Evofem Biosciences Announces Financial Results for the First Quarter of 2024
On May 15, 2024, Evofem Biosciences (OTCQB: EVFM) reported its financial results for Q1 2024. Key highlights include:
- Received $1M from Aditxt and an additional $2.5M investment by July 1, 2024.
- Strengthened intellectual property with the approval of a new patent for Phexxi.
- Partnered with Modern Remedies to boost Phexxi distribution in the Northeast.
- Renegotiated a 7.4% lower rebate for Phexxi with Medi-Cal, effective July 2024.
Financially, net sales were $3.6M, a 38% decrease from $5.8M in Q1 2023, attributed to cyclical softness and a cyberattack on Change Healthcare. Operating expenses decreased by 31% to $6.4M, leading to a reduced operating loss of $2.8M, a 21% improvement. Despite lower sales, the company expects 2024 to be its fourth consecutive year of net sales growth.
- Received $1M from Aditxt and a commitment for an additional $2.5M by July 1, 2024.
- Strengthened Phexxi intellectual property with a new patent approval.
- Partnered with Modern Remedies to enhance Phexxi's distribution.
- Renegotiated Phexxi rebate with Medi-Cal, resulting in a 7.4% reduction.
- Operating expenses decreased by 31%, with selling and marketing costs down by 39% and G&A costs down by 22%.
- Loss from operations improved by 21%, reducing to $2.8M.
- Net sales decreased by 38% to $3.6M compared to Q1 2023.
- The cyberattack on Change Healthcare negatively impacted sales and increased costs temporarily.
- Evofem received no insurance claims for several weeks following the cyberattack, affecting Q1 results.
- Despite cost reductions, the company still reported a loss from operations.
Insights
Evofem's recent financial results highlight a mix of challenges and strategic moves. The
On the positive side, the company's operating expenses saw a substantial decrement of
Investors should be cautious but note the potential for future growth driven by partnerships, such as the one with Modern Remedies and product innovation indicated by the new patent allowance. The upcoming investment from Aditxt and the anticipated closure of the merger in the latter half of 2024 could provide necessary financial stability and potential growth avenues.
The partnership with Modern Remedies and the renegotiated rebate with Medi-Cal are strategic moves to bolster market access and affordability of Phexxi. This indicates focused efforts on expanding market penetration and improving prescription volume in key regions. The lower rebates with Medi-Cal, effective from July 2024, could enhance margins and make Phexxi more accessible to a broader population, potentially driving long-term sales growth.
Additionally, the new patent allowance by the USPTO strengthens Evofem's intellectual property portfolio, providing a competitive edge and potentially deterring entry by generic alternatives. This solidifies Phexxi's market position and could lead to sustained revenue streams from the contraceptive market.
However, the decline in Q1 sales due to cyclic inventory patterns and external disruptions like the cyberattack underscores the volatility and dependence on external systems. Investors should keep an eye on how Evofem navigates these challenges and leverages its strategic partnerships and innovations moving forward.
From a clinical perspective, Phexxi’s role in supplementing oral contraceptives, especially with the increasing use of GLP-1 agonists like Mounjaro and Zepbound, presents a valuable clinical application. These medications are known to interfere with the efficacy of oral contraceptives, thus positioning Phexxi as an essential adjunctive therapy for women at risk of unintended pregnancies during critical periods of hormonal contraceptive efficacy reduction.
This application highlights an important niche market that Evofem is tapping into, potentially driving higher adoption rates among women on these therapies. The hormone-free, user-controlled aspect of Phexxi not only aligns with the growing demand for non-hormonal contraceptive options but also addresses specific needs unmet by traditional contraceptives.
Investors should consider the long-term potential of this growing market segment and how Evofem’s positioning could lead to sustained demand and revenue growth.
- Received
$1 million $2.5 million
- Strengthened Phexxi intellectual property with the allowance of a new Composition of Matter Patent by the USPTO. Once issued, this will be the fifth
U.S. patent covering Evofem's hormone-free contraceptive.
- Launched a partnership with Modern Remedies, one of the top pharmacies dispensing Phexxi in the Northeast, effective May 2024.
- Successfully renegotiated the rebate for Phexxi with Medi-Cal, the California state Medicaid program serving more than 15.4 million beneficiaries. Effective July 1, 2024, Evofem will pay a
7.4% lower rebate to Medi-Cal on Phexxi prescriptions dispensed to its beneficiaries.
- Net sales were
$3.6 million
- Total operating expenses decreased
31% vs. the first quarter of 2023 to$6.4 million
- Narrowed loss from operations to
$2.8 million 21% improvement compared to the first quarter of 2023.
"We expect 2024 will be our fourth consecutive year of net sales growth, driven in part by continued execution of our market access strategy with payer wins and successful rebate reductions," said Saundra Pelletier, Evofem's CEO. "We also expect lift from increasing use of Phexxi for supplemental contraception among women of reproductive age who take oral birth control pills in conjunction with GLP-1 agonists like Mounjaro and Zepbound. These drugs may make oral contraceptives less effective at certain points in the dosing schedule – specifically for four weeks after initiation and for another four weeks after each dose escalation. Adding a hormone-free, woman-controlled contraceptive like Phexxi is a logical choice for these patients for additional protection against unintended pregnancy during these times."
Financial Results
For the three months ended March 31, 2024, net sales were
The typical cycle is that our customers A) place larger orders ahead of a price increase, B) sell from this inventory for several months after the price increase, and C) resume ordering the following quarter. Phexxi WAC increased on January 1, 2024, resulting in softer first quarter 2024 net sales (stage B). By contrast, following the October 2022 WAC increase and the near-absence of sales in the fourth quarter of 2022, net sales in the first quarter of 2023 were strong (stage C).
Following the cyberattack on Change Healthcare on February 19, 2024, retail pharmacies across the country experienced delays processing prescriptions and were unable to send orders through insurance plans, and there were delays in the processing of insurance claims, which lowered dispensed units of many prescription products, including Phexxi. Additionally, Change Healthcare was the sole adjudicator (processor) used by Evofem's co-pay card vendor and Evofem received no claims for several weeks following the cyberattack. In mid-March, our co-pay card vendor established an alternative adjudicator. Initially the cost to Evofem was significantly higher, which negatively impacted our first quarter results. Costs have dropped back down in the second quarter of 2024 to approximately
Total operating expenses decreased
As a result, loss from operations improved to
Liquidity
At March 31, 2024, we had
Subsequent to the quarter close, in April 2024 Evofem made the required quarterly payment of
In May 2024, Evofem received
About Evofem Biosciences
Evofem Biosciences, Inc., is developing and commercializing innovative products to address unmet needs in women's sexual and reproductive health. The Company's first FDA-approved product, Phexxi® (lactic acid, citric acid and potassium bitartrate), is a hormone-free, on-demand prescription contraceptive vaginal gel. It comes in a box of 12 pre-filled applicators and is applied 0-60 minutes before each act of sex. Learn more at phexxi.com and evofem.com.
Phexxi® is a registered trademark of Evofem Biosciences, Inc.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the safe harbor for forward-looking statements provided by Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 including, without limitation, statements related to the Company's anticipated financial performance, the anticipated benefits of the contemplated Aditxt transaction, and timing thereof. You are cautioned not to place undue reliance on these forward-looking statements, which are current only as of the date of this press release. Each of these forward-looking statements involves risks and uncertainties. Important factors that could cause actual results to differ materially from those discussed or implied in the forward-looking statements are disclosed in the Company's SEC filings, including its Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 27, 2024, its Quarterly Report on Form 10-Q for quarter ended March 31, 2024, filed with the SEC on May 15, 2024, and any subsequent filings. All forward-looking statements are expressly qualified in their entirety by such factors. The Company does not undertake any duty to update any forward-looking statement except as required by law.
Contact
Amy Raskopf
Evofem Biosciences, Inc.
araskopf@evofem.com
(917) 673-5775
-- Financial Tables Follow --
EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET DATA (Unaudited) (In thousands) | |||
As of | |||
March 31, 2024 | December 31, 2023 | ||
Cash and cash equivalents | $ - | $ - | |
Restricted cash | 689 | 580 | |
Trade accounts receivable, net | 4,306 | 5,738 | |
Total current liabilities | 74,239 | 72,463 | |
Total stockholders' deficit | (70,666) | (66,510) | |
Total liabilities, convertible and redeemable preferred | 8,217 | 10,554 | |
EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share data) | ||||||||
Three Months Ended March 31, | ||||||||
2024 | 2023 | |||||||
Product sales, net | $ | 3,603 | $ | 5,809 | ||||
Operating Expenses: | ||||||||
Cost of goods sold | 684 | 1,376 | ||||||
Research and development | 594 | 540 | ||||||
Selling and marketing | 2,345 | 3,854 | ||||||
General and administrative | 2,824 | 3,618 | ||||||
Total operating expenses | 6,447 | 9,388 | ||||||
Loss from operations | (2,844) | (3,579) | ||||||
Other income (expense): | ||||||||
Interest income | 4 | 18 | ||||||
Other expense, net | (616) | (318) | ||||||
Loss on issuance of financial instruments | (3,275) | (84) | ||||||
Gain on debt extinguishment | 1,120 | - | ||||||
Change in fair value of financial instruments | 802 | 1,612 | ||||||
Total other income (expense), net | (1,965) | 1,228 | ||||||
Loss before income tax | (4,809) | (2,351) | ||||||
Income tax expense | - | (3) | ||||||
Net loss | (4,809) | (2,354) | ||||||
Convertible preferred stock deemed dividends | (47) | - | ||||||
Net loss attributable to common stockholders | $ | (4,856) | $ | (2,354) | ||||
Net loss per share attributable to common stockholders | ||||||||
(basic and diluted): | $ | (0.16) | $ | (1.85) | ||||
Weighted-average shares used to compute net loss per share | ||||||||
attributable to common shareholders (basic and diluted): | 31,194,393 | 1,271,524 | ||||||
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SOURCE Evofem Biosciences, Inc.
FAQ
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