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Products Added During 2014 and 2013
9 Months Ended
Sep. 30, 2015
Business Combinations [Abstract]  
PRODUCTS AND DURING 2014 AND 2013
PRODUCTS ADDED DURING 2014 AND 2013
Vaprisol
On February 28, 2014, the Company acquired certain product rights, intellectual property and related assets of Vaprisol from Astellas Pharma US, Inc. ("Astellas"). Vaprisol is a patented, prescription brand indicated to raise serum sodium levels in hospitalized patients with euvolemic and hypervolemic hyponatremia. The product was developed and registered by Astellas and then launched in 2006. It is one of two branded prescription products indicated for the treatment of hyponatremia. Cumberland's acquisition of Vaprisol is accounted for as a business combination and the products sales are included in the results of operations subsequent to the acquisition date.
The Company provided an upfront payment of $2.0 million to Astellas at closing. The business combination provided for an additional milestone payment of up to $2.0 million, dependent upon Cumberland achieving certain first year sales levels for the product. The Company paid Astellas $1.6 million to fulfill the contingent consideration during April 2015. On a year-to-date basis the Company recognized a $0.3 million gain on the contingent consideration as the result of the reduction in the cost of the Vaprisol acquisition. Vaprisol contributed $0.7 million and $0.7 million in net revenues during the three months ended September 30, 2015 and 2014, respectively. On a year-to-date basis, Vaprisol contributed net revenues of $2.2 million for 2015 and $2.0 million for 2014.
Omeclamox-Pak
On October 28, 2013, the Company entered into an agreement with Pernix Therapeutics ("Pernix") to distribute and promote Omeclamox-Pak. Omeclamox-Pak is a branded prescription product that combines omeprazole, amoxicillin and clarithromycin for the treatment of Helicobacter pylori (H. pylori) infection and duodenal ulcer disease. Under the terms of the agreement, the Company promotes the product to gastroenterologists across the United States and Pernix has been responsible for promoting the product through its specialty sales force focusing on select primary care physicians. The Company paid an upfront payment of $4.0 million to Pernix on October 29, 2013. The agreement calls for additional milestones at the first and second anniversary dates of the execution of the agreement totaling $4.0 million in the aggregate. Cumberland was not required to make either milestone payment to Pernix as all the criteria for these payments were not met, including Pernix's co-promotion obligations. Royalty payments ranging from 15% to 20% based on tiered levels of gross profits are paid by Cumberland to Pernix. The Company also makes royalty payments to Pernix to reflect their ongoing sales promotional efforts.
The $4.0 million upfront payment that the Company paid to Pernix on October 29, 2013 is included in product and license rights and is amortized over the remaining expected useful life of the acquired asset, currently the life of the agreement, which ends in June 2032. Omeclamox-Pak contributed $0.7 million and $1.0 million in net revenues during the three months ended September 30, 2015 and 2014, respectively. On a year-to-date basis, Omeclamox-Pak contributed net revenues of $2.4 million for 2015 and $3.5 million for 2014.