- 1Q20 total net product revenue of $12.3
million exceeded Wall Street consensus -
- Significantly reducing operating expenses,
while maintaining goal of achieving EBITDA breakeven in 2021 -
- In discussions with TPG Sixth Street Partners
to defer the scheduled start of quarterly revenue covenants due to
COVID-19 -
- First Orange Book listed patent for ANNOVERA®
issued providing potential extended exclusivity to 2039 -
- Strengthened board of directors with diverse
industry veterans -
- Conference call scheduled for 8:30 a.m. ET
today -
TherapeuticsMD, Inc. (NASDAQ: TXMD), an innovative, leading
women’s healthcare Company, today reported financial results for
the first quarter ended March 31, 2020.
“I would like to thank our team for delivering a successful
quarter during a challenging time. We have made significant
progress across the business,” said Robert G. Finizio, Chief
Executive Officer of TherapeuticsMD. “We delivered a solid quarter
in revenue. Recently, we extended the value of our lead asset,
ANNOVERA, with the first Orange Book listed patent, and revised our
strategic priorities and significantly reduced our operating cost
structure, bringing us closer to achieving EBITDA break even in
2021.”
First Quarter & Recent Highlights
- The Company continued to evaluate its strategy and commercial
infrastructure as the impact of COVID-19 persisted. Our strategy
remains the same: to drive revenues by prioritizing ANNOVERA®
(segesterone acetate and ethinyl estradiol vaginal system) as the
lead product, IMVEXXY® (estradiol vaginal inserts) in the second
position and BIJUVA® (estradiol and progesterone) in the third
position. The Company’s approach is straightforward, reallocate
resources towards those products and initiatives that drive the
fastest revenue growth, while reducing overall operating expenses.
Total operating expenses excluding non-cash items for the first
quarter of 2020 were approximately $57.5 million. The Company has
initiated measures to reduce its operating expenses for the second
quarter by approximately $10 million to $12 million and plans to
further reduce total operating expenses to approximately $40
million or below for the third and fourth quarters of 2020. The
Company’s goal still remains to achieve EBITDA break even in
2021.
- Due to the uncertainty created by COIVD-19 and its impact, the
Company has been in discussions with TPG Sixth Street Partners
(“Sixth Street”) regarding the revenue covenants in the loan
document. The Company is working with Sixth Street to defer the
scheduled start of the quarterly revenue covenant for two to three
quarters to reflect the impact of COVID-19. Sixth Street has
expressed preliminary support and while there is currently no final
agreement or obligation, they understand the importance of
flexibility for our Company at this time.
- Net product revenue for the first quarter of 2020 was $12.3
million. The Company anticipated that net revenue would be lower in
the first quarter of 2020 compared to fourth quarter of 2019 due to
the impact of high deductible insurance plans resetting.
- The COVID-19 pandemic had an impact on all of the Company’s
product revenue with the sales force being out of the field for
about four weeks of the quarter. In particular, the full commercial
launch of ANNOVERA was paused on March 1, 2020 as the Company
deferred sales and marketing initiatives due to lack of access to
healthcare providers and a shift of patients’ focus during the
pandemic.
- ANNOVERA net revenue of $2.3 million for the first quarter of
2020. Total prescriptions sold to patients doubled for the first
quarter of 2020 over the fourth quarter of 2019. Patient demand was
greater than the wholesale orders for the first quarter of 2020,
reducing inventory with our distributors. Net revenue per unit,
calculated from sales to wholesalers and pharmacies, for the first
quarter 2020 was approximately $1,350.
- For the long-term success of ANNOVERA, the Company is focusing
on establishing the broad availability of ANNOVERA with retail
pharmacies, mail order pharmacies, and online distributors, as well
as public health and the military, which allows access where
contraception is prescribed.
- Medicaid access is advancing with 37 states now covering
ANNOVERA with average copays of $5 or less. ANNOVERA will be
available for Title X entities in early 2020 and expects
universities to adopt and prescribe ANNOVERA during the fall 2020
semester. ANNOVERA was added to formulary for the Department of
Defense and is currently selling at 92 bases.
- The United States Patent and Trademark Office (USPTO) recently
issued a patent that covers the labeled indication for ANNOVERA
that has been listed in the U.S. Food and Drug Administration’s
(FDA) Approved Drug Products with Therapeutic Equivalence
Evaluations (commonly known as the Orange Book). In addition to
this patent, which provides patent exclusivity through 2039,
ANNOVERA contains segesterone acetate, which qualifies ANNOVERA for
FDA regulatory exclusivity through August 2023 under the
Hatch-Waxman Act as a “new chemical entity.” Additional utility
patent applications for ANNOVERA have been filed, including a
design patent that, if issued, would strengthen the product’s
exclusivity position.
- IMVEXXY® first quarter 2020 net revenue was $6.4 million. In
the first quarter of 2020, approximately 134,000 IMVEXXY
prescriptions were dispensed to patients. Average calculated net
revenue per unit on these dispensed products was approximately $48
for the first quarter of 2020. IMVEXXY is the fastest growing
product in the vulvar and vaginal atrophy (VVA) market with 10.8%
market share of total prescriptions in March 2020. Strong IMVEXXY
refill rates continued with patients adhering to therapy. Patients
on IMEXXY for one year average six fills.
- IMVEXXY has market access for the majority of lives under
commercial plans with 72% unrestricted commercial coverage,
including all of the top ten commercial payors of VVA products.
Three of the top eight Medicare Part D payors of VVA products cover
IMVEXXY. While COVID-19 has slowed down the payor review process,
the Company will continue to seek profitable preferred level access
in Medicare Part D to keep patient copay experience consistent
across commercial and Part D. IMVEXXY Medicaid access is advancing
with 21 states now unrestricted in Medicaid with average copays of
$5 or less.
- BIJUVA® capsules first quarter 2020 net revenue was $1.1
million. In the first quarter of 2020, approximately 26,000
prescriptions were dispensed to patients. Average calculated net
revenue per unit on these dispensed products was approximately $43
for the first quarter of 2020.
- BIJUVA has market access for the majority of lives under
commercial plans with 54% commercial coverage, including seven of
the top ten commercial payors of vasomotor symptoms (VMS) products.
BIJUVA Medicaid access is advancing with 21 states now unrestricted
in Medicaid with average copays of $5 or less.
- On behalf of the Board of Directors of TherapeuticsMD, Inc.,
Chairman Tommy G. Thompson recently strengthened the Board with the
appointments of Paul Bisaro, Gail Naughton, Ph.D. and Karen Ling.
These independent directors bring diversity, significant experience
and a unique skillset to contribute to the Company’s next stage of
growth. As part of the Board of Directors' continued review of its
composition and effectiveness, the Board has reduced its size from
eleven directors to nine directors.
First Quarter 2020 Revenue Performance
For the quarter ended March 31, 2020, net product revenue was
$12.3 million compared to $15.9 million for the prior quarter.
Three Months Ended
March 31, 2020
Three Months Ended
March 31, 2019
Three Months Ended
December 31, 2019
Prenatal vitamins
$
2,473,691
$
1,935,971
$
2,576,319
IMVEXXY
6,392,601
2,010,680
6,347,301
BIJUVA
1,111,604
—
1,211,456
ANNOVERA
2,272,761
—
5,766,604
Net revenue
$
12,250,657
$
3,946,651
$
15,901,680
Net Product Revenue
Net product revenue for the quarter was significantly affected
by the COVID-19 pandemic for all product sales. Though ANNOVERA was
commercially launched in early March of 2020, the Company
subsequently paused the launch due to the COVID-19 pandemic. Net
product revenue of $12.3 million for the quarter ended March 31,
2020 included a slight increase in IMVEXXY revenue offset by a
decrease in net revenues for ANNOVERA, BIJUVA, and prenatal
vitamins. This net product revenue was comprised of sales of
IMVEXXY of $6.4 million, BIJUVA of $1.1 million, ANNOVERA of $2.3
million, and prenatal vitamins of $2.5 million. The decrease in
ANNOVERA net revenue was due to the decline in unit sales, which
was largely due to the paused launch in March 2020 as a result of
the COVID-19 pandemic. The decrease in BIJUVA net revenue was due
primarily to the decrease in revenue per unit while the decrease in
net revenue related to the Company’s prenatal vitamins was due to a
decline in units sold when compared to the quarter ended December
31, 2019.
Net revenue for IMVEXXY and BIJUVA has been greatly affected by
the Company’s co-pay assistance programs introduced to provide
products at a reasonable cost regardless of insurance coverage. The
Company expects net product revenue to improve as commercial and
Medicare payor coverage increases, and the plans complete the
process needed to adjudicate IMVEXXY, BIJUVA, and ANNOVERA
prescriptions at pharmacies.
Expense, EPS and Related Information
Research and Development (R&D) expenses for the first
quarter of 2020 were $3.3 million compared with $4.4 million for
the prior quarter. R&D expenditures have been reduced as the
Company refocused resources towards launching its approved drugs.
Though the Company continued to deploy adequate resources to
develop its drug pipeline, continue stability testing and
validation on its drugs, develop and validate secondary
manufacturers, prepare regulatory submissions, and work with
regulatory authorities on existing submissions, the Company is
committed to refocusing resources to complete the launch of
ANNOVERA and continue the commercialization of its other FDA
approved products.
SG&A expenses increased to $57.0 million for the first
quarter of 2020 compared with $52.7 million for the prior quarter.
The increase in SG&A expenses for first quarter 2020 was
primarily a result of higher expenses associated with sales and
marketing efforts to support the significant initiatives related to
the launch of ANNOVERA in March 2020, which was subsequently paused
as a result of the COVID-19 pandemic. Additionally these higher
expenses related to the continued commercialization of BIJUVA and
IMVEXXY, which was also pre-empted by the COVID-19 pandemic. In the
case of all products the increased costs related to advertising
expenses and spend on consumer media while certain one-time launch
expenses related to the paused launch of ANNOVERA were also
incurred. Near the end of the quarter, the Company pulled back on a
large portion of the marketing spend due to COVID-19, which will
result in reduced costs in the second quarter that will continue to
play out in subsequent quarters.
Human resources costs, including salaries, benefits and taxes,
for the three months ended March 31, 2020 decreased compared to the
quarter ended December 31, 2019. Other operating expenses for the
three months ended March 31, 2020 remained flat, when compared to
the three months ended December 31, 2019, due to the Company’s
effort to focus spend on commercialization of its products. The
Company expects total operating costs to be significantly reduced
for the remainder of the year.
Net loss for the first quarter of 2020 increased to $56.8
million, or $0.21 per basic and diluted share, compared with $49.4
million, or $0.19 per basic and diluted share, for the fourth
quarter of 2019.
Balance Sheet
As of March 31, 2020, the Company’s cash on hand totaled $170.1
million, compared with approximately $160.8 million at December 31,
2019.
Total outstanding debt, net of issuance costs, was approximately
$243.4 million as of March 31, 2020 compared to $194.6 million as
of December 31, 2019. The change is due to the drawdown of the $50
million tranche for meeting the fourth quarter 2019 revenue draw
trigger.
Conference Call and Webcast Details
TherapeuticsMD will host a conference call and live audio
webcast today at 8:30 a.m. ET to discuss these financial results
and provide a business update.
Date:
Wednesday, May 6, 2020
Time:
8:30 a.m. ET
Telephone Access (US):
866-665-9531
Telephone Access
(International):
724-987-6977
Access Code for All Callers:
5832796
A live webcast and audio archive for the event may be accessed
on the home page or from the “Investors & Media” section of the
TherapeuticsMD website at www.therapeuticsmd.com. Please connect to
the website prior to the start of the presentation to ensure
adequate time for any software downloads that may be necessary to
listen to the webcast. A replay of the webcast will be archived on
the website for at least 30 days. In addition, a digital recording
of the conference call will be available for replay beginning two
hours after the call's completion and for at least 30 days with the
dial-in 855-859-2056 or international 404-537-3406 and Conference
ID: 5832796.
Please see the Full Prescribing Information, including
indication and Boxed WARNING, for each TherapeuticsMD product as
follows:
- IMVEXXY (estradiol vaginal inserts) at
https://imvexxy.com/pi.pdf
- BIJUVA (estradiol and progesterone) capsules at
https://www.bijuva.com/pi.pdf
- ANNOVERA (segesterone acetate and ethinyl estradiol vaginal
system) at www.annovera.com/pi.pdf
Forward-Looking Statements
This press release by TherapeuticsMD, Inc. may contain
forward-looking statements. Forward-looking statements may include,
but are not limited to, statements relating to TherapeuticsMD’s
objectives, plans and strategies as well as statements, other than
historical facts, that address activities, events or developments
that the Company intends, expects, projects, believes or
anticipates will or may occur in the future. These statements are
often characterized by terminology such as "believes," "hopes,"
"may," "anticipates," "should," "intends," "plans," "will,"
"expects," "estimates," "projects," "positioned," "strategy" and
similar expressions and are based on assumptions and assessments
made in light of management’s experience and perception of
historical trends, current conditions, expected future developments
and other factors believed to be appropriate. Forward-looking
statements in this press release are made as of the date of this
press release, and the Company undertakes no duty to update or
revise any such statements, whether as a result of new information,
future events or otherwise. Forward-looking statements are not
guarantees of future performance and are subject to risks and
uncertainties, many of which are outside of the Company’s control.
Important factors that could cause actual results, developments and
business decisions to differ materially from forward-looking
statements are described in the sections titled "Risk Factors" in
the Company’s filings with the Securities and Exchange Commission,
including its most recent Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q, as well as reports on Form 8-K, and include
the following: the Company’s ability to protect the intellectual
property related to its products; the effects of the COVID-19
pandemic; the Company’s ability to maintain or increase sales of
its products; the Company’s ability to develop and commercialize
IMVEXXY®, ANNOVERA®, BIJUVA® and its hormone therapy drug
candidates and obtain additional financing necessary therefor;
whether the Company will be able to comply with the covenants and
conditions under its term loan facility, including the conditions
to draw an additional tranche thereunder and whether the lender
will make such tranche available; the potential of adverse side
effects or other safety risks that could adversely affect the
commercialization of the Company’s current or future approved
products or preclude the approval of the Company’s future drug
candidates; whether the FDA will approve the efficacy supplement
for the lower dose of BIJUVA; the Company’s ability to protect its
intellectual property, including with respect to the Paragraph IV
notice letters the Company received regarding IMVEXXY and BIJUVA;
the length, cost and uncertain results of future clinical trials;
the Company’s reliance on third parties to conduct its
manufacturing, research and development and clinical trials; the
ability of the Company’s licensees to commercialize and distribute
the Company’s products; the ability of the Company’s marketing
contractors to market ANNOVERA; the availability of reimbursement
from government authorities and health insurance companies for the
Company’s products; the impact of product liability lawsuits; the
influence of extensive and costly government regulation; the
volatility of the trading price of the Company’s common stock and
the concentration of power in its stock ownership. PDF copies of
the Company’s historical press releases and financial tables can be
viewed and downloaded at it website:
www.therapeuticsmd.com/pressreleases.aspx.
THERAPEUTICSMD, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
March 31, 2020 December 31,2019
(Unaudited)
ASSETS
Current Assets: Cash
$
170,097,813
$
160,829,713
Accounts receivable, net of allowance for doubtful accounts of
$781,419 and $904,040, respectively
20,664,009
24,395,958
Inventory
14,607,453
11,860,716
Other current assets
6,618,367
11,329,793
Total current assets
211,987,642
208,416,180
Fixed assets, net
2,330,190
2,507,775
Other Assets: License rights, net
38,475,797
39,221,308
Intangible assets, net
5,616,832
5,258,211
Right of use assets
9,757,167
10,109,154
Other assets
473,009
473,009
Total other assets
54,322,805
55,061,682
Total assets
$
268,640,637
$
265,985,637
LIABILITIES AND STOCKHOLDERS'
(DEFICIT) EQUITY
Current Liabilities: Accounts payable
$
28,714,327
$
19,181,212
Other current liabilities
32,924,485
33,823,613
Total current liabilities
61,638,812
53,004,825
Long-Term Liabilities: Long-term debt
243,428,671
194,634,643
Operating lease liability
8,782,274
9,145,049
Total long term liabilities
252,210,945
203,779,692
Total liabilities
313,849,757
256,784,517
Commitments and Contingencies Stockholders' (Deficit)
Equity: Preferred stock - par value $0.001; 10,000,000 shares
authorized; no shares issued and outstanding
-
-
Common stock - par value $0.001; 350,000,000 shares authorized:
271,677,742 and 271,177,076 issued and outstanding, respectively
271,678
271,177
Additional paid-in capital
706,789,283
704,351,222
Accumulated deficit
(752,270,081)
(695,421,279)
Total stockholders' (deficit) equity
(45,209,120)
9,201,120
Total liabilities and stockholders' equity
$
268,640,637
$
265,985,637
THERAPEUTICSMD, INC. AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) Three Months
Ended Three Months Ended March 31, December 31,
2020
2019
2019
Product revenue, net
$
12,250,657
$
3,946,651
$
15,901,680
Cost of goods sold
2,715,051
762,827
2,878,590
Gross profit
9,535,606
3,183,824
13,023,090
Operating expenses: Sales, general, and administrative
56,927,021
34,864,082
52,734,093
Research and development
3,268,829
6,317,882
4,432,224
Depreciation and amortization
261,994
106,938
248,830
Total operating expenses
60,457,844
41,288,902
57,415,147
Operating loss
(50,922,238
)
(38,105,078
)
(44,392,057
)
Other income (expense) Miscellaneous income
335,482
688,721
621,126
Interest expense
(6,262,046
)
(2,090,018
)
(5,664,583
)
Total other expense
(5,926,564
)
(1,401,297
)
(5,043,457
)
Loss before income taxes
(56,848,802
)
(39,506,375
)
(49,435,514
)
Provision for income taxes
-
-
-
Net loss
$
(56,848,802
)
$
(39,506,375
)
$
(49,435,514
)
Loss per share, basic and diluted: Net loss per
share, basic and diluted
$
(0.21
)
$
(0.16
)
$
(0.19
)
Weighted average number of common shares outstanding, basic
and diluted
271,459,522
241,006,032
261,752,076
THERAPEUTICSMD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31,
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES Net loss
$
(56,848,802
)
$
(39,506,375
)
Adjustments to reconcile net loss to net cash used in operating
activities Depreciation of fixed assets
198,839
66,494
Amortization of intangible assets
63,155
40,444
Non-cash operating lease expense
351,987
219,765
(Recovery of) provision for doubtful accounts
(122,621
)
82,284
Share-based compensation
2,366,453
2,586,948
Amortization of deferred financing fees
319,408
120,146
Amortization of license fee
745,511
-
Changes in operating assets and liabilities: Accounts receivable
3,854,569
(3,963,214
)
Inventory
(2,746,737
)
(1,688,045
)
Other current assets
4,436,047
987,794
Accounts payable
9,533,115
2,621,402
Accrued expenses and other current liabilities
(1,261,904
)
268,939
Net cash used in operating activities
(39,110,980
)
(38,163,418
)
CASH FLOWS FROM INVESTING ACTIVITIES Patent costs
(421,775
)
(403,496
)
Purchase of fixed assets
(21,254
)
(262,418
)
Net cash used in investing activities
(443,029
)
(665,914
)
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from
exercise of options and warrants
72,109
100,107
Proceeds from Financing Agreement
50,000,000
-
Payment of deferred financing fees
(1,250,000
)
-
Net cash provided by financing activities
48,822,109
100,107
Increase (decrease) in cash
9,268,100
(38,729,225
)
Cash, beginning of period
160,829,713
161,613,077
Cash, end of period
$
170,097,813
$
122,883,852
Supplemental disclosure of cash flow information
Interest paid
$
5,892,639
$
1,913,956
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200506005336/en/
Investor Contact Nichol
Ochsner Vice President, Investor Relations 561-961-1900, ext. 2088
Nochsner@TherapeuticsMD.com
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