Ladies and gentlemen, thank you for standing by, and welcome to the Cumberland Pharmaceuticals’ 2020 First Quarter Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference will be recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Erin Gull. Thank you, and please go ahead, ma'am.

Good afternoon, everyone. This afternoon, we issued a press release containing the company's financial results and corporate update for the first quarter ended March 31, 2020. That release which included a series of financial tables for the period can be found on our website at www.cumberlandpharma.com. Also please note that on today's call we may talk about forward-looking statements within the meaning of the Private Securities Reform Act of 1995. And because these reflect the company’s current views and expectations concerning future events, any such forward-looking statements may involve risks and uncertainties. There are many factors that could affect the company’s future results, including but not limited to natural disasters, public health epidemics and other events beyond our control as more fully described under the caption Risk Factors in our Form 10-K and any updates we file with the SEC. Any forward-looking statements made during today’s call are qualified by those risk factors. And despite our best efforts, actual results could differ materially from our expectations. And the information shared on the call today should be considered current as of today only. Please remember that the company does not assume any responsibility to update forward-looking statements whether as a result of new information or due to future developments. Also during today’s call, we will be referring to several of our marketed brands. Full prescribing and safety information for each brand can be found through links to each of the individual product websites on our corporate site cumberlandpharma.com. Also we will provide some non-GAAP financial measures with respect to our performance today. And an explanation and reconciliation to GAAP measures can be found in our earnings release and financial tables. With us on today’s call are A. J. Kazimi, Cumberland’s Chief Executive Officer; Marty Cearnal, our Chief Commercial Officer; and Michael Bonner, our Chief Financial Officer. And I'll now turn the call over to A. J. to begin our corporate update and discussion of the company’s performance.

Good afternoon, everyone and thanks for joining us. We appreciate your participation today in the call. And as Erin noted, we'll provide an overall company update along with the review of our first quarter financial results. I'll begin with the overview and discussion of recent company developments, and then Marty will provide an update on our commercial activities. I'll share report on our clinical efforts and Michael will summarize our first quarter financial results, before we finish with some closing remarks and then open the call to any questions. So, I'd like to start by saying on behalf of all of us at Cumberland, our thoughts do go out to those suffering from the novel coronavirus, as well as those who have lost their employment. And we'd also like to extend our sincere gratitude to everyone on the front lines that who are treating patients and performing essential jobs that allow our country and society to function. And I'd like to thank our outstanding team for their dedicated efforts to keep our medicines available for those patients that need them. I'm pleased to report Cumberland has remained open for business during the pandemic, as we’re considered to be an essential business by the United States Department of Homeland Security. And turning to our first quarter financial results, I'm also pleased to report a solid performance despite the impact of the pandemic. You see total revenues from ongoing and discontinued operations were $9.1 million. Revenues from the ongoing operations were $8.3 million during the quarter. And we also received $750,000 an additional revenue associated with the return of the U.S. rights to Ethyol and Totect. Recall, that divestiture resulted from our strategic review and our reprioritization of the company's product portfolio. Adjusted earnings for the first quarter were $0.2 million or…

Thanks, A.J. Here at Cumberland, we're taking appropriate action to protect our employees, secure our supply chain and support the patients who can benefit from our medicines. Given the changes in access to hospitals and physician offices, our national sales organization has shifted their promotional efforts to other forms of support, including electronic and telephonic communications. Our primary target markets are hospital acute care, and office based gastroenterology. These medical specialties are characterized by relatively concentrated prescriber bases that can be supported effectively by our team of experienced sales professionals, as they make calls, provide information and supply product samples as requested. We held a very productive national sales meeting during the first quarter of this year, and provided our sales division with additional training and support for navigating the current healthcare landscape. It was our first virtual sales meeting held over three days with good participation, and all agenda items covered. Additionally, we augmented our internal commercial capabilities through targeted use of digital media and a series of co-promotion partnerships. We believe that all these arrangements represent an efficient way to expand our reach, round out our coverage and ensure the survival of our company as the novel coronavirus impacts the country. We planned for two launches during 2020. The first involves our next generation Caldolor product which we launched during the first quarter of this year. This new injectable ibuprofen formulation comes in a ready-to-use bag that can be administered without dilution for further treatment of pain and fever. As a non-steroidal anti-inflammatory drug or NSAID, Caldolor may be used as the sole method of treatment for mild to moderate pain, or as part of a multi modal treatment for severe pain. The new presentation of Caldolor comes in a pre-mixed bag containing 800 milligrams of ibuprofen in…

Thanks for that update, Marty. I'd now like to review the product development efforts underway here at Cumberland. We believe that FDA approved brands are valuable assets. We continue to explore new ways our products can be delivered, and new patient populations that they can benefit. For example, our Caldolor product is now available nationally in the new presentation that Marty mentioned. The product was initially approved for the treatment of pain and fever in adults, and we then secured approval for its use in pediatric patients, six months of age and older. If you've been following Cumberland, you remember that last year we initiated a study to evaluate Caldolor in newborns, from birth to six months of age. While, the trial enrolled 24 newborns at four medical centers around the country, and it was designed to evaluate the safety and pharmacokinetics of Caldolor in these youngest of patients. We completed enrollment in that multicenter study and then announced topline results during the first quarter of this year. Caldolor was well-tolerated in these very young children, and very importantly, there were no safety concerns noted. We have finalized the study reports, submitted it to the FDA and are now preparing for an appropriate publication. Meanwhile, we've also been evaluating our new chemical entity ifetroban, through a series of clinical programs. Ifetroban is a selective and potent antagonist, that blocks activation of the thromboxane receptor. This receptor is found in many tissues and plays a key role in multiple biological processes. Because of its activity and mechanism of action, we're investigating ifetroban for several patient indications that represent unmet medical needs and potential orphan drug candidates. We have completed three pilot Phase II studies, involving patients suffering from Hepatorenal Syndrome, from Portal Hypertension, and from aspirin-exacerbated respiratory disease, a severe form…

Thank you, AJ. For the three months ended March 31, 2020, net revenues from ongoing operations were $8.3 million. We also recorded an additional $750,000 during the first quarter associated with the return of the U.S. rights Ethyol and Totect. The total revenue from the ongoing and discontinued operations in the first quarter was $9.1 million. During the prior year period, net revenues from continuing operations were $8.7 million, which excludes sales from the divested product rights I mentioned. Net revenues by product for the first quarter included $3.3 million for Kristalose, $2.4 million for Vibativ, $1.1 million for Caldolor, and $0.7 million for Acetadote. Total operating expenses for the three month period were $10.2 million, similar to the $10.1 million for the prior year period. Adjusted earnings for the first quarter were $0.2 million or $0.01 per share, compared to $0.7 million or $0.04 per share during the same period last year. As of March 31, 2020, we had $97.3 million in total assets, including $27 million in cash and investments. Liabilities totaled $47.5 million, including $18.5 million on our credit facility. Total shareholders' equity was $49.9 million at the end of the quarter. As a reminder, the financial terms for the Vibativ acquisition included a $20 million payment to Theravance upon closing. The initial payment was funded by a revolving credit facility with Pinnacle Bank. We subsequently provided Theravance with a $5 million milestone payment, and are providing royalties based on product sales. Also recall, we accounted for the acquisition as a business combination, a total of $34.2 million in new assets were added as a result of the Vibativ acquisition, including $21.6 million in inventory, $11.8 million of intangible assets and $0.9 million of goodwill. Due to amortization of intangibles and sales of inventory, the value of…

Thank you, Michael. Well, as you can see, we continue to make progress towards our goal of building a specialty pharma business that delivers sustained growth, profitable operations and long-term value. Our key catalyst moving forward remain the same. They include contributions from the Vibativ acquisition, rolling out our new Caldolor product and launching our RediTrex product line. And we believe all three brands can be important contributors to our business for years to come. We also believe we can add significant value by progressing and expanding our clinical programs. They feature product candidates that address markets that are quite large for a company our size. And presently, we are facing the same headwinds that are affecting all companies that rely on hospital admissions and patient visits, an elective surgeries to drive their revenue. Therefore, we are implementing measures to try to lessen the impact of the coronavirus on our business here in 2020. Given the limited visibility of both the positive and the negative impacts of COVID-19 at this time, we believe it's prudent for us to withdraw our previously issued 2020 guidance. Meanwhile, we continue to monitor the national health and economic situation, so we can maintain our employees' safety and well-being while also keeping our business operating and secure. As always, we'll manage our operations with financial discipline, and we'll work to maintain a favorable financial position. And please note, the interest of this organization, our management and our shareholders remain closely aligned, given the significant insider ownership in the company. And finally, I'd just like to say we remain focused on our mission of advancing patient care to the delivery of high-quality pharmaceutical products, and we aim to deliver on that mission here in 2020 and beyond. So with that review and update, now let's open the call to any questions you may have. Operator, can you please proceed?

[Operator Instructions] And our first question comes from the line of Andrew D'Silva with B. Riley FBR. Your line is now open.

Yes, thanks. Good afternoon. Great to hear everybody sounds healthy. Just a couple of quick questions on my end. So just to start, have you seen any forward purchasing or stocking for any offerings during the quarter due to COVID-19? And so I'm thinking specifically of Vaprisol Vibativ. They seem to fit the build there.

Marty, do you want to take that one?

Yes. So we've not really seen a lot of forward purchasing. We did have as we related Andy, three special programs. They were really designed to meet our current needs as opposed to forward stocking. So, I think that it's safe to say that as the country reopens, we can expect a fairly normal pattern of purchasing for our products to emerge.

Okay, great. And then, just as it relates to your exposure to elective procedures, do you have any sense of maybe, typically what percent of your business is tied to elective procedures?

Marty?

Well, for Caldolor, it's a very significant percentage. And the surgeons that we maintain consistent contact with are saying that, as the hospitals open up, there's going to be a pretty significant backlog of patients coming in that have not been able to get access for elective procedures during the pandemic. So, we will expect to see, hopefully, some benefit from that for Caldolor as the hospitals reopen, and these elective this backlog of elective surgeries, in fact, gets realized.

Got it, perfect. And then just two more quick ones. As it relates to RediTrex, are you still on track to launch this year? And I'll actually just lump my last question in here as well. Can you also give us a sense when we should expect you to initiate a Phase III or a pivotal study for any of the ifetroban indications? And I was just kind of looking over some notes. I think you commenced the HRS study back in 2011. So I was just curious maybe what's the realistic timeline before we see these advance to pivotals.

Marty, can you start with the outlook and plans for RediTrex? Then I'll be happy to handle the clinical questions.

Certainly. RediTrex is on track for launch later this year. We are actively engaged in development of panel of experts of completing the final stages of our market research, developing our draft promotional materials and patient support materials. So there's a full catalog of activities underway. And we expect that we will be in a position to launch the product later this year.

Thank you, Marty. And then on the clinical front, as I mentioned, we did complete the Caldolor or pediatric study and wrapped up that effort with finalizing the report and sending it off to the FDA. However, as I mentioned, enrollment in the ifetroban studies has slowed. We're in a bit of a low at the moment, because of the closure and change of access at the country's hospitals and the various sites where we are doing the work. We expect that to rebound as the country reopens and the years goes on. It's very hard to predict when these studies are going to be done and we move to Phase III, because it's all tied to patient enrollment. You did mention Hepatorenal Syndrome, and again, we've completed three ifetroban studies. We’ve got three more underway. And rather than go broadly in parallel what we're going to do is pick the programs that will help us get to the market the fastest, and really focus our resources and our efforts in driving those. And we'll make that decision once we have the data from the three studies that are underway.

Okay, great. Well, I actually add-on. As it relates, for example, to the HRS study. I guess it's been completed -- from my understanding, the Phase II has been completed for a little while now. What additional information do you need to be able to decide if you're going to progress to next stage in clinical development or not?

I'm happy you asked that question. It's a matter of seeing the data from the other studies, so we can determine where to deploy our resources.

Okay.

Yes. We want to be careful about our R&D spend and keep it in line with our revenues to maintain positive cash flow from operations, which we've been able to achieve.

Okay. No, I get what you're saying. Now, that makes sense. All right. Great. Well, I'm glad to hear everybody sounds healthy and best of luck going forward.

Thank you.

Thank you [Operator Instructions].

Well, thank you everyone for joining the call today. And as we've mentioned in the past, we understand that many prefer a private discussion with management. And that's fine. If you'd like to do that just please reach out to Erin Gull here, and she'll help us schedule such a call. We appreciate your time and interest in our company. And we do look forward to providing another update after the end of the second quarter.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.