 9,440,541 1,150,848
Operating loss (8,104,724) (8,721,294) 616,570
Interest income 961,802 384,781 577,021
Interest expense (5,394) (4,892) (502)
Loss before income taxes (7,148,316) (8,341,405) 1,193,089
Income tax expense (11,611) (17,011) 5,400
Loss from continuing operations (7,159,927) (8,358,416) $ 1,198,489
Discontinued operations:
Gain on disposal of discontinued operations 81,092,578 - 81,092,578
Income tax expense on disposal of discontinued operations (467,657) - (467,657)
Income (loss) from discontinued operations (3,248,722) 6,922,347 (10,171,069)
Income from discontinued operations 77,376,199 6,922,347 70,453,852
Net income (loss) $ 70,216,272 $ (1,436,069) $ 71,652,341
Revenues. Revenues for the nine months ended September 30, 2026, were $2.5 million compared to $0.7 million for the nine months ended September 30, 2025. The $1.8 million increase is largely driven by transition service revenue associated with the discontinued operations.
The revenue from the branded products is classified as discontinued operations.
Cost of transition services. With the TSA beginning in the third quarter of 2026, the cost of transition services was $1.1 million for the three months ended September 30, 2026 and is attributable to discontinued operations.
Research and development. The research and development costs were $2.4 million for the first nine months of 2026 approximately as compared to $2.2 million for the same period last year. A portion of our research and development costs is variable as we continue to fund the ongoing clinical initiatives associated with our pipeline product candidates. These variable costs depend on the number of active trials, study sites and patients as well as the cost per patient in each of our clinical programs.
General and administrative. The general and administrative expenses for the nine months ended September 30, 2026, was $7.1 million compared to $7.2 million during the nine months ended September 30, 2025.
Amortization. Amortization for the nine months ended September 30, 2026, and nine months ended September 30, 2025, totaled approximately $0.02 million related to intellectual property of our study drug.
Interest income. The income tax expense for the nine months ended September 30, 2026 and 2025, was $1.0 million and $0.4 million, respectively. The increase is the result of receiving $100 million for the divestiture of the assets associated with the Strategic Transaction.
Gain on disposal of discontinued operations. This $81.1 million gain resulted from the July 1, 2026, closing of the Strategic Transaction. The $100 million in proceeds was reduced primarily by the book value of the assets.
Income tax expense on disposal of discontinued operations. The $0.5 million income tax expense resulted from the gain on disposal of discontinued operations.
As of September 30, 2026, the Company had approximately $14.0 million in federal net operating loss carryforwards remaining after the utilized amounts mentioned above. These have historically been used to significantly offset income tax obligations. For the tax year 2026, the Company expects to utilize these net operating loss carryforwards to offset the tax liability associated with the $81.1 million taxable gain.
Research and Development Expenses
The following table shows the primary components of our research and development expenses for the nine months ended September 30, 2026 and 2025.
Research and Development Expenses Nine months ended September 30,
2026 2025
External research and development expenses
Clinical development
$ 1,425,141 $ 1,235,616
Regulatory expenses
862,282 1,072,175
Other external
55,450 39,425
Total external expenses
2,342,873 2,347,216
Internal research and development expenses
Personnel costs 1,293,369 1,524,960
Other internal
119,439 144,666
Total internal expenses
1,412,808 1,669,626
Total research and development expenses
3,755,681 4,016,842
Discontinued operations (1,376,511) (1,837,976)
Research and development expenses from continuing operations $ 2,379,170 $ 2,178,866
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
Following the closing of the Strategic Transaction on July 1, 2026, our primary sources of liquidity are our cash and cash equivalents, the $100.0 million of proceeds received from Apotex, interest income earned on those proceeds, the inventory reimbursement of up to $9.0 million payable over the twelve months following closing, and grant funding at Cumberland Emerging Technologies. Our continuing operations do not generate product revenues and we expect them to use cash to fund operations for the foreseeable future. We believe that our internally generated cash flows, existing working capital and the proceeds from the Strategic Transaction will be adequate to finance internal growth, finance business development initiatives and fund capital expenditures for the foreseeable future.
Working capital was $70.2 million as of September 30, 2026, compared to $0.3 million as of December 31, 2025. Working capital attributable to continuing operations was $70.0 million as of September 30, 2026. The increase was primarily due to higher cash balances resulting from the proceeds of the Strategic Transaction, which closed July 1, 2026. The revolving credit facility with Pinnacle Bank was repaid in full and terminated on June 29, 2026, and accordingly no borrowing availability existed as of September 30, 2026.
The Company received $100.0 million of cash consideration at the closing of the Strategic Transaction on July 1, 2026, and is entitled to receive an inventory reimbursement of up to $9.0 million over the twelve months following closing. On July 31, 2026, the Company paid a special cash dividend of $1.50 per share, or approximately $22.5 million in the aggregate to shareholders of record as of July 23, 2026. The Board also authorized an open-market share repurchase program of up to $5.0 million, which replaced the prior share repurchase program. After giving effect to these transactions, the Company believes its cash and cash equivalents are sufficient to fund its operations and product development programs for at least the twelve months following the date these financial statements are issued.
The following table summarizes our liquidity and working capital as of September 30, 2026 and December 31, 2025:
September 30, 2026 December 31, 2025
Cash and cash equivalents $ 80,581,021 $ 11,444,693
Working capital (current assets less current liabilities) $ 70,231,153 $ 315,348
Current ratio (multiple of current assets to current liabilities) 3.0 1.0
Working capital, continuing operations $ 70,039,422 $ (591,841)
Working capital, discontinued operations $ 191,731 $ 907,189
Revolving line of credit availability $ - $ 9,759,267
The following table summarizes our net changes in cash and cash equivalents for the nine months ended September 30, 2026 and September 30, 2025:
Nine months ended September 30,
2026 2025
Net cash provided by (used in):
Operating activities $ (942,253) $ 4,929,497
Investing activities 98,095,906 (1,633,159)
Financing activities (28,017,325) (6,063,778)
Net increase (decrease) in cash and cash equivalents $ 69,136,328 $ (2,767,440)
Net increase (decrease) in cash and cash equivalents, continuing operations $ (31,039,658) $ (8,233,076)
Net increase in cash and cash equivalents, discontinued operations $ 100,175,986 $ 5,465,636
The net $69.1 million increase in cash and cash equivalents for the nine months ended September 30, 2026, was primarily attributable to $98.1 million of cash used in investing activities partially offset by $0.9 million of cash used in operating activities partially offset by $28.0 million of cash used in financing activities.
Cash used in operating activities totaled $0.9 million for the nine months ended September 30, 2026, is primarily driven by $70.2 million of net income, partially offset by the gain on the disposal of discontinued operations of $80.6 million and $0.2 million provided by discontinued operations.
Cash used in investing activities totaled $98.1 million, including $100 million in proceeds from the Strategic Transaction partially offset by $1.8 million used in continuing operations, primarily reflecting increased investment in manufacturing.
Cash used in financing activities totaled $28.0 million for the nine months ended September 30, 2026, primarily due to $22.5 million in cash dividends paid and repayment of $5.2 million on the line of credit.
For the nine months ended September 30, 2025, the net $2.8 million decrease in cash and cash equivalents was primarily attributable to $6.1 million of cash used in financing and $1.6 million used in investing activities, partially offset by $4.9 million of cash provided by operating activities.
Debt Agreement
On June 29, 2026, in connection with the closing of the Strategic Transaction with Apotex, Cumberland terminated and repaid in full all outstanding obligations, approximately $5.2 million, due under the Loan Agreement dated as of September 5, 2023 with Pinnacle Bank. In connection with the termination and repayment in full of all outstanding obligations under the Loan Agreement, all related liens and security interests were terminated, discharged and released.
OFF-BALANCE SHEET ARRANGEMENTS
During the nine months ended September 30, 2026 and 2025, we did not engage in any off-balance sheet arrangements.
Cumberland Pharmaceuticals Inc. published this content on November 13, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 13, 2026 at 22:16 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]