TherapeuticsMD 8-K

 

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

TherapeuticsMD® Announces Third Quarter 2020 Financial Results

 

- Significant growth in net revenue, net revenue per unit and prescriptions across product portfolio-

-Total net revenue increased 80% to $19.3 million compared to 2Q20-

- ANNOVERA®net revenue increased 250% for 3Q20 compared to 2Q20-

- Menopausal products achieved double digit growth in new and total prescriptions for 3Q20 compared to 2Q20-

-Reduced 3Q20 cash burn by $22 million compared to 2Q20-

-Process to divest vitaCare Prescription Services underway that could generate non-dilutive proceeds-

-Sixth Street reduces minimum cash requirement from $60 million to $45 million through year end-

- Conference call scheduled for 8:30 a.m. ET today -

 

BOCA RATON, Fla. November 9, 2020 – TherapeuticsMD, Inc. (NASDAQ: TXMD), an innovative, leading women’s healthcare company, today reported financial results for the third quarter ended September 30, 2020.

 

“We delivered a strong quarter that resulted in record growth across our product portfolio in the midst of a pandemic and beat net revenue consensus estimates for the sixth quarter in a row,” said Robert G. Finizio, Chief Executive Officer of TherapeuticsMD. “During the quarter, we significantly reduced our operating expenses and cash burn.”

 

Third Quarter 2020 Summary

 

·Total net revenue increased 80% to $19.3 million for the third quarter of 2020 as compared to $10.7 million for the second quarter of 2020.
oProduct net revenue from product sales to wholesalers and pharmacies increased 62% to $17.3 million for the third quarter of 2020 as compared to $10.7 million for the second quarter of 2020.
oLicense revenue of $2 million from Knight Therapeutics, Inc. was recognized in the third quarter of 2020 as a result the approval by Health Canada of IMVEXXY and BIJUVA® for commercial sale in Canada.
·Total operating expenses, excluding non-cash items, decreased by $11.0 million to $37.1 million for the third quarter of 2020 as compared to $48.1 million for the second quarter of 2020.

 

ANNOVERA® (segesterone acetate and ethinyl estradiol vaginal system)

 

·ANNOVERA net product revenue increased 250% to $6.4 million for the third quarter of 2020 as compared to $1.8 million for the second quarter of 2020. Net revenue per unit, calculated from sales to wholesalers and pharmacies, was $1,339 for the third quarter of 2020.

·Approximately 5,200 ANNOVERA prescriptions were dispensed during the third quarter of 2020. ANNOVERA total prescription volume increased 115% for third quarter of 2020 as compared to the second quarter of 2020.

·ANNOVERA gained preferred coverage with one of the top pharmaceutical benefit managers (PBM), representing approximately 20% of commercial lives, effective in the first quarter of 2021.

oThis PBM will include ANNOVERA as the only preferred branded contraceptive vaginal ring agent and will remove NuvaRingâ from its 2021 formulary.

·ANNOVERA was added by Medi-Cal as of November 1, 2020 and will be fully implemented across all California lives (approximately 16% of national Medicaid population) by January 1, 2020.

 

 

 

 

IMVEXXY® (estradiol vaginal inserts)

 

·IMVEXXY net product revenue increased 35% to $6.8 million for the third quarter of 2020 as compared to $5.1 million for the second quarter of 2020. Net revenue per unit, calculated from sales to wholesalers and pharmacies, was $51 for the third quarter of 2020. Strong IMVEXXY refill rates continued with patients adhering to therapy.
·Approximately 131,000 IMVEXXY prescriptions were dispensed during the third quarter of 2020. IMVEXXY new prescription volume increased 32% for third quarter of 2020 as compared to the second quarter of 2020, which should positively impact total prescriptions going forward. IMVEXXY total prescriptions increased 11% for same period.
·IMVEXXY gained preferred coverage with one of the top PBMs, representing approximately 20% of commercial lives, effective in the first quarter of 2021.
oThis PBM will include IMVEXXY as the only branded pharmaceutical product on formulary for the vulvar and vaginal atrophy (VVA) class and will remove Premarin® Cream, Intrarosa®, Osphena® and Estring® from the 2021 formulary.

 

BIJUVA® (estradiol and progesterone)

 

·BIJUVA net product revenue increased 22% to $1.6 million for the third quarter of 2020 as compared to $1.4 million the second quarter of 2020. Net revenue per unit, calculated from sales to wholesalers and pharmacies, was $47 for the third quarter of 2020.
·Approximately 32,000 BIJUVA prescriptions were dispensed in the third quarter of 2020. BIJUVA new prescription volume increased approximately 59% for the third quarter of 2020 as compared to the second quarter of 2020. Total prescriptions increased approximately 16% during the same period.
·Anthem (includes many Blue Cross Blue Shield plans) moved BIJUVA from non-preferred to preferred formulary status as of October 1 , 2020.

 

Net Revenue

 

   Three Months Ended
September 30, 2020
  Three Months Ended
September 30, 2019
  Three Months Ended
June 30, 2020
ANNOVERA  $6,418,990   $399,952   $1,835,460 
IMVEXXY   6,841,592    4,772,354    5,085,190 
BIJUVA   1,646,320    490,705    1,352,001 
Prenatal vitamins   2,435,903    2,550,330    2,428,382 
Licensing revenue   2,000,000    15,506,400    —   
Net revenue  $19,342,805   $23,719,741   $10,701,033 

 

 

 

 

 

Cost of Goods Sold/Gross Margin

 

·Cost of goods sold decreased $1.1 million to $3.3 million for the third quarter of 2020 compared to $4.4 million for the second quarter of 2020.
oThe second quarter of 2020 included a non-cash write-off of $1.9 million primarily related to BIJUVA inventory obsolescence as a result of the Company’s reprioritization of selling resources to ANNOVERA and IMVEXXY, together with the impact of the COVID-19 pandemic on sales forecasts of BIJUVA for future quarters, which was partially offset by the increase in cost of goods related to increased unit sales for the quarter.
oGross margin percentage increased to 83% for quarter ended September 30, 2020 inclusive of the license revenue of $2 million (81% when excluding license revenue), as compared to 59% for the quarter ended June 30, 2020, which was impacted by the non-cash write-off of $1.9 million.

 

Expense, EPS and Related Information

 

·Total operating expenses, excluding non-cash items, decreased by $11.0 million to $37.1 million for the third quarter of 2020 as compared to $48.1 million for the second quarter of 2020.
oThe decrease in operating expenses was primarily a result of the Company’s cost containment efforts to reduce overall spend.
oFor the remainder of 2020, the Company anticipates that spend will focus on delivering the necessary resources to support the launch of ANNOVERA, continued ramp-up of IMVEXXY, and ongoing brand management of BIJUVA.

 

·Net loss for the quarter ended September 30, 2020 decreased to $32.6 million, or $0.12 per basic and diluted share, compared with $52.0 million, or $0.19 per basic and diluted share, for the quarter ended June 30, 2020.
oNet loss per share for the second quarter of 2020 was negatively impacted by inventory and sample expense charges related primarily to BIJUVA of $0.02 per basic and diluted share.

 

Balance Sheet

 

·As of September 30, 2020, the Company’s cash on hand totaled $79.6 million, compared with $113.8 million as of June 30, 2020.

 

Potential vitaCare Divesture

TherapeuticsMD today announced the commencement of a process to divest vitaCare Prescription Services. In recent months, the COVID-19 pandemic has highlighted the value of pharmaceutical companies being able to connect directly with patients. The Company’s vitaCare Prescription Services model is designed to make a complex process of filling prescriptions simple, cost-effective, and stress free for patients. This in combination with the rise of interest and investment in other hub service and pharmacy services companies has driven outside interest in vitaCare both from pharmaceutical companies seeking to utilize vitaCare for their products and from potential partners or sponsors seeking to acquire a controlling interest in vitaCare. The Company’s goal is to unlock substantial value for its shareholders by divesting vitaCare to a partner who can capitalize the business opportunity. Based on initial indications received, the Company believes the enterprise value of vitaCare with the right partner can be upwards of $100 million, and, depending on the ultimate transaction structure, could potentially generate at least $50 million in non-dilutive proceeds to the Company, while also retaining an interest in the newly-capitalized business. The Company intends that vitaCare’s existing dedicated management team will continue to operate the business to ensure the current level of service to TherapeuticsMD and new customers. The Company has retained Greenhill & Co. as an advisor for the transaction.

 

 

 

 

Sixth Street Update

The Company entered into an agreement with its lender, Sixth Street Partners, to lower the minimum cash balance requirement under the Company’s Financing Agreement from $60 million to $45 million through year end.

 

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: Monday, November 9, 2020
Time: 8:30 a.m. ET
Telephone Access (US): 866-665-9531
Telephone Access (International): 724-987-6977
Access Code for All Callers: 7747227

 

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: 7747227.

 

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

 

About TherapeuticsMD

 

TherapeuticsMD, Inc. is an innovative, leading healthcare company, focused on developing and commercializing novel products exclusively for women. Our products are designed to address the unique changes and challenges women experience through the various stages of their lives with a therapeutic focus in family planning, reproductive health, and menopause management. The Company is committed to advancing the health of women and championing awareness of their healthcare issues. To learn more about TherapeuticsMD, please visit www.therapeuticsmd.com or follow us on Twitter: @TherapeuticsMD and on Facebook: TherapeuticsMD.

 

 

 

 

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 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®, and BIJUVA® and obtain additional financing necessary therefor; whether the company will be able to comply with the covenants and conditions under its term loan facility; whether the company will be able to successfully divest its vitaCare business and the proceeds that may be generated by such divestiture; 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 its website: www.therapeuticsmd.com/pressreleases.aspx.



# # #

 

Investor Contact

Nichol Ochsner

Vice President, Investor Relations

561-961-1900, ext. 2088

Nochsner@TherapeuticsMD.com 

 

   
 

  

 

THERAPEUTICSMD, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

   September 30, 2020  December 31, 2019
   (Unaudited)   
ASSETS
Current Assets:          
Cash  $79,633,675   $160,829,713 
Accounts receivable, net of allowance for doubtful accounts          
  of $857,176 and $904,040, respectively   24,059,095    24,395,958 
Inventory, net   9,932,304    11,860,716 
Other current assets   8,819,239    11,329,793 
     Total current assets   122,444,313    208,416,180 
          
Fixed assets, net   1,969,929    2,507,775 
           
Other Assets:         
License rights, net   36,959,305    39,221,308 
Intangible assets, net   5,537,885    5,258,211 
Right of use assets                    9,975,725    10,109,154 
Other assets   403,643    473,009 
     Total other assets   52,876,558    55,061,682 
       Total assets  $177,290,800   $265,985,637 
           
 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY          
Current Liabilities:          
Accounts payable  $16,109,638   $19,181,212 
Other current liabilities   31,220,484    33,823,613 
     Total current liabilities   47,330,122    53,004,825 
           
Long-Term Liabilities:          
Long-term debt   237,051,202    194,634,643 
Operating lease liability   8,907,995    9,145,049 
Other long-term liabilities   35,000    —   
    Total long-term liabilities   245,994,197    203,779,692 
       Total liabilities   293,324,319    256,784,517 
           
           
Commitments and Contingencies          
           
Stockholders' Equity:          
Preferred stock - par value $0.001; 10,000,000 shares authorized;          
  no shares issued and outstanding   —      —   
Common stock - par value $0.001; 600,000,000 and 350,000,000          
shares authorized: 272,812,271 and 271,177,076 issued and          
  outstanding, respectively   272,812    271,177 
Additional paid-in capital   720,551,488    704,351,222 
Accumulated deficit   (836,857,819)   (695,421,279)
     Total stockholders' (deficit) equity   (116,033,519)   9,201,120 
       Total liabilities and stockholders' (deficit) equity  $177,290,800   $265,985,637 

 

   
 

 

THERAPEUTICSMD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

 (Unaudited)

 

   Three Months Ended Three Months Ended  Nine Months Ended
   September 30, June 30,  September 30,
   2020   2019    2020  2020   2019 
                
Product revenue, net  $17,342,805   $8,213,341   $10,701,033   $40,294,495   $18,238,857 
License revenue   2,000,000    15,506,400    —      2,000,000    15,506,400 
   Total revenue, net   19,342,805    23,719,741    10,701,033    42,294,495    33,745,257 
                          
Cost of goods sold   3,278,609    1,444,308    4,400,485    10,394,145    3,455,995 
                          
Gross profit   16,064,196    22,275,433    6,300,548    31,900,350    30,289,262 
                          
Operating expenses:                         
Sales, general, and administrative   38,751,250    45,126,986    48,340,628    144,018,899    121,378,519 
Research and development   2,027,195    4,077,738    2,742,032    8,038,056    15,359,988 
Depreciation and amortization   258,787    141,959    256,557    777,338    363,956 
     Total operating expenses   41,037,232    49,346,683    51,339,217    152,834,293    137,102,463 
                          
Operating loss   (24,973,036)   (27,071,250)   (45,038,669)   (120,933,943)   (106,813,201)
                          
Other (expense) income                         
Loss on extinguishment of debt   —      —      —      —      (10,057,632)
Miscellaneous income   41,405    703,662    88,858    465,745    1,878,980 
Interest expense   (7,679,443)   (5,599,005)   (7,026,853)   (20,968,342)   (11,717,632)
     Total other expense, net   (7,638,038)   (4,895,343)   (6,937,995)   (20,502,597)   (19,896,284)
                          
Loss before income taxes   (32,611,074)   (31,966,593)   (51,976,664)   (141,436,540)   (126,709,485)
                          
Provision for income taxes   —      —      —      —      —   
                          
Net loss  $(32,611,074)  $(31,966,593)  $(51,976,664)  $(141,436,540)  $(126,709,485)
                          
Loss per share, basic and diluted:                         
                          
Net loss per share, basic and diluted  $(0.12)  $(0.13)  $(0.19)  $(0.52)  $(0.53)
                          
Weighted average number of common                         
  shares outstanding, basic and diluted   272,564,635    241,261,299    271,876,238    271,968,981    241,163,994 

 

   
 

 

THERAPEUTICSMD, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited)

 

    

Nine Months Ended

September 30,

 
    2020    2019 
           
  Net loss  $(141,436,540)  $(126,709,485)
     Adjustments to reconcile net loss to net cash used in          
        operating activities:          
          Depreciation of fixed assets   576,459    223,750 
          Amortization of intangible assets   200,879    140,206 
          Write off of patent and trademark costs   584,509    78,864 
          Write off of deferred financing fees   275,379    —   
          Non-cash operating lease expense   1,050,940    711,836 
          (Recovery of) provision for doubtful accounts   (46,864)   95,097 
          Lease impairment   81,309    —   
          Inventory obsolesence reserve   5,744,464    —   
          Loss on extinguishment of debt   —      10,057,632 
          Share-based compensation   8,502,044    7,859,357 
          Amortization of intellectual property license fee   2,262,002    15,998 
          Amortization of deferred financing fees   1,370,118    582,829 
          Changes in operating assets and liabilities:          
             Accounts receivable   383,727    (4,354,890)
             Inventory   (3,816,053)   (7,265,174)
             Other assets   2,003,079    (1,128,515)
             Accounts payable   (3,071,574)   1,389,665 
             Accrued expenses and other current liabilities   (3,812,919)   3,402,511 
           
           
Net cash used in operating activities   (129,149,041)   (114,900,319)
           
CASH FLOWS FROM INVESTING ACTIVITIES          
  Patent costs   (1,065,062)   (1,068,542)
  Purchase of fixed assets   (38,613)   (2,089,413)
  Security deposit   35,000    (20,420)
           
Net cash used in investing activities   (1,068,675)   (3,178,375)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
  Proceeds from exercise of options and warrants   271,678    108,656 
  Repayment of the Credit Agreement   —      (81,660,719)
  Proceeds from the Financing Agreement   50,000,000    200,000,000 
  Payment of deferred financing fees   (1,250,000)   (6,652,270)
           
Net cash provided by financing activities   49,021,678    111,795,667 
           
Decrease in cash   (81,196,038)   (6,283,027)
Cash, beginning of period   160,829,713    161,613,077 
Cash, end of period  $79,633,675   $155,330,050 
           
Supplemental disclosure of noncash investing and financing activities
           
Warrant granted in relation to Financing Agreement  $7,428,179   $—   
           
Amount accrued for intellectual property license  $—     $20,000,000 
           
Supplemental disclosure of cash flow information
           
Interest paid  $19,172,847   $12,446,792 

 

   

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