Cumberland Pharma Closes Down in Public Debut

NEW YORK (Reuters) – Cumberland Pharmaceuticals Inc (CPIX.O) shares opened flat in their trading debut on Tuesday following the drugmaker’s initial public offering, and edged lower by midday.

The stock began trading at $17 — the level at which it priced on Monday evening — and jumped as high as $17.75 before falling 7 cents, or 0.4 percent, to $16.93 on Nasdaq early Tuesday afternoon.

In June, Nashville-based Cumberland received FDA approval for its Caldolor pain and fever treatment. It also markets and sells Acetadote, an injection that treats poisoning from acetaminophen, the active ingredient in many pain relievers, and Kristalose, a laxative.

The performance of Cumberland’s stock puts it in line with those of rival companies, one analyst said, pointing to drug developer Cadence Pharmaceuticals Inc (CADX.O) whose painkiller Acetavance is comparable to Caldolor and is under review by U.S. Food and Drug Administration.

“The original price did not offer upside relative to its peers,” said Eric Gunja, a research analyst with Connecticut-based Renaissance Capital, using a ratio comparing company value to sales projections. Cumberland had expected its IPO to price between $19 and $21.

But Cumberland shares could yet rise when investors get a better sense of the firm’s plans to market Caldolor later this year, Gunja said.

Cumberland’s IPO, which broke a nearly two-year drought for IPOs in the pharmaceutical sector, raised $85 million but became only the second IPO this year out of 16 in the United States to price below its estimate range.

The IPO comes at a time of renewed interest in biotech and pharma stocks. The Nasdaq Biotech Index .NBI is up 27.9 percent since lows hit in March 2009.

Cumberland posted sales of $9.4 million for the quarter ended on March 31, up 13.2 percent from a year earlier, with a profit of $1.2 million.

The IPO’s underwriters were led by UBS Investment Bank (UBSN.VX), Jefferies & Co (JEF.N) and Wells Fargo Securities (WFC.N).

(Reporting by Phil Wahba; Editing by Lisa Von Ahn and Richard Chang)