TherapeuticsMD® Announces Third Quarter 2020 Financial Results

Rhea-AI Summary

TherapeuticsMD, Inc. (NASDAQ:TXMD) reported a significant 80% increase in net revenue to $19.3 million for Q3 2020, surpassing estimates for the sixth consecutive quarter. This growth was driven by a 62% rise in product sales to $17.3 million. The company reduced operating expenses by $11.0 million, totaling $37.1 million. Notably, ANNOVERA revenue soared by 250% to $6.4 million, while IMVEXXY and BIJUVA also showed strong performance. The company is exploring the divestiture of vitaCare, potentially unlocking over $50 million in non-dilutive proceeds for shareholders.

Positive

• Net revenue increased by 80% to $19.3 million compared to Q2 2020.
• Product net revenue reached $17.3 million, a 62% rise from the previous quarter.
• Operating expenses decreased by $11.0 million to $37.1 million.
• ANNOVERA revenue increased 250% to $6.4 million.
• IMVEXXY revenue increased by 35% to $6.8 million.
• BIJUVA revenue rose by 22% to $1.6 million.
• Exploring divestiture of vitaCare, potentially unlocking over $50 million for shareholders.

Negative

• Net loss for Q3 2020 was $32.6 million, though improved from $52.0 million in Q2 2020.
• Cash on hand decreased from $113.8 million in Q2 2020 to $79.6 million.

BOCA RATON, Fla.--(BUSINESS WIRE)--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.
  • Product 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.
  • License 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.
  • This PBM will include ANNOVERA as the only preferred branded contraceptive vaginal ring agent and will remove NuvaRing^® 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.
  • This 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			Three Months Ended			Three Months Ended
		September 30, 2020			September 30, 2019			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.
  • The 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.
  • Gross 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.
  • The decrease in operating expenses was primarily a result of the Company’s cost containment efforts to reduce overall spend.
  • For 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.
  • Net 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.

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
CASH FLOWS FROM OPERATING ACTIVITIES
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