Q3 2020 Evofem Biosciences Inc Earnings Call

Ladies and gentlemen, thank you for standing by and welcome to the April fan I assigned since third quarter Twentytwenty financial results Conference call. At this time all participants are in a listen only mode. After the speakers presentation. There will be a question and answer session to participate on that portion of that.

Oh, you will need to press star one on your telephone please be advised that today's conference maybe recorded if you require any further assistance. Please press star ends here.

I'll now hand, the conference over to your speaker today, any rascal Abdulkarim Bio Sciences head of Investor Relations Ma'am. Please go ahead.

Thank you and good afternoon, everyone. If you haven't done so already I encourage you to access the slides, which accompany today's call and the press release, we issued earlier. This afternoon, both of which are Oh, some dot com under the investors tab.

Before we begin I would like to remind you that remarks on this call will contain forward looking statements, which are made only as of today November nine 2020 for a more detailed description of important risk factors that could cause our actual results to differ materially. Please refer to our annual report on form 10-K.

Most recently filed 10-Q and our current report on form 8-K filed with the FTC on June two up 2020 with that I'll turn the call over to Sandra Pelletier adult and CEO.

Thank you so much Amy Hello, everyone. Thank you for joining us. This afternoon in the second half is 2020, and then has achieved three significant milestones in September we launched Fixie, the first and only non hormonal prescription contraceptive drug for on demand you.

And I'm tumor we closed the $25 million strategic investment for magic in capital and we initiated our pivotal phase three trial of even 100 for the prevention of Chlamydia and the prevention of gonorrhea in women.

That's a temporary we announced the commercial launch of sexy. Despite the challenges we faced launching a commercial product in the midst of COVID-19, we're proud of our early momentum and we're confident about the long term success and sexy.

Considering that there are 21 million women in the United States, who are beyond hormone sexy has conservatively <unk> billion dollar market opportunity in fact.

So listen to this part if we can just acquired 3% obese 21 million of money. That's just 603000 women out of the 21 million that are already be on hormones and they feel their prescription seven times in one year, we will achieve this potential once again.

Illustrate that small percentages of market share will deliver very big results for fancy.

Our reported earnings represent only a small snapshot of our commercial launch which is now only two months in and raspberries, Our chief commercial officer will discuss later on the call are early indicators that support a strong growth trajectory and gets us well above that conservative figure.

Our extensive consumer brand awareness campaign has leveraged the targeted digital channels and key influencers to raise awareness effects seen with a diverse and engaged consumer audience early adoption of Tele medicine has provided women with expanded access effects, even without the need and without the hassle of the physician office visits.

And we are especially proud of our team's ability to implement the becsey Conti years experience, which is our comprehensive online experience for women seeking to gain access to contraception.

In this business and unwritten rule is that you take good capital when you get it at the right cost in from the right Party.

Well over a year, we built a strong relationship with actually been capital. They are backed by the Bill and Melinda Gates Foundation, and other global public health leaders like Merck and Novartis.

Agitation is deeply aligned with our core mission developing and commercializing innovative products to address critical sexual and reproductive health concerns of women. They're 25 million dollar investment was at a premium to the market on the date of close as well as a premium to the fund raising round we completed in June.

This is actually been largest single investment to date, what is important is that what that testifies to the confidence that they have in this team and the importance of introducing true innovation in women's health not just me too products in crowded categories for both them and for our shareholders. This was.

The theory smart strategic move.

The thing that I want investors to hear though that's very important is that the lion's share of the added in investment is earmarked to fund the development and L. 100 for the prevention of Chlamydia and gonorrhea and women we enrolled the first patient in our pivotal phase three trial in mid October in line with our stated timeframe and we met our enrollment target.

For the month of October in just nine days. So we're very confident that even in the cobot environment, we will not have any issues enrolling in the trial.

There is nothing at FDA approved for the prevention of Chlamydia and gonorrhea and every woman having sex is at potential risk.

The reality is that partners are unpredictable and that's sad, but it is true and condoms break and many times women don't when the kind of negotiation and therefore, they're not even used so the increasing prevalence of these S.T.I.s in the U.S. and globally attests to the growing unmet need either.

Even though 100 has the potential to be the first drug approved for the prevention of these communist T.I.s and many investors think this will be an even bigger opportunity for us the contraception.

In addition to our drive for innovation, which as you have seen is going to be threefold first would be only non hormonal contraceptive products that women use on demand then.

Then with different mention of Chlamydia and gonorrhea.

We continue to differentiate ourselves and were also differentiated by our culture, which enables us to attract to grow and to retain top talent at every level in every department.

Investors have the competence that we not only had a game changing product, but we have a superior team to execute so what are those adjectives really what do I really mean, when I say superior what I mean is that all of the people in our commercial organization and she's only work on the biggest products in contraception delivery.

I mean, very big results, because they know how to maneuver through hurdles they know and understand how to make these products right to the top of the mine for both women and for doctors.

Our sales team alone is second to none.

As we said before but I want to see it again they have an average of eight years of women's health care experience in 15 years of pharma their ability to call a longstanding relationships in the industry has provided invaluable resources, particularly now during the next few months because there's many offices that are closed due to the pandemic.

So I do want to tell you with full confidence you will not find a better team to make sexy a commercial success.

We are an organization that inspects, what we expect we have very close very consistent and on the interaction with the payer teams and the commercial team.

Last Friday, we had an incredible call with the entire sales organization. The purpose was to share success story to talk about how to overcome obstacles and to get feedback and I want to tell you that these reps have launch not just want not to sometimes three four and five contraceptive products. In these same categories and the stories that we hear from you.

Our unbelievably unique and different and many of them say that they have never seen this kind of response from offices and these are people, who would know better and they no different and we are so bring real this year and we say look we do not want to just know about the rainbows or the puppy dogs, we want to know about the war and so it's very encouraging to see that once these.

<unk> have an opportunity to talk to doctors and offices is very easy for them to see who these vecsey patients are.

So and I turn the call over to Jay file our CFO to review the results of the third quarter I want to highlight that this includes our first ever revenues, which are from just the initial three weeks of the sexy sales.

And Ross will talk in greater detail about the Vecsey commercial launch and the early trends in the marketplace, which frankly are very positive and Kelly Caldwell will give a clinical update and then we will open the call for questions So with that Jay.

Thank you Sondra.

For the three months ended September Thirtyth 2020, which included those first three weeks of sexy sales. We recognized 278000 in net product sales. This was from the initial stocking effect see by wholesalers specialty pharma customers adjusted for distributor fees kobe's and other related items gossip.

Cost of goods sold was 317000, which included 800000 onetime charge related to the product label.

Research and development costs decreased to 4.2 million in the third quarter of 2020. The decrease reflects an absence of cost for the vaccine and D.A. and prevents trial in the current period. This was partially offset by clinical trial expenses for ever Guard, which we initiated in October 2020, and higher payroll related expense.

This non cash stock based compensation due to increased headcount in the current period.

Selling and marketing costs were 14.7 million in the third quarter of 2020 compared to 3.8 million for the third quarter of 2019, we started breaking out. This line item in 2020 in anticipation of this actually launch and for the prior year reclassified 3.8 million from Gionee into sales and marketing expense to conform with this presentation.

The vast majority of the 10.9 million increase was related to the factory launch.

General and administrative costs increased to 7.2 million in the third quarter of 2020, mainly reflecting an aggregate increase of 2.9 million over the prior year quarter associated with various operational.

As a result total operating expenses were 26.4 million for the third quarter of 2020 as compared to 14.3 million in the prior year period.

For all other expenses was $3.7 million in the third quarter of 2020 and movie included a 3.1 million noncash change in self and fair value of the Baker notes and 700000 in accrued interest expenses related to those.

As a result net loss attributable to common stockholders was 29.9 million or a loss of 37 cents per share for the quarter ended September Thirtyth 2020, as compared with a net loss of 13.8 billion for 30 cents per share for the prior year.

We closed the quarter with 86.7 billion in unrestricted cash into Saundra mentioned in October we raised $25 million from actually been capital.

This provides us with one ray runway into the second half of 2021 based on current expense forecasted cash burn and I want to highlight its actually revenue provides upside to this forecast with that I'll turn it over to Russ.

Thank you Jay.

Vecsey is off to a strong start right out of the gate health care providers started writing in fact, you prescriptions in the third quarter, which includes only the first three weeks of data that she was able to achieve 385 prescriptions and we had our first refund for the quarter close.

I look forward to sharing more robust data on our Q4 earnings call in March we'll have a full quarter plus of data this year and to give us a better idea of the launch trajectory.

Among the many early indicators of interest in fact see our two that I, specifically want to highlight first.

First when you look at women, who have entered through the effects the contours experienced and qualified as a candidate for fixed fee 40.

43% of these women booked in employment through our telemedicine provider to discuss receiving the exact C prescription.

The effective concierge has experienced provider populists media had projected based on their experience and metrics from their prior launches, but the conversion rate would be 22%.

Next he prescription conversion rate is double these projections in fact, the populist COO noted that sexy is their most successful launch to date and that several thousands of women have come into the picture you experience in just the first eight weeks since launch.

Second we're working with 83 bars, social media to specifically to utilize their proprietary artificial intelligence to identify women, who may be more interested in non hormonal contraception in order to offer them an opportunity to learn more through a nurse support service before the vaccine launch.

The 83 bar Datametrics suggested they wouldn't be able to generate approximately 200 leads per month right from the beginning they blew that normally way with 200 in the first four days. They have consistently generated over 200 leads per week four to five times higher than they anticipated since the beginning.

This initiative over Twentythree hundred leads have entered the vecsey contours experienced to date through 83 bar.

Of all these women that they have reached out to 30% have engaged with 83 bar regarding factories approximately 75% of those highly qualified these have spoken with why don't beat Vecsey support nurses and requested to see at HCP to determine effects. The prescription is right for them.

Another indicator of overall interest and awareness Becsey is the high volume of web site traffic at both our consumer and our health care provider websites for factory on.

On the consumer side Www Vecsey dotcom, we are approaching nearly half a million visits since the launch on September eight and weekly page because it's consistently indicates that these women are not just entering on the landing page and leave their finding out more information about vecsey by visiting multiple pages.

And on the HCP side, we've had more than 31000 unique visitors by the end of October and again, each one does that mean on average two pages, indicating that HCP is are seeking more information on the prescribing affects you for their non hormonal contraception candidates.

A great deal of interest has also been generated through social media Influencers, particularly on Instagram now. Unlike typical celebrities we're working with women have followers identifying with them, we're more likely to be swayed to find out more information about becsey. Among these FXCM, but when she is a woman named Dr. Mark.

With more than 660000 followers that goes on the Bachelor and today. She has two children and isn't sure if her husband, our really ready for number three.

Our followers tend to be exactly where her followers are in regards to attitude and their stage of life.

Our influencers are equally influential with the other audiences a follow them they periodically discuss their own contraception journey and they sure stories about taxi with their followers you don't.

Our influencers have 3.6 million followers in aggregate with the biggest majority of these women are in our target audience for Fexeric.

Turning our focus to the sales force efforts our sales team has succeeded in detail infected to over two thirds of our target HCP audience. Thus far this.

This underscores the caliber of the team we hired good reps will find ways to see health care providers, even in the midst of challenging times. So while there has been roughly a 30% decline in offices that are willing to let salespeople enter into the office based on the call with 19 situation we are good.

Being creative in reaching our targets for example.

One of our teams important brings an ice cream truck to the parking lot in front of the LPG wine offices everyone's able to leave the office come after the truck for ice cream and while there are there are representatives discuss affects it with the entire staff of HCP and office personnel.

Other really creative approach, we've used is conducting outdoor virtual speaker programs, we certain months. So the attendees at this table look worse with the speaker presented on a large globe screen. These events were extremely well attended and they really result in very quick awareness of FXC.

The weather turns colder than North Trust me, our sales team will continue to find creative ways to gain access to HCP at our firm we are determined to be co improve in getting out the awareness of xcede.

Turning to market access we currently have over 55% of commercial lives that are covered by effects.

Our current coverage includes approximately 7 million lives that are covered at zero co pays are deductible by.

By prominent Payors, such as Unitedhealthcares, New York, Connecticut, Delaware, DC, Illinois, Maryland, Massachusetts, Oregon, Washington, and California. It includes Kaiser of Washington State. It includes Premier of Blue Cross Blue Shield Excel.

Alice Tufts health care plan Huh.

Harvard Pilgrim healthcare courts Health solutions Geisinger health.

Health now Blue Cross Blue Shield of Western and Eastern New York. When you look at this level of coverage right out of the gate for women's health products.

What this indicates is that payers recognize the uniqueness of FXCM and the unmet need of the existing 21 million plus women who are beyond our minds.

We continue to work with the office of women's health and the health resources and services administration or herself to update their birth control tables to include sexy as a new birth control option with a unique mechanism of action as a valuable ph modulator. The timelines for decision are unpredictable.

But we remain confident that vaccine meets the threshold of a new ammo way.

As has been recognized earlier by the pricing Compendiums as well as these payers I've already mentioned from across the country.

I want to conclude with a look at the market opportunity for factory.

Among the millions of women in the United States, who are at risk for pregnancy, and importantly, unintended pregnancy there.

There are three distinct segments, we will target for vaccine our primary segments, our first women using no contraception at all.

And also these women who are using non prescription contraception, such as barrier methods withdrawal or periodic abstinence.

Our second segment or as some might say later adopters are women, who are currently using infrastructure and contraception, but who may already be considering moving to a hormone free on demand method.

Sexy peak revenue potential is 1.4 to 2.3 billion by achieving only single digit acquisition percentages of women in each of these three segments.

Based on our early indicators of a positive trend and our plan to DTC campaign, which will be launched at the end of January we.

We are confident we can achieve pepsi's full potential and with that let me turn it over to Dr. Kelley Hall, our Chief Medical Officer.

Thank you Brad.

As Chief Medical Officer of Evo, San I am biased I am clearly a fan affecting but it's not because of my job. It's not because that was an investigator in effect. The clinical trial, it's because I'm, an ob Gi Lan he's still sees patients granted only once or twice a month, but enough that I remain connected to the women to elephant aims to serve.

I understand from a practical perspective through the sexy woman is I have first hand experience with women, who do not want hormones and who will not use an I'd I.

I had seen their dissatisfaction, leaving my office with a bag of condoms and frankly as a provider I would also dissatisfied with the lack of appropriate contraceptive choice for flexi.

The most effective contraceptive method is one a woman would use consistently and correctly. This is not a marketing message. This is reality.

Women have access to a great deal of information and today more than ever they are proactively driving the dialog about contraception.

And it will be July and it's not my place to tell a woman what to use I help redefine the option that she will use I'm excited that healthcare providers like we can now offer when a new FDI approved hormone free on demand contraceptive method. Thanks.

[music].

Turning to medical Affairs, we continue to have great traction with our publication and presentation strategy. We secured nine scientific presentations on datasets from Mpower, which was our phase three contraception trial and on and prevent which was our phase to be Sci prevention study.

Five key medical Society meetings this fall for.

Ram power. This included poster presentations at the Society for family Planning annual meeting 2020, where we were the sole sponsor of the poster hall, the nurse practitioners and women's Health 20, Threerd annual Women's Health Care Conference. The American Society for reprinted Medicine, 2020, Scientific Congress and the American College of Obstetricians and Gynecologists.

Ritual conference.

And for that to publications included an oral presentation at the American Society for reflective Medicine 2020. Thank you Vic congrats on sexual satisfaction data in that trial.

Additionally, the full increments results were presented in a poster at the U.S. Cdcs as TD Prevention conference and a poster on the impact of product adherence and condom use rate on rate of Euro general reinfection with chlamydia and gonorrhea and prevent were presented at the society for family planning annual meeting 2020.

Additionally, two abstracts on sexual satisfaction. These trials were published at fertility and sterility and the full Mpower manuscript was published and contraception.

We aim to have the full improvements manuscript published in the coming months and are working on submissions for spring conferences.

On the clinical side as Andres mentioned, we initiated our pivotal phase three trial for even a 100 for the prevention of Chlamydia and gonorrhea and women. This trial will enroll 1700 30 women at 90 U.S. study centers, specifically, we are enrolling women, who had had ended successfully treated for a urogenital chlamydia gonorrhea is.

Section at any time over the 16 weeks prior to their enrollment visit and you would had one or more risk factors for infection. They.

They will receive 100 or placebo with instructions to use study drug immediately before or within one hour before having sex for the four month treatment period.

In terms of timing, we expect to complete enrollment by the end of 2021 and to report top line results in the first half 2022 with an India submissions planned for late 2022 also.

Also I want to remind everyone that either 100 had been granted fast track designation for the prevention of chlamydia and women by the FDA and isn't ft. A designated qualified infectious disease product for the prevention of gonorrhea and women. So we would expect a priority review with a PDUFA date in mid 2023.

And with that operator, we'd like to open the call for questions.

Thank you and that's all reminder, ladies and gentlemen to ask a question will need to press star one on your telephone to withdraw your question simply press the pound not high school, one moment, while we compile the care neulasta.

Our first question is from David Amsellem with Piper Sandler. Please go ahead.

David Please check your mute button.

Our next question is from Jeff Hong with Morgan Stanley. Please go ahead.

Thanks for taking the questions.

Now this vaccine has been on the market for a couple of months can you talk about the dynamics for scripts being written themselves. So are these scripts being driven more by inbound requests from patients or our physicians more actively recommending sexy to patients and kinda. Appreciate any color you can provide in this dynamic and then I've a follow up.

Yeah. Thanks, So of course, some of our our metrics are still little bit early in the mix to do that we're currently.

In the process of doing in an a to your attitudes trials and utilization a market research project and we'll have more information for you later on that but what we what we do know is that we are seeing about.

You know a pretty even mix between those that are coming through.

And our Tele medicine portal, which is an indication that they are following through their social media or through the other avenues to find out about it and as and then the other half are coming through.

The health care provider, we think most of those health care provider ones are coming through based on the fact that that once a health care provider has learned about it. They are then.

Finding women that come into their practice or that they have already identified that are good options before.

I see and then making sure that they are aware of it and have an opportunity to get a prescription.

Great and then can you talk about the refill process when a woman gets the initial prescription does the physician include a certain number of refills in that script and I know.

No. It's a bit early in timing can vary but can you talk about what you're hearing on the proportion of patients who are getting results. Thank you.

Yeah, you know, we're seeing it being written in a few different ways at some some of the original initial prescriptions that were going out were.

You're going to probably a.

I appreciate for a just a one one month or one prescription.

Script, what we have been able to do is work with.

Most of those offices and they are now writing them in three or six months typically because knowing that as new products sometimes.

Prepares don't won't accept a 12 month, but what we are seeing is that that those scripts are being written in a manner that allows for women to get their refills done we were starting to see refills of course, starting to pop in the system now.

But as I would remind everyone because this is a.

On on demand or PRN only use it when you needed method that will vary depending on the frequency of sexual activity that each individual.

Person has so as you can see as probably appreciate there will be some who fill their script.

Every few weeks and then there will be others, who fill it every couple of months. So we have started seeing those pop in well hopefully have better data points, when we get to our.

Q4 call in March that will help us understand the frequency and how frequent.

People are filling those scripts again and Jeff just to add to that too we've actually had some interesting and takes as some of our sales force that there's a lot more patient centered counseling that seems to be happening very actively now either over the phone via telemedicine or in person and so for example, there are some patients on average market research tells us that women.

FX twice a week. So that's why when we designed a prescription which is a box of 12 Prefilled applicators, we did that so when they would have more you know should they need it but also if a doctor says that a monthly prescription because a woman is more active is a box of 24 that also could be a one month supply so.

We see that you know depending on what's happening with the counseling situation that a typical you know a typical prescription is for a box of 12, but it could be as much as 24, it could be a monthly supply.

Thank you.

Yeah.

Thank you. Our next question comes from Annabel Samimy with Stifel. Please go ahead.

Hi, Thanks for taking my question just wanted to.

Go back to the comments around prescriptions Refills first you Miss I think it was 385 prescriptions have been written.

Can you tell us where the weather the fill rate is.

Is very high or is there a lower fill rate secondly on the refill I know you've assumed about seven refills per year have you do you have enough data at this point to know whether some women are kind of gaming it around their cycle.

Whether that's the seven is the right number to use you talked about higher but is there anyone using it and the lower fashion and then separately just.

Want to get your thoughts around that price and the first quarters I know that you know the first prescriptions a zero co pay and then after that it's $30. So how should we assume that price to evolve.

Over the next couple of quarters or next few quarters.

And then finally any additional market research you've done around keeping sexy and either 100, a separate products. Thanks.

So I'll jump in first before I took it over to Jay.

And so I think the real question, maybe on a bill if I heard this right is what was our abandonment.

Around the first the scripts when they were first being written and what we found was there was initially a few of the women who would be told by the the pharmacy that they're there. They werent covered under the co pay card simply because of the fact that that scrip got to them before the co pay cards is.

We've been able to rectify that and make sure that the pharmacies are putting that co pay card and for them. So there was a pretty small number of abandonments that that happened at that point.

The co pay card has worked really quite quite well and we've actually seen about 50% of those scripts that have gone through that required.

Having a copart a co pay on that.

As I kind of indicated earlier the the level of refills is at this point because we only had three weeks of data in the in the quarter and then we've got some data that happened since then but it isn't sufficient enough for us to make any kind of statements around what we expect or anticipate the the level of drilling.

But we did come up with that seven refills, we did look at that as sort of the if you will the average so we didnt know that there would be those who would in fact, probably have up to 12 refills on on a year the basis and those who might have four and when we looked at that in aggregate, we determined that the right number was.

Right around that seven so we anticipate that as we start getting into three months, a full quarter's worth of data.

We'll have a lot better indicator of what that refill rates typically looks looks like and then.

Jay can kind of speak to what our.

Our situation is right now with what's really early data.

Yeah, and you know obviously.

Few weeks don't make a permanent trend, but obviously the co pay program in itself is designed to basically reflect in lieu of a sample free sample program. So it's really mad too so really try and mitigate any sort of issues that women might have and.

Really help reduce the risk of any high out of pockets that that might cause abandonment at the pharmacy as well so to that effect through.

Through September as Russ said, we are seeing in that 40% to 50% range of women on commercial insurance, taking advantage of the co pay card and distressed it's not everyone that does get that that full for first one free we are seeing that split amongst that small proportion so about.

Half of those that are participating in a co pay program do get that first one free so thats half of about 40% to 50% range of those people participating and we're seeing about an average of 215 through the month of September for those first three weeks of an average co pay.

Now going forward.

We obviously don't anticipate the program to continue in perpetuity, but we do expect obviously that will still be a place for the DTC launch that's occurring in the first quarter of next year and then we'll continue to assess it as as we continue to monitor monitor prescriptions as it goes forward from that point to 2021.

And before I pass it over to Kelly just to talk about.

Give you a 100 real quick on the market research side on adult one of the key indicators that you can always point to is awareness awareness tends to be the one metric that both on a consumer and a HCP side will dictate what the uptake looks like so we are currently working on getting.

In our very first awareness.

The research done so we can start seeing after just a couple of months, where we're where we're currently sitting when it comes to that that metric and those are key metrics and ones that we certainly look forward to sharing as soon as the opportunity presents itself to do so.

And if I look at that.

Sorry did that answer your question yes.

Just one more follow up if I could this is I know that you have your own specialty pharmacy. Thus distributing product is I must tracking going be capturing that accurately or is there a part of the market itself can be captured because of that.

Yes, it's a great question. So no. The the mail order of course, which is your number Rx and we do have some level of significant levels going up through that part they are not captured through.

Somebody writes you via we will when we get to our.

Our reporting out of that.

The quarter's end, we will have we will have.

Corrected those data points that come out of Ikea and symphony to include that data, but that will be up at the end of the quarter.

And how much is going through new products right now.

I don't have the specific numbers that are going through but we are seeing that right now we're in the neighborhood of about 50% of our overall businesses Tele medicine now some of those go through number and some of those are actually going through there the regular bricks and mortar.

So I don't have that specific breakout right at the time to give you. The the number that are going through there but.

It looks to be somewhere.

In that neighborhood of about 30%.

Okay, great. Thank you.

Thank you. Our next question is from land sales, but our whole with H.C. Wainwright. Please go ahead.

Hi, Thanks, a lot for taking my question I just had a couple of questions regarding the marketing and promotional activities.

Supportive sexy can you just kind of give us a description of what the nature of those consists of at this point than the launch and how you expect that overall marketing and promotional activity.

The change over the course of the next two to three quarter and then also if you can comment on this in the context of the actual expenses line item.

And you anticipate that based on the marketing and promotional spend as of right now.

Hopefully that increase or whether you expect significant further quarterly increases in.

In the months ahead, as we get further into the long but.

Thanks, Ron So are our primary marketing approaches right now when it comes to the consumer side is through social media primarily for Instagram.

Twitter and Facebook and of course, as always kind of say to my contemporaries when they ask where are the ads, they're not seeing them I, usually say that's a good thing because if you are seeing them, you're probably in the wrong place because we're not targeting people have.

My age or or or gender on that one. So what's happening is we are we're active in that in those spaces. We're seeing a lot of activity. We're seeing a lot of repost of different things that are going out and.

That's really taking place in that regard what will change. If you will is that we will come out with our our commercial or.

Our over the air video as is referred to on introducing an online.

And that will come out at the end of January that will of course give us a higher level of visibility and just as a reminder, no. The reason that you wake on that is because.

FDA does want to make sure that the health care provider audience is fully aware of the brand before you start sending women into them to discuss something that they are not.

Completely familiar with so we know that based on our activity right now with HCP it will be in a position to.

Meet those requirements by the first part of the year. So that's what we'll will significantly change.

Just mentioned broadly in them Ajay speak more specifically that allow the budget items that we've already put into the budget account for those changes that are taking place in.

In order to be able to have that ready when we get to the first quarter of next year.

Yeah, and just to further obviously you know that.

To be the switch in the ground, we do anticipate that we'll be giving some additional guidance and insight into sales and marketing spend at our year end call at March.

Keep in mind, we are reiterating our guidance that we gave.

FDA approval and launch there.

About the sales and marketing spend obviously, thats, where a partial year. So I think it's all a safe to say that it will go up in the next year and we're currently working with Ross to see what that exactly translate to $1 I will tell you, though I have told them you cannot have a super Bowl AD, yes in the future.

Yes totally understood. The last quick question one quick question was.

Yeah.

We look at how we.

Segment of the target population appears to be most receptive to the promotional activity.

At this juncture you have a sense of whether that is indeed, those women who are not currently on any form of birth control or if it is a different segment of the population for example, those who aren't hormonal birth control versus those who utilize some other form of contraception.

Yes, so what we do on our market research around awareness wouldn't be able to get more granular. So you've asked the question do I have a.

A feel for it and we are getting a feel for based on a lot of what we see in social media and it certainly is that segment that we've talked about with the $21 million for women who are not currently using.

You know a prescription form of contraception, they seem to be the ones that are are having the most conversations around that many of those women are indicating that previously they tried other forms of of non hormonal contraception that has been not satisfying for them and so if I had to just.

Say right now before we get all that awareness data back to US. It's certainly is matching up exactly with what we anticipated it would be in terms of those women who indicated in our prelaunch market research would be most interested in this it seems you panning out pretty close to exactly what that research and told us.

Our prelaunch market research.

Okay, great. Thank you.

Thank you. Our next question is from David Amsellem with Piper Sandler. Please go ahead.

Okay.

David Your line is open.

Okay can you hear me now.

Yes, we can hear you now Highgate right alright.

All right. Thanks.

So.

Couple of quick ones first on.

[noise] sampling and co pay assistance.

Given the sexy.

Behave.

I always like a like a consumer product.

In that in a bad way.

Should we think of sampling and co pay assistance as being something of a permanent fixture.

Of of promotion.

And the.

Life of the product. So that's number one and then number two just moving on to S.T.I. prevention.

I know that you said that you're going to brand this definitely but.

But I guess with that in mind, how should we think about the extent to which you need to expand the commercial organization to support.

That.

That opportunity.

Does it become more of a a GP focused effort and.

Then help us think longer term.

You know the ramp up in the commercial infrastructure and associated spend would be with that so.

Summing that opportunity bears fruit. Thanks.

No.

Actually I will acknowledge would you.

That David the category is a very much consumer driven category always has been where women.

Women typically who have made a request of their healthcare provider for a certain.

Type of contraception, or our new more than 90% likely to get that so weve recognized that from sort of the get go in and make sure we structured all of our activities.

Around that so yes, we are seeing that.

Women are in fact, becoming aware of going in asking for and and talking about the opportunity for a non hormonal.

Brand opportunity. So we will continue to make our focus around.

Driving this through largely women.

Asking for and becoming aware of of the brand so that it pushes through its as we usually say is that pushed pool.

Part, where we're really trying to get the the the woman to push it into the Doctor's office and then Dr. do the pull through by providing a prescription for her or in this case going.

Online so as I've kind of said before.

This is a category that women are not as inclined as.

Example, having been associated with.

You. These for for many years, it's not as likely that someone would once someone else. Besides their own health care provider to do an insertion of something like an I'd, whereas in this particular case, we're finding women are pretty willing and accepting of going to a telemedicine opportunity to a helper.

Care provider that they may or may not know or that they even don't even have to talk to because it can be done asynchronously. So we're seeing women be the catalyst to drive.

The uptick.

Yes for the commercial sense for 16.

So in regards to the FDI part of that what we've also been able to look at it again, we're still a little ways away from whether we would have to increase the the the commercial footprint on that.

Of course, as we navigate as the rest of the world does through the COVID-19 situation, we'll know more about those kinds of things, but we are we don't at this point I anticipate that we will require a significant change in our footprint simply with the approval.

Of that those assets and as Weve mentioned on other calls you know we don't yet know exactly when it is done and we do file how it will be filed whether it's filed as an entity that will be with taxi or if it will be in India for a separate brand and of course that will make some determination, but that those those considered.

Patients are still down the road just a little piece and we're not in a position to say today, whether or not if it's one of those.

Pathways with the other well and honestly today that is that liquidity telemedicine and telehealth platform you know we have recognized.

Obviously, we already knew the power of that but the power is strengthening right every day as more women are getting used to frankly doing everything virtually so you know that maintains the momentum and continues to grow that may mitigate the need of having so many feet on the street. So to speak so we continue to evaluate it but so far we've seen at least.

The way with this current launch with sexy for contraception that we do have is actually a very very perfect mix of the 70 people in the field with the telemedicine platform, but yes, we'll keep evaluating it but we may in fact not need to add at all okay.

Okay, and if I may sneak in a follow up that's really helpful, but speaking of commercial infrastructure.

And I apologize if I missed this if you commented on this but what's your.

Level of urgency, if you will or or how are you prioritizing the potential.

Addition of another asset and women's health, where you can leverage the infrastructure you have in place.

Yeah, well, that's a great question, so and Matt Here's what I would say to you is that.

We obviously want to prove to everyone that we have the team in place with the right asset to not this out of the park and what we know is that once that's accomplished its going to put us in a very different position around cost of additional capital and opportunities for additional partnerships. So.

So at the moment I would say that there is not an an urgent need 'em, we do know and Salesforce is costly and we recognize that so we want to knock it out of the park with sexy first improving showed everybody that we know exactly how it can be done because then frankly, we think we would be a more advantageous partner, there's a lot of companies we've talked to that or.

In phase two but they don't have a commercial footprint. They don't have the expertise and frankly, they don't know if they're going to be able to raise enough capital to build the commercial footprint, even if they wanted to and so we think we will end up being the perfect appropriate partner for them to talk to you about putting their asset in our bad, but we do know that we need to stay very very.

Diligent and deliberate and focused on this product first you know to show the whole world that frankly pretty.

Let's see they have an innovation has never been done before just like sexy, which we know there are some skeptics out there about that we'll be able to show any partner whether its a product in a category that already exists for a brand new product that we know exactly how to do it so.

So I wasn't trying to be up to the point is is that it's not urgent because we have some time to show and so we're talking to people and thinking about this but I don't think that you'll see us take any quick action on.

And really advance it until the end of next year, when we fully proven the sexy platform.

All right. Thanks.

Yeah. Thank you and this concludes our kinase session for today I would like to turn the call back to Sondra Pelletier for her final comments.

Great. Thanks, so much.

So I've had the opportunity to talk a lot about what we're doing and what we're doing and this virtual environment and you know outside of breathing talking about double up as effectively as my most favorite thing and I really mean that.

And people have asked me you know what our investors are they missing anything until the one thing I want to share is that.

We know that we have some amazing investors and yes. They are mostly male dominance and these investors say to us that they don't want their daughters can take hormonal birth control for 20 years that they are worried about and suffering from side effects and not feeling like themselves. We they say to us that they don't want the women in their lives to suffer.

From those kinds of side effects and they really want the women that they know that they talk to that they care about to feel as good as they possibly can while protecting themselves. So we actually feel that everybody now understands that it is time for new auction and once investors take the time to look under the hood so to speak of adult.

Then they really like what they see.

The one thing I know to be true is that there are moments in time it change categories.

When for example, the hormonal I easy came out Marina It was a moment in time when women were tired of taking a pill every day. They wanted a fit and forget method that product was supposed to do 74 million and it does $1.4 billion today that moment exists now for flexi women.

Want a non hormonal options they want something that they only use when they need it and never when they don't they are ready to be empowered just like men have been for years and I know that I've said, it before but I want to say it again, because the market is speaking to us in validating what we know to be true that moment in time is happening again in this category.

And it's happening for non hormonal an apples then appear to deliver that company is filled with people who are the very best in their class. We've come together with a common mission to improve the lives of women by developing and commercializing real innovation.

We have an approved asset in flexi and this is a surprising number to me the only 40% of drugs that started the FDA process actually make it to FTC approval. So we are disrupting the market with a first in class hormone free product and we just didnt answer second asset in the pivotal phase three study for prevention of Chlamydia and gone.

Korea and again there are no approved drug products to prevent these FDIC our trial will build on the very highly positive statistically significant results that we already shared from our phase Twob clinical trial.

So we feel we've proven our ability to deliver on clinical record we've proven our ability to raise capital when very few companies can bring in the money that they need and we will prove that a Harvard business School study should be written about how we successfully launched a product during a club a global pandemic.

Ultimately in the end women deserve more.

Apple fan is delivering and if that is not worth investing in I don't know what is so thank you for your support and have a great rest of your day.

Ladies and gentlemen, thank you for participating in today's conference you may now disconnect.

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