Cumberland Pharma shares tumble after FDA delay

INDIANAPOLIS

Shares of Cumberland Pharmaceuticals Inc. tumbled Monday, one trading day after it said regulators will take more time to review the drug Acetadote as a treatment for patients with non-acetaminophen acute liver failure.

THE SPARK: The Nashville, Tenn., company said Friday the Food and Drug Administration extended its review of Acetadote three months, and a potential decision now many not come until December. The injectable drug is already approved to counteract overdoses of acetaminophen, widely used in pain relievers, and can be used for pediatric patients.

Regulators were expected to decide on the additional use next month.

THE BIG PICTURE: The company already is dealing with "nonexistent" sales of Caldolor, its newly released injectable ibuprofen, Jefferies & Co. analyst David Windley said in a research note.

The analyst said Acetadote currently has no patent protection, and the FDA's delay could put a decision "dangerously close" to the Jan. 23, 2011 expiration of exclusivity from Acetadote's orphan drug status.

That status is given to drugs that treat rare diseases. It includes tax credits and incentives along with market exclusivity.

THE ANALYSIS: Windley, who has a "Hold" rating on the stock, called data supporting Cumberland's FDA application for Acetadote marginal.

"We recommend avoiding the stock pending higher visibility on both products," the analyst wrote.

SHARE ACTION: Down 52 cents, or 8.6 percent, to $5.50 in Monday morning trading. Earlier in trading shares traded at a 52-week low of $5.41.