IPO in the works for local pharma outfit

A year after Biomimetic floated shares, a second Nashville-area pharma firm has filed for its initial public offering

Email | Print By E. Thomas Wood

CEO A. J. Kazimi (seated) with Martin Brown, the attorney handling Cumberland's IPO

Nashville-based Cumberland Pharmaceuticals Inc. wants to go public.

In a form S-1 or "red herring" filed with the Securities and Exchange Commission yesterday, Cumberland said it plans to raise $115 million in an IPO to be managed by UBS Investment Bank, Jefferies & Company, Wachovia Securities and Morgan Joseph.

Cumberland is a specialty pharmaceutical company that develops and markets niche products for specific conditions. Its business is primarily based, so far, on drug therapies developed overseas for which Cumberland is the U.S. licensee.

As a pharma play, rather than specifically a biotech investment, Cumberland has delivered a rare and foreign substance within its industry — profits — albeit with the peak-and-valley revenue pattern pharma investors must surely have come to expect by now.

Sales reached $12 million in 2004, less than $11 mil in 2005, and almost $18 mil in 2006. Operating income has hopped around on a similar pattern, but diluted income per share has grown almost eightfold during those years. The company posted 2006 net income of $4.4 million.

The filing reveals that Cumberland owns 86 percent of Cumberland Emerging Technologies Inc., the life sciences incubator it helped spawn in Nashville's Gulch along with Vanderbilt University and the Tennessee Technology Development Corp.

Attorney Martin Brown of the local office of Adams & Reese is leading the legal team handling the offer for Cumberland, with the firm's Virginia Boulet also involved. Brown's father, former Jack Daniel's whiskey brand chief Martin Brown Sr., was a longtime investor in Therapeutic Antibodies Inc. That firm, which had a Nashville presence, became a predecessor of Protherics PLC, the London-based biotech firm that has its North American headquarters in Nashville.

At least two principals of Cumberland, CEO A. J. Kazimi and Corporate Secretary Jeanie Marstiller, are veterans of both Therapeutic Antibodies and, earlier, Jack Daniel's maker Brown-Forman Inc., of which Martin Brown Jr. is now a director. Although he appears in a photograph of Cumberland's board on its website, Brown is not listed as a director or major shareholder in Tuesday's filing from the company.

Late last April, BioMimetic Therapeutics went public in the first IPO of a local firm in its field.