Erin Smith - ‎Corporate Relations Associate A.J. Kazimi - Chairman and Chief Executive Officer Martin Cearnal - Director, Chief Commercial Officer and Senior Vice President Michael Bonner - Senior Director Finance and Accounting, and Chief Financial Officer.

Analysts:.

Thank you for joining the Cumberland Pharmaceuticals’ First Quarter 2016 Financial Results and Company Update Conference Call. Please be advised that this call is being recorded at the company’s request, and will be archived on the Cumberland’s website for one week from today’s date.

At this time, I would like to introduce Erin Smith, who handles Corporate Relations for Cumberland Pharmaceuticals. Erin, please go ahead..

Good afternoon, everyone. Before we begin, I’d like to point out that earlier today the company issued a press release containing our financial results and update for the first quarter ended March 31, 2016. The release, including the financial tables is available on the company’s website at www.cumberlandpharma.com.

I’d now also like to share the following Safe Harbor language. This call may contain forward-looking statements within the meaning of the Private Securities Reform Act of 1995. Because they reflect the company’s current views and expectations concerning future events, these forward-looking statements may involve risks and uncertainties.

Investors should note that many factors could affect the company’s future results, as more fully described under the caption Risk Factors in our Form 10-K and any updates filed with the SEC. Any forward-looking statements made during today’s call are qualified by those Risk Factors.

Our future results could differ materially from the views expressed in today’s call. And we do not assume any obligation to publicly update any forward-looking statements, whether as a result of new information or future development. Also please note that today we’ll provide some non-GAAP financial measures with respect to our performance.

A reconciliation to GAAP measures can be found in our earnings release and its related financial tables. I’ll now turn the call over to our Chief Executive Officer, A.J. Kazimi, to begin our discussion of the company’s performance and plans..

Thank you, Erin. Good afternoon, everyone. Thank you for joining us, as we review our first quarter 2016 results and also provide you with an update on our recent developments. Today, with me on the call are Cumberland’s Chief Commercial Officer, Marty Cearnal; and our Chief Financial Officer, Michael Bonner.

We will start with a discussion of recent developments, and then follow with an update on our commercial activities. We’ll then also present an overview of our financial results for the quarter and conclude with a review of the company’s strategy and plans. And then we’ll open the call to any questions you may have. So let’s begin.

As you were here today, we’ve continued on our path of building a company that offers its shareholders long-term sustainable growth.

In order to achieve that goal Cumberland’s strategy is to expand the use of our marketed products and deliver on a series of key initiatives and they include the addition of complementary products, progressing our clinical pipeline, prudently managing our expenses and leveraging our infrastructure through co-promotion partnerships.

Today, I’m pleased to report that we were able to advance on each of those objectives during the first quarter. Those of you who have been following us know we have heightened our focus on business development to selectively acquire rights to products that can have a near-term impact on our financial results.

We’ve also been committed to expanding our pipeline of late-stage product development candidates. While during the first quarter, we launched the co-promotion arrangement in support of our hospital products with the Piramal company. We also recently launched the new Caldolor pediatric indication.

And you should expect these two growth drivers to begin impacting our financial results as we move into the second-half of this year. In addition, we now have two important recent developments. You may have seen the announcement of our new program to develop Vasculan for the treatment of patients with systemic sclerosis, also known as scleroderma.

Vasculan is an oral form of ifetroban, a potent inhibitor of platelet aggregation and inflammation. Ifetroban was discovered and initially developed by a large pharma company, who subsequently donated the product to Vanderbilt University.

We now have exclusive worldwide rights to this New Chemical Entity or NCE, and we’re collaborating with researchers at Vanderbilt to redirect ifetroban for the treatment of several new niche indications. Ifetroban safety profile has been well established through a series of clinical studies involving over 1,000 patients.

And our clinical development efforts with ifetroban are focused on unmet medical needs. Last year, we completed the Phase II study with Hepatoren, an injectable formulation of ifetroban for patients with hepatorenal syndrome.

Those patients suffer from progressive kidney and liver failure leading to a high mortality rate, with no approved treatment for this condition available in the United States.

In 2015, we also announced and completed another Phase II study, evaluating Boxaban an oral formulation of ifetroban in patients suffering from a form of asthma known as aspirin-exacerbated respiratory disease.

In both these Phase II studies, we found that ifetroban was well-tolerated in these new patient populations, and we also identified encouraging signals of beneficial activity. We’re now finalizing a report on these findings for the FDA and planning our next steps in these two clinical development programs.

The third and newest ifetroban program involves the development of the drug under the brand name Vasculan for the chronic treatment of patients suffering from systemic sclerosis or scleroderma. It’s the deadliest form of autoimmune disease resulting in an average lifespan of 11 years following initial diagnosis.

Scleroderma involves fibrosis or hardening of the skin and internal organs such as the lungs, kidneys and gastrointestinal tract. It’s more prevalent in women, but it’s also been found to occur in children. Scientists at Vanderbilt University have found that ifetroban can alleviate fibrosis in their non-clinical models.

And based on those exciting discoveries, we’ve now launched the Vasculan development program with the goal of translating those findings into a new treatment for these scleroderma patients. We’re pleased to announce that the FDA has cleared our Investigational New Drug application or IND.

And we are now initiating the Phase II study of Vasculan in six scleroderma centers of excellence across this country. The second key development is our new agreement with the Clinigen Group to reintroduce Ethyol into United States market.

Ethyol or amifostine for injection is an FDA-approved hospital product used in the supportive care of oncology patients. It’s a free radical scavenger initially developed at the U.S. Army’s Walter Reed Hospital and at NASA for protection from the harmful effects of radiation.

As a cited protective agent, it is now FDA approved for use as an adjunctive therapy to reduce the side effects in patients undergoing postoperative radiation treatment for their head and neck cancers.

And it also reduces the cumulative renal toxicity associated with repeated administration of chemotherapy agents such as cisplatin in patients with advanced ovarian cancers. This new agreement follows the strategic alliance we signed with the Clinigen Group last year and is the first product collaboration between our companies.

Clinigen acquired the worldwide rights to Ethyol from AstraZeneca in 2014, and it was part of Astra’s MedImmune product line. Under the term of our alliance with Clinigen, Cumberland will be responsible for the commercialization of Ethyol in the U.S.

and the companies will coordinate the worldwide marketing, positioning and ongoing development of the brand. Cumberland has an exclusive license to the U.S. market for a 10-year term and the economics of the transaction involve a royalty to Clinigen on our sales, as well as the transfer price on supplies of the product.

We’re now working closely with Clinigen to have Ethyol available later this year in support of oncology patients across the U.S. We’re very excited about the addition of Vasculan to our pipeline and now Ethyol to our portfolio of marketed products. And we look forward to providing further updates on these two important initiatives as they progress.

I’ll now look to Martin Cearnal, Cumberland’s Chief Commercial Officer to provide an update on our marketed products.

Marty?.

Thanks, A.J. Last year, we worked diligently to further strengthen Caldolor’s position through the addition of the new indication for its use in children. We were excited to officially kick off our sales initiative for that indication at a national sales meeting of our sales organization at the end of the first quarter.

Caldolor is an injectable form of ibuprofen designed primarily for hospitalized patients, who are not able to take their pain and fever medications orally. It is the first and only injectable non-steroidal anti-inflammatory drug approved for the treatment of pain and fever in children.

So this new development provides us with an important competitive advantage. We anticipate the addition of this pediatric indication for Caldolor will be a catalyst for overall growth of the brand.

Also at the national sales meeting, our field and hospital representatives received the preparation guidance and tools to support their 2016 promotional efforts. The meeting included updates from senior management and presentations from product marketing, sales management, the medical department and two outside medical experts.

Each sales force and then each district conducted sessions with their teams devoted to assuring competent implementation of our 2016 promotional tactics. Also during the first quarter, we work with Piramal critical care to train their national sales organization and launch their promotion support for our Caldolor and Vaprisol brands.

Piramal is augmenting our hospital sales forces’ reach by providing coverage for an additional group of hospitals, where their established critical-care sales-force has existing relationships.

This collaboration allows us to cover additional institutions providing us the opportunity to reconnect with users we don’t cover and continue our efforts to expand the sales and use of both brands.

We are pleased with the start of this important initiative as Piramal is now increasing our share of voice through their communication to medical professionals in hospitals throughout the country. That completes today’s update on marketed products. A.J., I’ll turn this back to you..

Thanks for the update, Marty. We are certainly pleased with the launch of Caldolor’s pediatric indication as well as the new hospital co-promotion agreement. And look forward to further updates on these two marketing initiatives as the year progresses. So I’d now like to look to our Chief Financial Officer, Michael Bonner for the financial review.

Michael?.

Thank you, A.J. For the three months ended March 31, 2016, net revenues were $7.7 million compared to $8.7 million for the prior-year period.

Net revenues by product for the first quarter were $3.6 million for Kristalose, $1.8 million for Acetadote, including $1.2 million for our authorized generic, $1.1 million for Caldolor, $0.8 million for Omeclamox and $0.4 million for Vaprisol. I’d like to point out, that while the sales performance for our brands was mixed during the first quarter.

Caldolor remains our fastest-growing product. Kristalose remains our largest product and we were very pleased to see the significant continued contribution from the Acetadote line. It was our newer products Omeclamox and Vaprisol that lagged during the quarter, and our commercial organization is working diligently to address their performance.

Turning to our expenditures, total operating expenses for the three months ended March 31, 2016 were $8.2 million compared to $8.7 million for the prior-year period. We continued to maintain our expenses in line with our revenues to deliver annual profitability.

Adjusted earnings for the first quarter were $0.3 million or $0.02 per share, compared to $1.6 million or $0.09 per share for the prior year period. During the first quarter our balance sheet remained strong and straightforward.

As of March 31, 2016, we had just under $90 million in total assets, including approximately $51 million in cash and marketable securities. Liabilities at the end of the quarter totaled $14 million, including $1.7 million on our credit facility.

There is a significant reduction in liabilities during the quarter, as we resolved and paid some previously incorrect invoices. Also please note, that we continue to have significant tax loss carry forwards at approximately $43 million related to the prior exercise of stock options.

Meanwhile, we do believe our shares represent an attractive investment opportunity, and we continue to buy back Cumberland shares.

During the first quarter, we repurchased another 212,948 shares and our board authorized a new $10 million tranche for the share buyback program, which we are implementing as we view our shares to be significantly undervalued. That completes our financial report for the first quarter of 2016..

Hepatoren, Boxaban, and the new Vasculan development program. All three address large potential markets and unmet medical needs. We do remain confident that we’re well-positioned to achieve our goals. And in addition to these product achievements, we enjoy a growing number of international partners, a strong financial position and an outstanding team.

And most importantly, we continue to remain focused on our mission of advancing patient-care for the delivery of high-quality pharmaceutical products. You see aim to support patients and to build value. So with that review and update, now, let’s open the call to any questions you may have. Operator, please proceed..

Operator:.

Okay. Thank you everyone for joining the call today. We understand that many of you prefer a private discussion with management and we’re prepared to address your questions in that manner. We do appreciate your time and interest in Cumberland and we look forward to providing another update after the end of the second quarter..

Thank you, sir. Ladies and gentlemen, that concludes our conference for today. If you would like to listen to a replay of today’s conference, please dial 855-859-2056, again that is 855-859-2056, using the access-code 87898815. Alternatively, a replay of the webcast will be available on the company’s website.

I would like to thank you for your participation. You may now disconnect..