Cumberland Pharmaceuticals Inc. (CPIX) Earnings Call Transcript

Good afternoon, everyone. My name is A.J. Kazimi, and I'm Chief Executive Officer at Cumberland Pharmaceuticals, and I'm also joined by Dr. Ines Macias-Perez, Vice President, Product Development, who manages our clinical and regulatory activities. Today, we're issuing a press release providing an update on our product development activities, which can be found on our corporate website. We'd now like to share that update with you through this presentation. We appreciate this opportunity to introduce you to the new strategy for our company. And I'd like to start with a question. Investors may ask why Cumberland why now? Well, first, we have significant value creation opportunities. Our lead program in Duchenne muscular dystrophy is advancing towards a new drug application and behind it are multiple Phase II programs built on the same core molecule. Second, we are targeting attractive markets in which the addressable patient populations have limited or no effective treatment options. In Duchenne cardiomyopathy, for example, there is no approved therapy today. Third, we have compelling Phase II data in Duchenne, a dose-dependent improvement in heart function with a 5.4 percentage point difference in ejection fraction versus control corroborated by biomarkers. And fourth, we now have a defined path to an NDA. Today, I'm pleased to announce that we held a pre-NDA meeting with the FDA this fall. And given the urgent medical need, we've decided to proceed with the submission of an NDA for this program. And after the pre-NDA meeting with FDA, they granted our request for a rolling submission of the NDA. Next, we have an established safety profile with roughly 1,400 subjects dosed across 30 clinical studies. Sixth, Cumberland possesses the worldwide Cumberland rights for all its candidates in clinical development. Seven, we feature a strong balance sheet that's able to fund our clinical studies. And finally, we expect meaningful near-term news flow led by our rolling NDA submission and long-term extension data for Duchenne's. Over the rest of today's presentation, we'll walk you through each of these points in more detail. But before we go further, I'd like to briefly note that today's presentation does include forward-looking statements, including statements about our regulatory plans and our financial projections. For further information, please see our SEC filings, including our annual report and quarterly updates, which outline our risk factors as well as our corporate website. So let me give you some context on how we've gotten here. You may know Cumberland as a specialty pharmaceutical firm with a portfolio of FDA-approved brands. Well, today, we're a very different company. This summer, we closed on a strategic transaction, which integrated our commercial products and organization with the U.S. branded business of Apotex Health, the largest pharmaceutical company based in Canada. Apotex went on to conclude a successful initial public offering and listing on the Toronto Stock Exchange and featured our transaction as a milestone in building their U.S. branded business. For Cumberland, we unlocked significant value, receiving over $100 million associated with the transaction, eliminating 75% of our expenses and dramatically improving our share price. Meanwhile, we retained our pipeline of new medicines for the future, which we believe is the most valuable part of our business. So looking ahead, we'll sharpen our focus on advancing new therapies for patients with significant unmet medical needs. And you see this is a defining moment for Cumberland and an important step in our evolution. With a strategy focused on late-stage clinical development and a promising pipeline, we're well positioned to build on our experience in developing, registering and delivering differentiated medicines. Today, our development efforts are led by ifetroban, a novel oral therapy we're evaluating across several indications. Our clinical programs are designed to address serious conditions in which patients continue to face significant unmet needs. Now let's look a little more closely at the asset behind this opportunity. This slide summarizes what makes ifetroban a derisked molecule and we'll expand on each point as we proceed through today's presentation. First and most importantly, we have positive Phase II data in Duchenne muscular dystrophy, where ifetroban improved heart function over 12 months against the disease course in which heart function is expected to decline. Heart failure is the leading cause of death in these patients. So this is a meaningful place to show such a benefit. Second, we have an unusually well-established safety profile for a compound at this stage. Third, we hold 3 key FDA designations for the Duchenne program, Orphan Drug, Rare Pediatric Disease and Fast Track, each providing important benefits for our efforts. Fourth, it's a platform, not a single shot on goal, one molecule studied in multiple indications with additional expansion work underway. Fifth, our team has a proven record of taking products through the FDA and to the market. And sixth, we're well capitalized following our recent transaction with and we carry no debt. So here's the company in numbers. Over $100 million in net proceeds from the divestiture of our commercial assets, 3 core clinical programs, all in Phase II and roughly 30 clinical studies of ifetroban completed to date with 1,400 subjects dosed. On the left, our record. Cumberland has a long history of successfully developing branded products and gaining FDA approval for them. That experience is directly relevant here because the hardest part of a program like ours involves not just the science, but also the regulatory pathway and expertise needed to navigate it. We believe the sale of our commercial portfolio was in many ways a validation of that track record and allows us to now be singularly focused on advancing ifetroban. On the right, the asset itself, our first new chemical entity originally discovered and developed by Bristol Myers Squibb. We manufactured both intravenous and oral formulations, and we've advanced development programs in collaboration with the guidance of research teams and clinical teams at the Vanderbilt University and their Medical Center. So with that overview, I'd now like to -- like to pass the presentation on to Ines to walk you through ifetroban and its clinical profile. Ines?

Thank you, A.J. Let me spend a moment on the molecule itself because everything else follows from it. Ifetroban is a once-daily oral therapy taken as capsules in a fasted state. It works by blocking a single receptor called the thromboxane receptor. What makes that receptor interesting is where it lives on. It's on heart muscles, it's on immune cells and it's on smooth muscle and lines blood vessels. Blocking this one receptor interrupts three injury pathways at once. It can dampen the inflammatory signaling implicated in tissue injury. It targets fibrosis, which is simply scarring and scarring contributes to progression in all 3 of our diseases. And it relaxes blood vessels, which is intended to improve blood supply to the affected tissue. The molecule is also well characterized with approximately 1,400 subjects dosed across roughly 30 clinical studies and about 90 patient years of exposure in Duchenne patients. The key point is one target, many tissues. A shared biological pathway is what makes it rational to develop one molecule across 3 very different diseases. Here is the pipeline on one page, 1 molecule, 3 core programs and an expansion opportunity. Today, we'll focus on Dyscorban for the cardiomyopathy associated with Duchenne muscular dystrophy, which is our lead program. We have completed the double-blind portion of Phase II held our pre-NDA meeting with the FDA and now plan to submit a new drug application. Our Phase IIa study in systemic sclerosis is complete with top line results now reported and our Phase II study in pulmonary fibrosis is enrolling. And in oncology, a Phase IIa study in metastasis prevention sponsored by Vanderbilt University Medical Center has also been completed. Here's the shape of the news flow ahead of us. Again, focusing on Duchenne muscular dystrophy, we plan to initiate our rolling NDA submission followed by open-label extension data at 24 and 36 months, which is going to be included in the NDA, presentation of those data at a scientific conference and completion of the NDA submission. In systemic sclerosis, following our top line results, we plan to submit the clinical study report to the FDA and complete correlative biomarker and cardiac imaging work that will inform our decision on further development. Let's turn now to our lead program, ifetroban in Duchenne muscular dystrophy, where we are addressing cardiomyopathy. First, some background on the disease. Because the natural history is central to understanding our data. Duchenne muscular dystrophy is a rare fatal genetic disorder that causes progressive deterioration of skeletal, heart and respiratory muscle. It affects boys almost exclusively. Over the last 2 decades, respiratory care has improved and patients are living longer. The consequence is that the heart has become the limiting factor. Heart failure is now a leading cause of death in Duchenne. Current treatments like ACE inhibitors, ARBs, ARNIs, beta-blockers, aldosterone inhibitors, they all slow the decline in heart function, but they don't stop it and they don't reverse it. So early cardio protection is a genuine unmet need. Two other points worth noting. Cardiac function in these patients is closely monitored using cardiac MRI and echocardiography. So the endpoint is measurable and routinely used in clinical care. And because ifetroban acts on the downstream consequences of dystrophin loss rather than on the genetic mutation itself, it has the potential to benefit patients regardless of their underlying mutation type. Its mechanism is also distinct from current cardiac therapies, and it was studied as an add-on to standard of care, not as a replacement for it. Let me turn to the market opportunity for Dyscorban in DMD cardiomyopathy. There are roughly 15,300 Duchenne patients in the U.S. with more than 300 new cases each year. Virtually all of them develop cardiomyopathy as they reach adulthood. Yet today, there are no approved therapies for DMD cardiomyopathy. This is now the leading cause of death in these patients. The development pipeline is thin, just 3 candidates and Dyscorban is the only oral candidate of the 3 taken once daily. So how does ifetroban protect the heart? The Duchenne gene mutation produces weakened muscle cells. That leads to calcium overload inside heart cells, oxidative stress, the death of those cells and then progressive scarring of the heart muscle. Ifetroban selectively blocks the thromboxane receptor on those heart muscle cells and on the immune smooth muscle and endothelial cells around them, blocking that damaging signal reduces cell injury. Less injury means less scarring and less scarring means less loss of heart function over time. The preclinical work laid the foundation for all of this, and it was published in the Journal of the American Heart Association. In 2 severe mouse models of Duchenne, ifetroban extended survival compared with control animals. It improved cardiac index and stroke volume and in plain terms, the heart pumped better. In a separate study, ifetroban also reduced the abnormal constriction of coronary artery seen in young DMD mice. That rationale translated directly into our clinical program, which we called the FIGHT DMD trial. The FIGHT DMD trial was a randomized, double-blind, placebo-controlled Phase II study. 46 patients with Duchenne were randomized, all aged 7 years of older across 10 leading pediatric centers in the United States. Patients were eligible regardless of mutation type and all of them remained on their standard background therapy. The treated patients were in 3 arms for 52 weeks of treatment, high dose of ifetroban at 300 milligrams a day, low dose at 100 milligrams a day or placebo. The study was powered on the change in left ventricular ejection fraction at 12 months measured by cardiac MRI. Ejection fraction is simply the share of blood the heart's main chamber pushes out with each beat, the standard measure of pumping function. We also collected blood biomarkers, including NT-proBNP and a proteomic panel. Now to the results, which we previously announced. On the left, the heart pumping function. The between group difference in ejection fraction at 12 months was 5.4 percentage points in favor of the high dose of ifetroban against a control group of placebo patients together with a matched natural history cohort, statistically significant with a p-value of 0.002. And on the right, NT-proBNP, a blood biomarker of strain on the heart, fell in the high-dose group relative to the control group by an average of 54 picograms per milliliter with a p-value of 0.017. Why does this matter? In Duchenne patients, ejection fraction declined by a median of about 3 percentage points in a year. And in the natural history database, each 3-point lower ejection fraction carried a hazard ratio of 1.32 for all-cause mortality. In other words, lower heart function is associated with shorter survival. Against that backdrop, we saw improvement rather than decline. The effect was dose-dependent and the biomarker changes moved in the direction you would expect if the heart muscle were being protected. I would note that the comparison includes a natural history cohort rather than a single head-to-head trial, so these cross-study comparisons are illustrative. This chart makes the dose response easier to see. Looking at percentage point changes over 12 months, high dose ifetroban improved ejection fraction by 1.8 percentage points. Low dose held function essentially flat, placebo declined by 1.5 points. The placebo plus the natural history cohort declined by 3.6 points, which gives the 5.4 difference I described. And the matched natural history patients alone dropped by 4.3 points. What we find compelling here is not any single number, but the ordering of them. More drug produced more benefit in a consistent stepwise way, a pattern consistent with the drug effect. We also looked at what was happening in the blood using a proteomic panel, essentially a survey of circulating proteins. Two markers associated with protection and repair went up, FGF16, a heart protective factor rose 2.4-fold and TSPAN7, a tissue repair factor rose 2.1-fold. Two markers of cell damage went down. MYL3, a marker of heart muscle injury, fell by 30% and MYOD1 by about 50%. The importance of this slide is convergence, functional imaging, a heart strain marker and a proteomic panel, all pointing in the same direction. When different types of evidence agree, the biological case is stronger than any one of them alone, although the proteomic findings are exploratory. Now let me turn to safety, which is one of the most distinctive features of this asset. Across the full ifetroban program, approximately 1,400 patients have been dosed in roughly 30 clinical studies. In Duchenne specifically, participants in FIGHT DMD have now accumulated approximately 90 patient years of exposure to ifetroban and no serious adverse events during the 12-month double-blind period was assessed as related to study drug. Ifetroban was given on top of standard Duchenne therapies and through up to 36 months of treatment across the Phase II trial and the open-label extension. There have been no treatment-related serious adverse events or new safety concerns. The FDA has recognized this program in several ways. We hold orphan drug designation, which brings development incentives and a period of market exclusivity upon approval. We hold rare pediatric disease designation, which makes the program eligible for a priority review voucher. A transferable asset that historically has been sold for substantial sums, and Congress reauthorized the voucher program earlier this year. Earlier this year, we were granted Fast Track designation, which provides for more frequent interaction with the agency and can support an expedited review. We have now decided on our path forward. Following our end of Phase II meeting in September 2025 and a follow-up Type C meeting in January 2026, the FDA recommended a Phase III trial and raised questions on the Phase II results, including the amount of missing data, the endpoint, the comparator and statistical analysis plan. In response, we provided additional data supporting our efficacy findings and documentation of how the statistical analysis plan was developed. We then held a pre-NDA meeting with the agency in September where the content and format of our planned submission was discussed. We are proposing FIGHT DMD as the pivotal study, combined with comparison data from 2 natural history databases. FDA raised concerns regarding the needed substantial evidence of efficacy and requested additional analysis, which we will provide in the NDA. Following that meeting, the FDA granted our request for rolling review, which allows completed sections of the application to be submitted for review before the full NDA is filed. The submission will also include our open-label extension data, including cardiac MRI at month 24 and 36, our published preclinical data, manufacturing information and a safety database of approximately 1,400 subjects. The FDA has also conditionally accepted Dyscorban as the proprietary name. Finally, the program is supported by multiple issued patents covering ifetroban for cardiac fibrosis associated with DMD with terms through May 2035. Now let me move beyond Duchenne to the rest of the franchise, 2 additional Phase II programs in high-value diseases with unmet medical needs. Both of these programs use the same molecule supported by the same safety database. That is what makes the expansion efficient. On the left, systemic sclerosis, often called scleroderma, under the brand name Vasculan. It's a debilitating chronic autoimmune disease that causes thickening of the skin and fibrosis of the internal organs. It has the highest death rate of any rheumatic condition with average survival of about 11 years from diagnosis. There's no approved therapy for the underlying disease itself. The approvals that exist address specific organ complications. We recently announced top line results from our Phase IIa ASSIST-SSc trial. Ifetroban was generally well tolerated with a safety profile consistent with our prior experience and no serious adverse events during the 12-month treatment period was assessed to be related to study drug. The trial was not designed or powered to evaluate efficacy. As next steps, we plan to submit the clinical study report to the FDA and complete correlative biomarker studies and cardiac imaging evaluations from patients in the open-label extension, which will inform our decision on further development in systemic sclerosis. On the right, idiopathic pulmonary fibrosis under the brand name Fibroban. The most common of the progressive fibrosing interstitial lung diseases in which irreversible lung scarring drives declining function and early mortality. It is an orphan disease. Approved antifibrotic therapies slow the decline in lung function, but they do not stop it and side effects limit their use for many patients. Our Phase II study called Fighting Fibrosis is now enrolling with an interim efficacy ahead. I'll now hand it back to A.J to close the presentation.

Thank you, Ines. Well, let me turn to our balance sheet. As I mentioned, the recent divestiture of our commercial products generated over $100 million in net proceeds. That's nondilutive capital based on what we consider an attractive valuation and in itself a validation of our team's ability to develop products, take them through approval and monetize them. We carry no debt. The result is a clean, focused balance sheet that is able to fund our clinical development, including our planned NDA submission for Dyscorban with a reduced need for dilutive capital. We believe that combination is unusual clinical stage upside without significant financing overhang that typically accompanies it. So in summary, we have significant value creation opportunities led by our planned NDA in Duchenne. We have compelling clinical data results for the DMD program. We have an established safety profile. We own the worldwide commercial rights to our candidates in development. We're in a solid financial position, and we expect meaningful near-term news flow. We believe the combination of positive Phase II data a defined path to an NDA, a derisked molecule and a funded balance sheet is rare in a company of our size and is not yet reflected in our valuation. We are reimagining treatment across multiple diseases with a derisked molecule led by our Duchenne program, featuring a series of attractive niche markets, which represent large financial opportunities. Proven positive Phase II data safe and established safety profile and scalable, multiple programs from one core molecule. I'd like to thank you for participating in this update and overview of Cumberland Pharmaceuticals. A copy of these slides will be available on our corporate website, which is www.cumberlandpharma.com. And we do recognize our shareholders typically prefer a private follow-up discussion. And if you would like to hold one, please just let us know, and we'll make the arrangements with you. So that concludes today's update, and we'll sign off.