TherapeuticsMD, Inc. Q4 FY2020 earnings call

Management Statement and Operational Highlights

• Balance Sheet: Strengthened balance sheet by raising over $180M in net proceeds since November, cash balance over $200M. Worked with lender to reduce future covenants, gain consent on vitaCare divesture, and pay down $50M debt by end of March.
• Financial Results: Fourth quarter overall net revenue $22.6M, 30% increase in product net revenue. Product gross margin 75%, down 6 points due to pandemic-related inventory write offs. Reduced operating expenses to achieve $80M OpEx for second half of 2020.
• Payer and Commercial: Maintained all major payers. ANNOVERA had 78% commercial unrestricted coverage, consumer campaign with Whitney Cummings generated 2.7B impressions. IMVEXXY saw new prescriptions recover, changed cash pay program and gained preferred status with a PBM. BIJUVA saw slight TRx growth despite deemphasis.

Segment Performance

• ANNOVERA: Fourth quarter net revenue increased 42%. Average net revenue per unit was $1336. It was the most significant driver of the 30% increase in total product net revenue. Quarterly total prescriptions filled increased 15% over the third quarter, with approximately 6000 total prescriptions for the fourth quarter.
• IMVEXXY: Fourth quarter net revenue increased 29%. Total prescriptions decreased 5.6% to ~123,000, but new prescriptions began to recover, increasing 2.5% Q4 over Q3. Average net revenue per unit improved to $54.
• BIJUVA: Fourth quarter net revenue increased 36%. Net revenue per unit was $52. Even with deemphasis, saw slight growth in TRx while maintaining NRx.

Guidance

• Revenue Covenants: Updated aggregate revenue covenants for ANNOVERA, IMVEXXY, and BIJUVA with increasing targets through 2022; believed covenants set at minimum levels below revenue expectations given COVID.
• 2021 Plans: Expect to invest in supply chain, marketing, and digital capabilities. Cash OpEx per quarter expected to average $45M to $48M in 2021. Anticipate strong revenue growth throughout 2021 and 2022, accelerating as COVID lifts.

Risks

• COVID Impact: Uncertainty around how COVID will affect sales and market access, though expecting tailwinds as restrictions lift.
• Revenue Recognition: Mismatch between Symphony-reported units and actual sales, making it hard to accurately gauge revenue from certain channels.

Question and Answer Q: Update on vitaCare divesture timing, gross margins in 2021, and COVID impact A: Rob expects vitaCare divesture this year, gross margin expectations tied to COVID lifting and government channel openings, COVID expected to have a headwind in first half but tailwind in second half.

Q: Mismatch between reported prescriptions and net revenue A: Symphony may underreport units from certain channels, revenues recorded on GAAP basis from sales to wholesalers.

Q: Balance sheet and debt paydown, gross margin improvement for IMVEXXY A: Plan to maintain current debt structure, co-pay changes for IMVEXXY expected to continue improving gross to net throughout 2021.

Q: Share gains for ANNOVERA and IMVEXXY, impact of generic launches A: Share gains tracking well, expected to accelerate with preferred PBM status, generic launches not expected to impact ANNOVERA's trajectory as it fills a unique market void.