Shares of Cumberland Pharmaceuticals (NASDAQ:CPIX) have nearly doubled (up 91%) this morning after the U.S. Food and Drug Administration (FDA) approved expanding the use of its intravenous form of Ibuprofen. This IV form is for patients before they undergo surgery.
The Nashville, Tennessee-based pharmaceutical company’s shares ended trading yesterday at $2.20.
However, the stock is now up $2.02 in morning trading on news of the FDA approval. This is a welcomed development for CPIX stock, which is down 26% year to date. Cumberland Pharmaceuticals produces medications designed to treat a variety of conditions, from pain management and ulcers to bacterial infections and skin diseases. The company has been publicly traded since 2009, but its stock has steadily eroded since its initial public offering when it traded above $17.
What Happened With CPIX Stock
The FDA has approved expanded labeling of Cumberland Pharmaceutical’s medication Caldolor, which is an intravenously delivered form of Ibuprofen. The FDA approval enables Caldolor to be given to patients as part of pre-operative procedures. A non-narcotic pain reliever, Caldolor is given to people before they undergo a surgery, enabling them to wake up with less pain. As a refresher, Ibuprofen is the main pain reliever in over-the-counter medications such as Advil and Motrin. A more powerful intravenous version such as Caldolor has been found to be effective in lessening pain from surgeries.
Cumberland Pharmaceuticals says that a study of orthopedic surgical pain confirmed that Caldolor significantly reduced pain when given to people who underwent surgery before their operation and every six hours following a procedure. Caldolor can be supplemented with morphine on an “as needed basis,” the company says.
“We feel confident that this important development provides additional insights into how intravenous Ibuprofen can help healthcare professionals and patients as elective surgeries resume,” said A.J. Kazimi, CEO of Cumberland Pharmaceuticals, in a news release.
Why It Matters
For Cumberland Pharmaceuticals, a small specialty biopharmaceutical company, the FDA clearance is a big vote of confidence in its pain management medication and should help to boost sales going forward.
The nearly doubling of CPIX stock on the news shows that investors see this development as significant to future progress. While the company appears to have a robust pipeline of products in development, most have yet to be commercialized. The expanded use of Caldolor at healthcare facilities across the U.S. should help Cumberland Pharmaceuticals’ bottom line on a go-forward basis.
Additionally, Cumberland Pharmaceuticals’ Caldolor provides a means of alleviating pain without the use of narcotics. It is an alternative to opioids that have led to addiction in the U.S. and around the world. The National Institutes of Health estimates that more than 70,000 Americans died from drug-involved overdoses in 2019, including prescription opioids. Cumberland Pharmaceuticals CEO alluded to the opioid epidemic in today’s news release, stating “Before the pandemic began, healthcare systems across the country were in the midst of a public health mission to control surgical pain while decreasing opioid consumption.”
What’s Next for Cumberland Pharmaceuticals
Shareholders of CPIX stock will be hugely rewarded today. There aren’t many days when a stock doubles at the opening bell. Although, even with today’s big move higher, Cumberland Pharmaceuticals’ shares remain in penny stock territory at below $5 and there could continue to be peaks and valleys. While the FDA clearing Caldolor for expanded use is a positive development, Cumberland Pharmaceuticals still has many products that it needs to bring to market and commercialize to become a sizable player in the biotech space.
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On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.