Femasys Announces Financial Results for Quarter Ended March 31, 2024 and Provides Corporate Update

Rhea-AI Summary

Femasys Inc. (NASDAQ: FEMY) announces financial results for Q1 2024, highlighting positive topline data for FemaSeed infertility treatment, commercial procedures, appointment of Richard Spector as Chief Commercial Officer, and initiation of pivotal trial for FemBloc. The company is well-positioned to commercialize its infertility portfolio, with cash to fund operations into H2 2025. Financially, R&D expenses increased, sales decreased, and net loss grew, but the company believes its cash and equivalents will suffice. Current assets, liabilities, and stockholders' equity are detailed in the PR.

Positive

• Femasys announced positive topline data for FemaSeed infertility treatment.

• The company initiated the enrollment in the pivotal trial for FemBloc.

• Femasys is well-positioned to commercialize its infertility portfolio.

• The appointment of Richard Spector as Chief Commercial Officer is a positive corporate development.

• The company has cash to fund operations into the second half of 2025.

Negative

• Research and development expenses increased in Q1 2024.

• Sales decreased in Q1 2024.

• The net loss for the quarter ended March 31, 2024, was higher compared to the same period in 2023.

• The company had an accumulated deficit of $111,981,139 as of March 31, 2024.

Insights

Financial Analyst

The financial results released by Femasys Inc. present a mixed picture. On one hand, the research and development expenses have increased, indicating an ongoing investment in product development, specifically noting the trials for FemBloc. This could be seen as a positive indicator of future growth prospects through the potential approval and commercialization of new products. On the other hand, sales have decreased slightly compared to the same quarter the previous year, which may raise concerns about the current market penetration and revenue generation capabilities of existing products. The net loss has widened, with an increase in loss per share. However, the company has a substantial cash reserve that appears to be sufficient to fund operations into the second half of 2025, which may reassure investors about the company's short-term financial health. The balance sheet indicates a slight decrease in total assets from the previous quarter, which is a point of concern as it might reflect a decrease in the company's overall economic value. From an investment perspective, the progress in clinical trials is critical to watch, as successful outcomes could positively affect the company's valuation. The increased R&D spend could potentially lead to increased sales in the future, but this is not a guarantee. Monitoring the transition from clinical development to successful commercialization will be crucial.

Biotech Industry Analyst

From an industry perspective, Femasys Inc.'s focus on women’s health is strategically significant, as it targets an underrepresented segment in healthcare with large unmet needs. The progression of FemBloc's pivotal trial is noteworthy because it represents an innovative step in non-surgical permanent birth control, a significant advancement compared to current options. If FemBloc is successful, it could disrupt the market and lead to considerable growth for Femasys. However, while the recent positive top-line data from the FemaSeed pivotal trial is promising, it's essential to remain cautious until the full data set is disclosed and peer-reviewed. Positive clinical trial results are good signs, but they do not guarantee FDA approval or market success, which are pivotal for any biotech firm. The actual commercialization and adoption rates will be the true test of Femasys' potential impact on the market. The appointment of a Chief Commercial Officer suggests a strategic move towards strengthening the commercial strategy, which is critical at this juncture of transitioning from clinical to commercial stages.

Market Research Analyst

In observing the broader market dynamics, it's interesting to note that while the sales have dipped slightly, this decline is not drastic, suggesting that Femasys may be maintaining a relatively steady customer base amidst the broader commercialization of its infertility portfolio. The mention of sufficient cash reserves to fund operations is also a promising sign that the company is managing its resources to sustain its activities during the important commercial ramp-up phase. Furthermore, the decrease in cost of sales may indicate improved efficiency in the production or delivery of Femasys' solutions. However, the stock performance will largely depend on the investor sentiment towards the company's strategic direction and execution, particularly in the face of a net loss increase. It will be important for investors to observe how well Femasys leverages its current assets, including its portfolio and cash reserves, to navigate the road to potential profitability.

-- Recruitment of the commercial team for our infertility portfolio and the pivotal trial of FemBloc^® for permanent non-surgical birth control continues --

ATLANTA, May 09, 2024 (GLOBE NEWSWIRE) -- Femasys Inc. (NASDAQ: FEMY), a leading biomedical company focused on addressing significant unmet needs of women worldwide with a broad portfolio of in-office, accessible and innovative therapeutic and diagnostic products, announces financial results for the quarter ended March 31, 2024 and provides a corporate update.

Corporate Highlights from 1Q 2024 to date

• Company announced positive topline data from pivotal trial for FDA-cleared FemaSeed^® for the treatment of infertility.
• Company announced the first in-office commercial procedure with FDA-cleared FemaSeed infertility solution at a former investigative site.
• Appointed Richard Spector as Chief Commercial Officer.
• Initiated enrollment in pivotal trial (NCT05977751) of our permanent birth control candidate FemBloc at two academic sites, for a total of six active sites, the maximum permitted in the first stage.

“Femasys is well positioned to commercialize our infertility portfolio, led by FemaSeed in 2024 with promising top line data from the FemaSeed pivotal trial that was more than double the historic intrauterine insemination (IUI) pregnancy rates for male factor infertility (i.e., low sperm count). We are focused on completing recruitment of the commercial team and ramping up commercial operations, while continuing to support enrollment in our pivotal trial for FemBloc, our proprietary solution for permanent non-surgical birth control,” said Femasys’ CEO Kathy Lee-Sepsick. “We believe we have sufficient cash to fund operations into the second half of 2025, allowing us to continue our track record of achieving our stated milestones and moving our mission forward to deliver innovative purposely engineered solutions for women’s health that are safe, effective, accessible, and affordable.”

Financial Results for Quarter Ended March 31, 2024

• Research and development expenses increased by $233,292 to $1,770,731 in Q1 of 2024 from $1,537,439 in Q1 of 2023
• Sales decreased by $22,844 to $271,140 in Q1 of 2024 from $293,984 in Q1 of 2023
• Net loss was $3,599,510 or $0.17 per basic and diluted share attributable to common stockholders, for the quarter ended March 31, 2024, compared to net loss of $2,946,257, or $0.25 per basic and diluted share attributable to common stockholders, for the quarter ended March 31, 2023
• Cash and cash equivalents as of March 31, 2024 was $17,835,968 and the Company had an accumulated deficit of $111,981,139. The Company expects, based on its current operating plan, that its existing cash and cash equivalents will be sufficient to fund its ongoing operations into the second half of 2025

For more information, please refer to the Company’s Form 10-Q filed May 9, 2024, which can be accessed on the SEC website.

FEMASYS INC.
Condensed Balance Sheets
(unaudited)
Assets								March 31, 2024			December 31, 2023
Current assets:
	Cash and cash equivalents						$	17,835,968			21,716,077
	Accounts receivable, net							120,529			98,906
	Inventory, net							971,297			667,118
	Prepaid and other current assets							955,539			695,879
					Total current assets			19,883,333			23,177,980
Property and equipment, at cost:
	Leasehold improvements							1,212,417			1,212,417
	Office equipment							47,308			47,308
	Furniture and fixtures							417,654			414,303
	Machinery and equipment							2,582,220			2,559,356
	Construction in progress							569,723			423,077
								4,829,322			4,656,461
Less accumulated depreciation								(3,615,405	)		(3,545,422	)
					Net property and equipment			1,213,917			1,111,039
Long-term assets:
	Lease right-of-use assets, net							2,227,561			2,380,225
	Intangible assets, net of accumulated amortization							33,115			—
	Other long-term assets							1,013,034			1,086,581
					Total long-term assets			3,273,710			3,466,806
					Total assets		$	24,370,960			27,755,825
(continued)

FEMASYS INC.
Condensed Balance Sheets
(unaudited)
Liabilities and Stockholders’ Equity								March 31, 2024			December 31, 2023
Current liabilities:
	Accounts payable						$	1,095,730			1,137,823
	Accrued expenses							673,457			1,444,296
	Clinical holdback – current portion							93,376			65,300
	Lease liabilities – current portion							494,967			406,636
					Total current liabilities			2,357,530			3,054,055
Long-term liabilities:
	Clinical holdback – long-term portion							30,389			54,935
	Convertible notes payable, net (including related parties)							4,472,456			4,258,179
	Lease liabilities – long-term portion							1,902,991			2,036,067
					Total long-term liabilities			6,405,836			6,349,181
					Total liabilities			8,763,366			9,403,236
Commitments and contingencies
Stockholders’ equity:
	Common stock, $.001 par, 200,000,000 authorized,
		22,216,570 shares issued and 22,099,347 outstanding as of
		March 31, 2024; and 21,774,604 shares issued
		and 21,657,381 outstanding as of December 31, 2023						22,217			21,775
	Treasury stock, 117,223 common shares							(60,000	)		(60,000	)
	Warrants							2,631,838			2,787,137
	Additional paid-in-capital							124,994,678			123,985,306
	Accumulated deficit							(111,981,139	)		(108,381,629	)
					Total stockholders’ equity			15,607,594			18,352,589
					Total liabilities and stockholders' equity		$	24,370,960			27,755,825

FEMASYS INC.
Condensed Statements of Comprehensive Loss
(unaudited)
							Three Months Ended March 31,
							2024			2023
Sales						$	271,140			293,984
Cost of sales (excluding depreciation expense)							88,532			105,120
Operating expenses:
	Research and development						1,770,731			1,537,439
	Sales and marketing						300,487			244,896
	General and administrative						1,502,804			1,315,137
	Depreciation and amortization						71,228			133,066
					Total operating expenses		3,645,250			3,230,538
					Loss from operations		(3,462,642	)		(3,041,674	)
Other income (expense):
	Interest income						224,684			97,089
	Interest expense						(361,552	)		(1,672	)
					Total other income (expense)		(136,868	)		95,417
					Net loss	$	(3,599,510	)		(2,946,257	)
Net loss attributable to common stockholders, basic and diluted						$	(3,599,510	)		(2,946,257	)
Net loss per share attributable to common stockholders, basic and diluted						$	(0.17	)		(0.25	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted							21,775,357			11,872,255

About Femasys

Femasys is a leading biomedical company focused on addressing significant unmet needs of women worldwide with a broad portfolio of in-office, accessible, and innovative therapeutic and diagnostic solutions, including a lead revolutionary product candidate and FDA-cleared products. FemaSeed^® Intratubal Insemination, an innovative infertility treatment designed to deliver sperm directly where conception occurs, is FDA-cleared and has received regulatory approval in Canada. FemBloc^® permanent birth control in late-stage clinical development is the first and only non-surgical, in-office, permanent birth control method intended to be a safer option for women at substantially less cost than the long-standing surgical alternative. The Company has developed diagnostic products that are complementary for which it has achieved regulatory approvals to market in the U.S., Canada, and other ex-U.S. territories, and which are commercial-ready due to its in-house manufacturing capabilities. Its diagnostic products include FemVue^® for fallopian tube assessment by ultrasound, which can be used in conjunction with FemCath^®, an intrauterine catheter for selective fallopian tube evaluation, and FemCerv^®, an endocervical tissue sampler for cervical cancer diagnosis. Learn more at www.femasys.com, or follow us on X, Facebook and LinkedIn.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties. Forward-looking statements can be identified by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “pending,” “intend,” “believe,” “suggests,” “potential,” “hope,” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on our current expectations and are subject to inherent uncertainties, risks and assumptions, many of which are beyond our control, difficult to predict and could cause actual results to differ materially from what we expect. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ include, among others: our ability to develop and advance our current product candidates and programs into, and successfully initiate, enroll and complete, clinical trials; the ability of our clinical trials to demonstrate safety and effectiveness of our product candidates and other positive results; estimates regarding the total addressable market for our products and product candidates; our ability to commercialize our products and product candidates, or the effect of delays in commercializing our products, including FemaSeed; our business model and strategic plans for our products, technologies and business, including our implementation thereof; and those other risks and uncertainties described in the section titled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, and other reports as filed with the SEC. Forward-looking statements contained in this press release are made as of this date, and Femasys undertakes no duty to update such information except as required under applicable law.

Contacts:

Investors:
Gene Mannheimer
IR@femasys.com

Media Contact:
Kati Waldenburg
Media@femasys.com 

FAQ

What positive data did Femasys announce for FemaSeed in the PR?

Femasys announced positive topline data for FemaSeed infertility treatment.

Who was appointed as Chief Commercial Officer by Femasys?

Richard Spector was appointed as Chief Commercial Officer by Femasys.

What is the cash position of Femasys for funding operations?

Femasys has cash to fund operations into the second half of 2025.

What were the financial results for Femasys in Q1 2024?

Research and development expenses increased, sales decreased, and net loss grew in Q1 2024 for Femasys.

What is the accumulated deficit of Femasys as of March 31, 2024?

The company had an accumulated deficit of $111,981,139 as of March 31, 2024.