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These risks are discussed more fully in the section titled “Risk Factors.” These risks and uncertainties include, but are not limited to, the following:
−Removed: • Global and national conditions and events, including, but not limited to, rising interest rates, increased inflation, supply chain disruptions, labor conditions, pandemics and public health crises and international conflict, may adversely affect our business, revenues, results of operations and financial condition.
+Added: • Global and national conditions and events, including, but not limited to, rising interest rates, increased inflation, supply chain disruptions, labor conditions, significant natural disasters, pandemics and public health crises and international conflict, may adversely affect our business, revenues, results of operations and financial condition.
• Failure to implement strategies to enhance our performance could have a material adverse effect on our business, results of operations and financial conditions.
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• Our business depends on the successful protection of our intellectual property rights and our product candidates becoming approved by regulatory agencies, commercially viable, and accepted by the market.
+Added: • Our business is subject to cybersecurity and artificial-intelligence related risks, including risks related to system failures, security breaches, including any cybersecurity incidents, adverse events or other disruptions within our information technology infrastructure at our corporate headquarters;
+Added: or intellectual property infringement.
• Our business faces a serious financial risk if generic products that compete with any of our branded pharmaceutical products are approved and sold because sales of our products will be adversely affected and our business may not recover the capital costs of bringing that product to market.
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RISKS RELATED TO OUR BUSINESS
−Removed: Global and national economic conditions and events, including, but not limited to increased inflation, rising interest rates, supply chain disruptions, labor conditions, pandemics and public health crises and international conflicts, could affect our future access to liquidity and materially adversely affect our results of operations and financial condition.
+Added: Unfavorable global and national economic conditions and events, including, but not limited to increased inflation, rising interest rates, supply chain disruptions, labor conditions, pandemics and public health crises and international conflicts, could affect our future access to liquidity and materially adversely affect our results of operations and financial condition.
Our business and results of operations could be adversely affected by changes in global or national economic conditions.
−Removed: These conditions include, but are not limited to, increased inflation, high and rising interest rates, supply chain disruptions, labor conditions, the negative impacts from pandemics and public health crises (including any lingering or recurring adverse impacts from the COVID-19 pandemic) and the negative impacts resulting from the ongoing conflicts in Eastern Europe and the Middle East.
+Added: These conditions include, but are not limited to, increased inflation, high and rising interest rates, supply chain disruptions, labor conditions, significant natural disasters (including as a result of climate change), the negative impacts from pandemics and public health crises (such as the COVID-19 pandemic) and the negative impacts resulting from political and military conflict, trade and other international disputes, including the ongoing conflicts in Eastern Europe and the Middle East.
These conditions have had a significant adverse impact on economic and market conditions around the world, including the United States.
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If our costs, in particular costs related to clinical trial expenses and/or employee-related expenses, were to become subject to significant inflationary pressures, it may adversely impact our business, operating results and financial condition.
−Removed: In response to inflationary pressures, the Federal Reserve raised interest rates in 2022 and 2023, and these increases may continue in 2024 and beyond.
+Added: In response to inflationary pressures, the Federal Reserve raised the benchmark federal funds rate in 2022 and 2023, which led to the increases in interest rates in the credit markets.
+Added: Although the Federal Reserve lowered the benchmark federal funds rate in September 2024 and November 2024, it may raise the federal funds rate in the future, which would likely lead to higher interest rates in the credit markets and the possibility of slowing economic growth.
Increases in interest rates, especially if coupled with reduced government spending and volatility in financial markets, may further increase economic uncertainty and heighten these risks.
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An adverse development regarding our products could have a material and adverse impact on our future revenues and profitability.
−Removed: Our product portfolio currently includes seven brands:
−Removed: Acetadote, Caldolor, Kristalose, Vaprisol, Omeclamox-Pak, Vibativ and Sancuso.
+Added: Our product portfolio currently includes six brands:
+Added: Acetadote, Caldolor, Kristalose, Sancuso, Vaprisol and Vibativ.
A product contamination or other safety or regulatory issues, such as a failure to meet certain FDA reporting requirements involving our products, could negatively impact us and possibly lead to a product recall.
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If for any reason we are unable to obtain or retain third-party manufacturers on commercially acceptable terms, we may not be able to sell our products as planned.
−Removed: Furthermore, if we encounter delays or difficulties with contract manufacturers in producing our products, the distribution, marketing and subsequent sales of these products could be adversely affected.
+Added: Furthermore, if we encounter delays or difficulties with contract manufacturers in producing our products, including as a result to disruptions to supplier operations resulting from factors such as supply chain delays, public health emergencies, climate events or political unrest, or otherwise, the distribution, marketing and subsequent sales of these products could be adversely affected.
A long-term inability to meet demand for our products could result in impairment of our brands overall future and the carrying value of the assets associated with our brands.
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It would be particularly difficult to find a new manufacturer of the Kristalose active pharmaceutical ingredient on an expedited basis.
−Removed: We have manufacturing relationship with one packager who provided finished supplies of Kristalose for commercial and sampling purposes during 2022.
+Added: We have a manufacturing relationship with one packager who has provided finished supplies of Kristalose for commercial and sampling purposes since 2022.
If the manufacturing or packaging facilities are unable to produce useable or marketable inventory in sufficient quantities, in the agreed upon time period, we could suffer an inability to meet demand for Kristalose.
−Removed: Omeclamox-Pak:
−Removed: Our packager for Omeclamox-Pak encountered financial difficulties due to the impact of COVID-19, and their operations are currently suspended.
−Removed: Cumberland is awaiting resumption of those operations while also exploring other alternatives to restart the product’s packaging.
−Removed: In October 2020, we informed the FDA of a shortage of Omeclamox-Pak which continues.
−Removed: If we are unable to obtain marketable inventory in the future, we could continue to suffer an inability to meet demand for Omeclamox-Pak.
−Removed: With uncertain future cash flows, the Board of Directors approved the write-down of the intangible assets related to the product.
In 2018, the manufacturer of Vaprisol informed us that they would no longer be able to provide the product following the manufacturing of one final batch which is providing us with a multi-year supply.
−Removed: We are currently working with a new manufacturer to provide us with long term supplies of the product.
−Removed: In February 2022, we notified the FDA of a shortage of Vaprisol.
+Added: We are in the process of transitioning to a new manufacturing partner, who was issued a U.S.
+Added: Food and Drug Administration ("FDA") Form 483 in the second quarter of 2022.
+Added: Once these FDA Form 483 related issues are satisfactorily resolved, we will then resubmit our application for their facility to the FDA for approval.
+Added: Meanwhile, we have been working with them to support a special, interim supply of compounded product for critically ill patients, which they introduced to the market in late 2023.
If we are unable to produce additional marketable inventory in sufficient quantities, in the required time frame, we could suffer an inability to meet demand for Vaprisol.
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As part of the acquisition of Sancuso in January 2022, we obtained an initial supply of finished goods inventory and work in progress.
−Removed: On December 6, 2022, we received notification from Kyowa Kirin, Inc.
−Removed: that the FDA approved a supplemental new drug application associated with a new site at Kindeva Drug Delivery L.P., for the manufacturing and primary packaging of the Sancuso brand.
+Added: The product’s FDA registration was subsequently transferred from Kyowa Kirin, Inc.
+Added: to Cumberland in August 2023.
In addition, all manufacturers of our products and product candidates must comply with current good manufacturing practices, ("GMPs"), enforced by the FDA through its facilities inspection program.
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Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with applicable protocol, legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities.
−Removed: We and these third parties are required to comply with Good Clinical Practice (GCPs), which are regulations and guidelines enforced by
−Removed: the FDA and comparable foreign regulatory authorities for therapeutic candidates in clinical development.
+Added: We and these third parties are required to comply with Good Clinical Practice (GCPs), which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for therapeutic candidates in clinical development.
Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.
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We have a life insurance policy covering the life of Mr.
−Removed: We have entered into agreements with each of our employees that
−Removed: contain restrictive covenants relating to non-competition and non-solicitation of our customers and suppliers for one year after termination of employment.
+Added: We have entered into agreements with each of our employees that contain restrictive covenants relating to non-competition and non-solicitation of our customers and suppliers for one year after termination of employment.
Nevertheless, each of our officers and key employees may terminate his or her employment at any time without notice and without cause or good reason, and so as a practical matter these agreements do not guarantee the continued service of these employees.
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If we experience difficulties with the transition and integration of information systems or are unable to implement, maintain, or expand our systems properly, we could suffer from, among other things, operational disruptions, regulatory problems and increases in administrative expenses.
−Removed: As cyber threats continue to evolve, we may be required to expend significant capital and other resources to protect against the threat of security breaches or to mitigate and alleviate problems caused by breaches, including unauthorized access to proprietary information and personally identifiable information stored in our information systems, and the introduction of computer viruses or other malicious software programs to our systems.
+Added: As cyber threats continue to evolve (including through the use of artificial intelligence), we may be required to expend significant capital and other resources to protect against the threat of security breaches or to mitigate and alleviate problems caused by breaches, including unauthorized access to proprietary information and personally identifiable information stored in our information systems, and the introduction of computer viruses or other malicious software programs to our systems.
Our security measures may be inadequate to prevent security breaches and our business operations could be materially adversely affected by federal and state fines and penalties, legal claims or proceedings, cancellation of contracts and loss of customers if security breaches are not prevented.
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The occurrence of any information system failures could result in interruptions, delays, loss or corruption of data and cessations or interruptions in the availability of these systems.
−Removed: All of these events or
−Removed: circumstances, among others, could have an adverse effect on our business, results of operations, financial position and cash flows, and they could harm our business reputation.
+Added: All of these events or circumstances, among others, could have an adverse effect on our business, results of operations, financial position and cash flows, and they could harm our business reputation.
We believe we have all the necessary licenses from third parties to use technology and software that we do not own.
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We may decide not to commercialize one of our drug candidates once it obtains regulatory approval if we determine that commercialization of that product would require more capital and time than we are willing to invest.
−Removed: Even if any of our drug candidates receives regulatory approval, it could be subject to matters such as post-regulatory surveillance, additional clinical trials or testing, reformulation, changes in labeling, warnings to the public, recall, competition from similar or superior products, and lack of sufficient payor reimbursement by
−Removed: insurance companies or Medicare.
+Added: Even if any of our drug candidates receives regulatory approval, it could be subject to matters such as post-regulatory surveillance, additional clinical trials or testing, reformulation, changes in labeling, warnings to the public, recall, competition from similar or superior products, and lack of sufficient payor reimbursement by insurance companies or Medicare.
As a result, we may not commercialize or continue to commercialize a product that has obtained regulatory approval.
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Manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with GMP and other applicable regulations.
−Removed: If we or a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or
−Removed: frequency, or problems with a facility where the product is manufactured, a regulatory agency may impose restrictions on that product or the manufacturer, including withdrawal of the product from the market or suspension of manufacturing.
+Added: If we or a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, or problems with a facility where the product is manufactured, a regulatory agency may impose restrictions on that product or the manufacturer, including withdrawal of the product from the market or suspension of manufacturing.
If we, our partners or the manufacturing facilities for our products fail to comply with applicable regulatory requirements or violate healthcare laws, a regulatory agency may take the following actions, among others:
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While any such licensor is expected to be contractually obligated to diligently pursue its patent applications and allow us the opportunity to consult, review and comment on patent office communications, we cannot be sure that it will perform as required.
−Removed: If a licensor does not perform and if we do not assume the
−Removed: maintenance of the licensed patents in sufficient time to make required payments or filings with the appropriate governmental agencies, we risk losing the benefit of all or some of those patent rights.
+Added: If a licensor does not perform and if we do not assume the maintenance of the licensed patents in sufficient time to make required payments or filings with the appropriate governmental agencies, we risk losing the benefit of all or some of those patent rights.
If the use of our technology conflicts with the intellectual property rights of third parties, we may incur substantial liabilities, and we may be unable to commercialize products based on this technology in a profitable manner or at all.
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government’s response thereto.
+Added: If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud.
+Added: As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common shares .
+Added: Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud.
+Added: Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations.
+Added: In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act, or the subsequent testing by our independent registered public accounting firm when required, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retrospective changes to our consolidated financial statements or identify other areas for further attention or improvement.
+Added: Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common shares.
+Added: There is also a risk that neither we nor our independent registered public accounting firm (when applicable in the future) will be able to conclude within the prescribed timeframe that internal controls over financial reporting is effective as required by Section 404.
+Added: This could result in an adverse reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
We may not be able to maintain our listing on the NASDAQ Global Select Market (“NASDAQ”), which could have a material adverse effect on us and our stockholders.
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Our Revolving Credit Agreement contains specified quarterly financial maintenance covenants.
−Removed: As of December 31, 2023, we were in compliance with the Maximum Funded Debt Ratio financial covenant of the Revolving Credit Agreement.
+Added: As of December 31, 2024, we were in compliance with the Borrowing Base financial covenant of the Revolving Credit Agreement and associated amendments.
However, we can make no assurance that we will be able to comply with the restrictive and financial covenants contained in the Revolving Credit Agreement in the future.
−Removed: Our inability to comply with the covenants in our debt instruments could lead to a default or an event of default under the terms thereof, for which we may need to seek relief from our lender in order to waive the associated default or event of default and avoid a potential acceleration of the related indebtedness or cross-default or cross-
−Removed: acceleration to other debt.
+Added: Our inability to comply with the covenants in our debt instruments could lead to a default or an event of default under the terms thereof, for which we may need to seek relief from our lender in order to waive the associated default or event of default and avoid a potential acceleration of the related indebtedness or cross-default or cross-acceleration to other debt.
There can be no assurance that we would be able to obtain such relief on commercially reasonable terms or otherwise and we may be required to incur significant additional costs.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.