Erin Smith - Corporate Relations A. J. Kazimi - CEO Martin Cearnal - CCO Michael Bonner - CFO

Thank you for joining the Cumberland Pharmaceuticals Second Quarter 2016 Financial Results Conference Call. Please note that this call is being recorded at the company's request and will be archived on the company's website for one week from today. I would now like to introduce Erin Smith, who handles Corporate Relations for Cumberland Pharmaceuticals. Erin, please go ahead.

Hello, everyone. Before we begin today, I'd like to point out that earlier today we issued a press release containing the company's financial results for the second quarter ended June 30th 2016. That release includes the second quarter financial statements and can be found on the company's website at www.cumberlandpharma.com. I'd now also like to share the following Safe Harbor language. Please note that 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. Any 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. We recognize that future results could differ materially from the views expressed in today's call and we don't assume any obligation to publicly update any forward-looking statements whether as a result of new information or future developments. We will also provide some non-GAAP financial measures with respect to our performance today. A reconciliation to GAAP measures can be found in our earnings release and its related financial table. Also please note that this conference call is being webcast through our website and will be available there. I'll now turn the call over to our Chief Executive Officer, A.J. Kazimi, to begin the discussion of the company's results and performance.

Thank you, Erin. Good afternoon, everyone. We appreciate you joining us as we report on our second quarter 2016 results. Here with me today also on the call are Cumberland's Chief Commercial Officer, Marty Cearnal and our Chief Financial Officer, Michael Bonner. These are exciting times here at Cumberland. The company is embarking on a path, which we believe will launch us on to a growth trajectory. Many of the steps needed to do that have been put into place over the last year and we now expect to see the results from those efforts. Today, we report on the various initiatives underway and we'll provide an update on recent developments. We’ll follow with a discussion of our commercial activities and provide an overview of our pipeline efforts. We’ll then review our financial results and finish with a summary of the company's strategy before then turning the call over to any questions. So, before I move on to discuss our growth initiatives, I'd like to summarize our most recent quarterly financials. Adjusted earnings for the second quarter 2016 were $0.7 million or $0.04 a share, bringing our adjusted earnings for the first half of the year to $2.1 million or $0.13 a share. Kristalose remained our largest selling brand and Caldolor, our fastest growing product. We also continued to enjoy a significant contribution for the next generation of Acetadote line, as well as the on-going sales from our newer brands, Vaprisol and Omeclamox pack. During the second quarter, our balance sheet remained strong with just under $90 million in total assets and $50 million in cash and investments. At the end of June, total liabilities were approximately $13 million, resulting in $75 million in total shareholders' equity. Also, please remember we had significant tax loss carry forwards of approximately $43…

Thank you. As A. J. mentioned, we're gearing up to launch Ethyol in the US. It represents an exciting opportunity for our hospital sales organization, as they will be reintroducing branded Amifostine to a new generation of oncologists. It was originally developed as a pharmaceutical product to protect certain cancer patients from the damaging side effects of radiation therapy. It is also used to protect internal organs from the harmful effects of chemotherapy. For the last several years, no company has been educating physicians on the benefits Amifostine for their patients. While many centers across the country remain committed to the product, we see an opportunity to expand the current level of use and provide a meaningful benefit to patients. We will introduce Ethyol following a national sales meeting this fall. Currently, all the training and communication materials are being prepared and finalized for the product launch. During the second quarter, we kicked-off our initiative and support for the newly approved Caldolor pediatric indication. We've received a positive reception from children's hospitals across the country. Caldolor is an injectable form of ibuprofen, designed primarily for hospitalized patients who are not able to take their pain or 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. Caldolor is our largest selling hospital product and the addition of this new indication should provide a catalyst for the on-going growth of the brand. Early results are encouraging with month-over-month sales growth since the pediatric indication was launched. And while we now have over 1,300 hospitals stock Caldolor with lower across the country, the full impact of the pediatric indication will not be realized until we complete the formulary…

Before referring to the financial results, I’d like to discuss the clinical developments here at Cumberland. As you may recall, last year we completed a phase II with Hepatoren, an injectable form of ifetroban in patients with hepatorenal syndrome. These patients severed from progressive kidney and liver failure leading to a high mortality rate with no approved treatment for this condition in the United States. Last year, we also announced and completed another phase II study evaluating Boxaban, an oral formulation of ifetroban just time in patients suffering from a form of asthma, known as aspirin exacerbated respiratory disease. In both phase II studies, we found ifetroban was well tolerated in these new patient populations, and we also identified encouraging signals of beneficial activity. We’re now finalizing our analysis and reports from these studies and getting them ready for submission to the FDA. We’re also working with experts in each field to plan the net steps and to continue both of these development programs. Ifetroban is antagonist, which blocks activation of and signaling through the [indiscernible] receptor. This particular receptor is found in many tissues and plays a role in multiple biologic processes. We’re developing ifetroban through a collaboration with scientist at Vanderbilt University. And the on-going work there has resulted in additional favorable non-clinical findings, which provide greater insight into ifetroban’s mechanism of action and potential. And based on those discoveries, we’ve launched the third ifetroban development program under the brand name Vasculan. And as I mentioned in my opening remarks, we’re now evaluating Vasculan for the treatment of systemic sclerosis, a deadly auto-immune disorder that involves [indiscernible], a thickening of the skin and internal organs. Unfortunately, there is no approved treatment for this disease, but we’re excited to investigate Vasculan for the life-threatening condition that these patients face. A multi-centered phase II study is underway and we’ll keep you posted as this effort progresses. That completes the clinical update. I’ll now look to our Chief Financial Officer, Michael Bonner, for the financial review. Michael?

Thank you, A. J. For the three months ended June 30, 2016, net revenues were $7.4 million compared to $8.9 million for the prior-year period. Net revenues by product for the second quarter were $3.6 million for Kristalose, $1.9 million for Acetadote, including our Authorized Generic, $0.6 million for Caldolor, $0.6 million for Omeclamox-Pak and $0.4 million for Vaprisol. Net revenues for the six months ended June 30, 2016 were $15.2 million, compared to $17.6 million for the prior-year period. During the second quarter, Kristalose remained our largest selling product and Caldolor, our fastest growing brand with sales up 37% over the prior-year quarter. Total operating expenses for the three months ended June 30, 2016 were $7.5 million, compared to $8.2 million for the prior-year period. Operating expenses decreased during the quarter, including a $0.3 million improvement in general and administrative expense. Total operating expenses for the first six months of 2016 were $15.8 million, compared to $16.9 million for 2015. Please note that these operating expenses did include expenditures in preparation for the upcoming Ethyol product launch. While we have started investing in this new brand, we have worked to manage our overall expenditures in line with our revenues. We believe that adjusted earnings is an important financial measure, but it’ useful in evaluating the company's operating performance. We take into account certain non-operating expenses and are careful to remain consistent among quarters and to provide a reconciliation to our GAAP earnings. Adjusted earnings for the second quarter were $0.7 million or $0.04 per share compared to $1.6 million or $0.09 per share for the prior-year period. Adjusted earnings for the six months ended June 30, 2016 were $2.1 million or $0.13 per share, compared to $3.2 million or $0.18 a share in 2015. As of June 30, 2016,…

Thanks, Michael. Our goals are straightforward, to build a specialty pharmaceutical company that delivers sustained growth, profitable operations and long-term value. Our strategy for achieving those goals starts with our current product lines. We believe that an FDA-approved brand is a valuable asset and we feel fortunate to now have six FDA-approved products in our marketed portfolio. Our commercial team is working diligently to make the most of those products, we have a valuable infrastructure supporting these brands that includes two national sales forces and a team of marketing professionals overseeing their promotion. Also, as I mentioned in my opening remarks, we’ve taken a series of steps to increase the long-term growth through our product lines. We’re augmenting our reach through co-promotion partnerships such as the one we launched with Piramal Critical Care to support our hospital products. We are also working to expand the use of our marketed products through the addition of new indications, such as the Caldolor pediatric labelling. We’re opening international markets for our brands and we’re enjoying growing sales in both Australia and South Korea, and we’ll continue to maximize the potential of our marketed products through additional co-promotion arrangements, additional label expansion and additional international initiatives. Meanwhile, our product and business development colleagues are working to selectively add new brands to our portfolio. We now have three late-stage development candidates Hepatoren, Boxaban and Vasculan, and we’re planning to add more. We believe significant value can be delivered by progressing and registering these orphan drug candidates that address unmet medical needs. A longer-term pipeline of innovative candidates was progressing at CET, an association with our university collaborators and an on-going series of NIH-funded grants. We'll plan to announce each of those products emerging from CET, once we've completed their formulation established initial proof of concept…

Ladies and gentlemen, that concludes the company's presentation and we will now open the call for questions. [Operator Instructions] Thank you. At this time, I'd like to turn the call back over to management for any closing remarks.

Well, thanks everyone for joining our call today. We do appreciate your time and your interest in Cumberland, and we look forward to providing another update after the end of the third 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, using the access code 478-968-38. 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.