This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Worst IPOs of 2009: Biggest Stock Flops

Cumberland Pharmaceuticals

Investors are finding limited potential in Cumberland Pharmaceuticals (CPIX - Get Report). The company went public on Aug. 11, raising $85 million with an IPO price of $17 a share, but since then the stock has fallen 22% to close at $13.25 on Dec. 8.

The small drug maker only produces three drugs: Acetadote, an antidote for overdoses of acetaminophen; Kristalose, a powder laxative; and recently approved Caldolor, an intravenous form of ibuprofen.

Kristalose and Acetadote have just $45 million in annual revenue combined, according to Morningstar. So Cumberland is relying to Caldolor to boost profits.

So far, it's working. In the third quarter, profit rose 6% to $1.3 million, or 7 cents a share, from $1.2 million, or 7 cents in the year-ago period. Revenue spiked 58% to $13.6 million, driven by Caldolor sales, the company said in a statement.

And earlier this week Cumberland said it signed a licensing deal with DB Pharm Korea to sell Caldolor in South Korea.

But since Cumberland has minimal research capabilities, growth is predominantly dependent on acquisitions, with about $70 million of unallocated IPO proceeds, according to Morningstar.

"There couldn't be a worse time for a small drug company to launch an acquisition program," Morningstar wrote in a note. "Most big and specialty pharma companies we cover are desperate to rebuild sparse pipelines and have access to pile of cash. It's highly unlikely that Cumberland, with its limited resources, will attract a sizable or promising opportunity for a reasonable price."

-- Reported by Jeanine Poggi in New York.

RELATED STORIES:

Follow TheStreet.com on Twitter and become a fan on Facebook.
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
6 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AMZN $436.72 0.16%
CPIX $7.07 -4.50%
OMER $16.94 -3.14%
VITC $7.99 -0.06%
AAPL $125.69 -0.25%

Markets

DOW 17,776.91 +93.33 0.53%
S&P 500 2,081.34 +12.58 0.61%
NASDAQ 4,997.4590 +5.5190 0.11%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs