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<SEC-DOCUMENT>0000950144-07-006506.txt : 20090924
<SEC-HEADER>0000950144-07-006506.hdr.sgml : 20090924
<ACCEPTANCE-DATETIME>20070711170149
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950144-07-006506
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20070711

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CUMBERLAND PHARMACEUTICALS INC
		CENTRAL INDEX KEY:			0001087294
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		2525 WEST END AVENUE
		STREET 2:		SUITE 950
		CITY:			NASHVILLE,
		STATE:			TN
		ZIP:			37203
		BUSINESS PHONE:		615-255-0068

	MAIL ADDRESS:	
		STREET 1:		2525 WEST END AVENUE
		STREET 2:		SUITE 950
		CITY:			NASHVILLE
		STATE:			TN
		ZIP:			37203
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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<TITLE>CORRESP</TITLE>
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Certain
portions of this correspondence have been omitted pursuant to a
request<BR> for confidential treatment which has been filed separately
with the SEC.</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt">June&nbsp;29, 2007
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington, D.C. 20549

</DIV>
<DIV align="center">
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attention:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mr. Jeffrey P. Riedler</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Assistant Director</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Re:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Cumberland Pharmaceuticals Inc.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form&nbsp;S-1 Registration Statement</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">File No.&nbsp;333-142535</TD>
</TR>
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</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We represent Cumberland Pharmaceuticals Inc. (the &#147;Company&#148;) in connection with its filing of
a Registration Statement on Form S-1 (File No.&nbsp;333-142535). On June&nbsp;22, 2007, we responded to a
comment letter of the Commission Staff dated June&nbsp;8, 2007. In our response to Comment No.&nbsp;48, we
committed to provide the Staff by a supplemental letter with a reconciliation of the difference
between the strike price of stock options recently granted by the Company and what we anticipate to
be the range of value of the Company&#146;s stock sold to investors in the public offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In January and February&nbsp;2007, the Company issued options to purchase 45,460 common shares
(less than 1% of the weighted average shares outstanding as of March&nbsp;31, 2007). These options were
given a strike price of $22.00 per share, which the Company&#146;s board of directors determined to be
the fair market value of a share of the Company&#146;s common stock as of January&nbsp;16, 2007. The board
made this determination based, in part, upon a December&nbsp;2006 analysis by the firm of Morgan Joseph.
In its analysis, Morgan Joseph applied a valuation methodology based on projected free cash flows
and trading multiples of comparable public companies, taking into account that there was no public
trading market for the Company&#146;s common stock. The $22.00 per share price equates to approximately
$220&nbsp;million total equity value.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In preliminary discussions with the underwriters in the public offering, the underwriters have
indicated that the pre-money valuation of the Company will be in the
range of $&#091;***&#093; to $&#091;***&#093;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The difference in value between the January&nbsp;2007 and the preliminary valuation range estimated
by the underwriters today is attributable to several factors but is primarily due to an
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><FONT style="font-variant: SMALL-CAPS"><B>Adams And Reese llp</B></FONT>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">United States Securities and Exchange Commission<BR>
June&nbsp;29, 2007<BR>
Page 2

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">increase in the Company&#146;s projected net revenue, operating income and cash flows over the next five
years. The following factors contributed to the changes in the revised financial forecast:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Sales of Acetadote have been strong and changes in the market for Acetadote have
caused the Company to raise its forecasts. Clinical studies of Acetadote to
explore other potential indications for the product are underway.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Marketing of Kristalose has progressed considerably, and Miralax and Zelnorm,
two competitors of Kristalose, have left the U.S. prescription laxative market.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has enrolled patients in new clinical trials for Amelior that have
commenced since January and are progressing towards completion.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="1%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company has continued development of new products and new markets for
existing products.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Another factor in the valuation difference between January&nbsp;2007 and June&nbsp;2007 is that there
was a slightly greater assumed illiquidity discount in the January&nbsp;2007 valuation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The higher price range for the IPO also reflects improvement in stock market conditions, as
reflected in the increases in the market indices during the past six months. The Dow Jones
Industrial Average, NASDAQ Composite Index, and Standard and Poor&#146;s 500 Composite Stock Price Index
have risen eight percent, eight percent, and six percent, respectively, year-to-date in 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We would welcome the opportunity to discuss any questions you may have with the Commission
staff. I can be reached, at your convenience, at (615)&nbsp;259-1450. In my absence, please ask to
speak with Virginia Boulet.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Sincerely yours,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">ADAMS AND REESE LLP

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/
Martin S. Brown, Jr.

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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    <TD width="90%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">cc:
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Greg Belliston, Esq., United States Securities and Exchange Commission</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">A.J. Kazimi, Cumberland Pharmaceuticals Inc.</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Donald J. Murray, Esq., Dewey Ballantine LLP, Counsel to the underwriters</TD>
</TR>
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</TABLE>
</DIV>



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</DIV>


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