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By Bill Buhr | 08-07-2009 10:00 AM

Our Take on IPO Cumberland's Growth Prospects

Health-care analyst Brian Laegeler likes the fact that specialty pharma IPO Cumberland is already profitable, but a weak pipeline and a pricey offer price are concerns.

Bill Buhr: Hi, I'm Bill Buhr, IPO strategist with Morningstar. While July was a pretty slow month in the IPO space, August looks like it's picking up, as two companies will come to market in the next week. One of those, Cumberland Pharmaceuticals, is looking to raise $100 million.

Joining me today is specialty pharma analyst Brian Laegeler to talk about Cumberland. Brian, thanks for coming.

Brian Laegeler: Thanks for having me.

Buhr: Now, where does Cumberland fit into specialty pharma?

Laegeler: Well, Cumberland is a specialty marketer, like King Pharma or Forest Labs. These types of companies have limited discovery efforts, and what they do is acquire most of their products. So the power of this business model is in concentrating several products down one audience so they can maximize their sales revenue per salesperson.

For Cumberland, their specialty is hospitals. They've got 30 right now, specializing in the hospital-sales-force side. They're going to expand to 77, post-IPO.

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