Q3 2020 TherapeuticsMD Inc Earnings Call

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[music].

Good morning, ladies and gentlemen, thank you for joining us for <unk> therapy.

Therapeutics N D three quarters Twentytwenty financial results conference call.

Following prepared remarks for the company, we will open the call first question.

I would now like to kind of go all the way to Therapeutics NBC, Vice President Investor Relations, Nicole how should we go peacefully.

Good morning, everyone. Thank you for joining today to discuss our third quarter financial results and business update. This morning Therapeutics NB issued a press release announcing our third quarter financial results the press.

This release is available on the company's website therapeutics, M.D. dotcom and the investors and media section on today's call from Therapeutics MB or Chief Executive Officer, Robert Funny, Vo, Chief Financial Officer, James Director, and Chief Commercial Officer, Don how costs.

Like to remind everyone that certain statements made during this conference call may contain forward looking statements such statements such forward looking statements are based upon current expectations and there can be no assurance that the results contemplated in these statements will be realized actual results may differ materially from such statements due to a number of.

Factors and risks some of which are identified in our press release and our annual quarterly and other reports filed with the FCC. These forward looking statements are based on information available to therapeutics and be today and the company assumes no obligation to update statements as circumstances change an audio recording and webcast replay for today's conference.

I will also be available online in the investors and media section of the company's website for the benefit of those who may be listening to the replay or archived webcast. This call was held and recorded November nine 2020 with that I'll turn the call over to see repeat X.M.D. CEO Rob Finizio.

Good morning, and thank you for joining todays call.

On today's call, we will review, our third quarter performance, our future commercial plans as well as progress made on strengthening our capital structure.

Presenting on the call will be James to record, our Chief Financial Officer I'll.

<unk>, our chief commercial officer.

Let's turn to slide four.

We delivered a strong third quarter of operational execution across our product portfolio that resulted in growth in prescriptions improvement and that revenue per unit increased total product not revenue.

Even in the face of challenges presented by coal that we achieved 19.3 million and total net revenue in the third quarter, an increase of 80% over the second quarter.

And I've ever had approximately 115% increase in total prescriptions dispensed over the second quarter. In addition, our menopausal products achieved double digit growth in both new and total prescriptions in the third quarter over the previous quarter.

We also realized the result of Swift actions, we took to reduce our operating expenses and cash burn.

Turning to our intellectual property.

We continue to fortify innovators patent portfolio to provide lasting durability for our flagship product recently added two additional patents to the Orange book for a total of three listed patents for Infinera.

This provides patent exclusivity through 2039.

For the matter patent portfolio.

We recently added one new patent firms actually and one new patent for Bud you, though.

Both Orange book listed both.

Firing in 2033 in 2032, respectively, I will now turn the call over to James directly.

To review the financial performance in more detail James.

Thanks, Rob, let's move to a review of our financial results and key metrics from the third quarter turning to slide six our overall net revenue for the third quarter increased to $19.3 million, which included $2 million in licensing revenue from milestone payments from Knight therapeutics due to the Canadian approvals of index.

And by Juba.

17.3 million net revenue from product sales to wholesalers and pharmacies.

This was a 62% increase in product revenue from the second quarter. This.

This increase was driven most significantly by the 250% increase in net revenue from an era, where the average net revenue per unit remained consistent with prior quarters at 1300 $39.

Additionally, as you can see on the chart index and bite you, but also increased by 35% and 22% respectively compared to the previous quarter on a revenue basis. The average net revenue per unit increased to $51 for a decade and $47 for by Dubai.

I can also report that the trend in sales to wholesalers and pharmacies on a unit basis was consistent with the trends in the reported prescriptions filled by patients in the core.

Moving on to slide seven let's review some key financial statement items.

So our return to a more normalized gross margin of approximately 81% in the third quarter, which was an improvement of 22 percentage points over the second quarter.

Cool that's the second quarter gross margin was adversely affected by the write off related to buy Juba inventory obsolescence.

The results of our previously announced cost savings initiatives and our focus on strict cost discipline allowed us to reduce operating expenses, excluding non cash items by 11 million or $48.1 million for the second quarter to 37.1 million for the third quarter. This keeps us on track to achieve our goal of 80.

<unk> million and operating expenses in the second half of 2020.

However, depending on performance, we may pursue additional investments in S. DNA to further drive growth and enhance employee retention.

Our net loss improved by $19.3 million from 51.9 million for the second quarter to $32.6 million for the third quarter.

Net cash used in operating activities decreased by 22 million from $56 million for the second quarter down to 34 million for the third quarter, primarily as a result of increases in net revenues and the reduction of operating expenses as compared to the second quarter of 2029.

Now I'd like to update you.

I guess, we have made in improving our capital structure slide.

Slide eight.

We have identified a source of non dilutive funding with the potential divestiture of our data and patient services hub called Vidacare prescription services.

Medicare makes a complex process of filling patient prescriptions simple cost effective and stress free.

In recent months COVID-19, as highlighted the value of pharmaceutical manufacturers being able to connect directly with patients. This as well as the rise of interest and investment in both subsurface and pharmacy service companies as spark outside interest in Vidacare.

We recently received numerous inbound inquiries from other pharmaceutical companies seeking to utilize vidacare services as well as inquiries from potential partners or sponsors looking to acquire a controlling interest in vidacare.

As a result of these discussions we believe we can unlock substantial value for our shareholders by divesting vidacare to a partner who can capitalize on the business and grow it considerably.

We have retained Greenhill and company has our advisor and are currently running a process to help us find the right partner for Vidacare capitalize and grow this business continue to support our products and generate the most value for our shareholders.

Based on the initial indications received so far we believe the enterprise value of Vidacare with the right partner can be upwards of $100 million and depending on the ultimate transaction structure to generate at least 50 million and non dilutive proceeds to the company while also retaining an interest in.

The newly capitalized business.

Our body care team is working with interested manufacturers to develop a robust customer pipeline. So that an independent body care, we'll have the focus and resources to capitalize on this innovative platform.

We believe this unique source of non dilutive funding will help generate the additional capital necessary to further commercialize our products, while potentially retaining material upside in the vidacare business for our shareholders.

In addition, we continue to work to address concerns about our ongoing cash needs and the covenants with our lender I'm pleased to announce that our lender has lowered the minimum cash balance requirement from 60 million to 45 billion through December 31st Twentytwenty.

We believe the effort.

Your job successful and provide the necessary capital for therapeutics MD to execute on its plans moving forward.

Now I'd like to turn the call over to Don to discuss our payer progress and commercial plans.

Thanks James.

I will start with a quick overview of payer status and then review the momentum seen across our part of product portfolio in this quarter.

Let's start with payer access and updates on slide 10.

We have maintained all major payers across the product portfolio and continue to make progress.

Hi, with Hana Vera Caremark added and Ivera at non preferred status in August. We also made progress with Medicaid West Virginia. Medicaid has made an affair unrestricted as of October 9th and Medicare advantage. There as of November 1st for fee for service, we had an additional win with anthem.

Moved by Giovanni from non preferred to preferred as of October 1st by Juvin change coverage, 71% for commercial.

Let's move to slide 11.

Now that we have strong payer coverage Fran ivera, let's look at how the song access combined with favorable state laws for birth control are supporting low out of pocket costs for our flagship product and Ivera first when looking at a cross section of top commercial payers. The cost friend of era is the same or less than the judge.

Eric friend move around on an annual basis.

In addition, our data showing that 80% of patients to pay out of pocket and 17% paid between one and $60 for the annual protection advantage. There. We know this from the 1800 patients that have utilized a patient care and data hub Vidacare, we believe the patient out of play.

The data is representative of all patients regardless of where they fell.

Let's move to slide 12.

I'm also pleased to announce that we have gained preferred coverage for Anna Vera with one of the top pharmaceutical benefit managers that will begin in January. The reason. This is significant is that approximately 20% of commercial lives.

Managed by this pair and Ivera will be the preferred and only branded contraceptive bachelet rang with despair, which means he competitors will be removed nouvel rang will be excluded from the TV 2021, formulary, which we believe provides an opportunity for a shift in market share to.

Enough era.

Moving to slide 13.

And that see also gain preferred coverage with the same PBM and as such will be the only branded pharmaceutical on formulary for the VVA class Prime.

Hi mine frame Intrarosa off Sina and Astra and we'll all be excluded from the Pvms 2021 formulary as the only branded pharmaceutical in the VVA class. This represents an opportunity for shift in market share to one vaccine.

I would also like to remind you that summer and had over 17% national market share in the third quarter. In addition by being preferred this will reduce utilization of our co pay program for these patients.

Switching gears I'd like to provide some context of the continued impact of COVID-19, and how we are proactively navigating the changing environment.

Turning to slide 15.

Hope it continues to impact us in two ways first patient visits into Ob T Y and offices continues to be lower than pre called big level.

This results in less switching behavior to new brands.

The second is more limited access for Salesforce with our full prescriber base.

Well I guess is increasing from from its maximum impact in may but.

The chart shows but access to prescribers is still significantly down from free told that level.

[laughter] fight that.

We have had a record quarter frana Vera saw growth across the portfolio in Q3 and believe we continue to be on target for Q4.

Turning to slide 16, so how are we accomplishing growth in this environment.

Actually across consumer and Prescriber initiative, we've adapted our plans in innovative ways to engage our customer base virtually supposedly educational programs and initiatives that allow patients to gain access to our products. Even if they are not seeing their provider in person.

Moving to enter their results on slide 18.

Quarterly total prescriptions filled by patients is on the left hand side as you can see total prescriptions more than doubled over the second quarter coming in at approximately 5200 for the third quarter. These results were flat for the first time, our full launch plan activated and in place in the third quarter would be on the.

Apologetically Anniversaried consumer campaigns.

In addition, during the quarter our field force access to prescribers increased from the second quarter, but was significantly down from pre cobot levels. The improvement in access to prescribers allowed us to continue expansion of our writer base and both breadth and depth.

Finally as mentioned an affair was added to Cvs caremark at non preferred status in August and net revenue per unit from Maine song at 13 39.

Turn to slide 19.

Let's look at our writer base in more detail starting on the left hand side of the slide you can see the number of writers overall doubled in the third quarter over the second quarter moving to the right hand side of the slide not only do we doubled the number of writers. We also improve writer loyalty a key trend we look for as an early.

Indicator of growing brand opportunity and health.

Turning to slide 20.

That's a nice uptake of an affair out we're placing an emphasis on activating the consumer to request fan of air from their provider you can see that the contraceptive market he needs with 50% of women in this category knowing the birth control not that they want before seeing that prescriber. The chart on the right illustrates physician will.

Next to prescribe an affair to the majority of patients that asked for the product.

This dynamic is why we have prioritized direct to consumer advertising as a key element to grow and I've era.

Turning to slide 21.

Our first consumer campaign Unapologetically, Anna Vera launched on July 1st and is scheduled to continue into 2021.

The next phase of the consumer rollout is our Influencer campaign, including our celebrity spokesperson.

An important initiative given the importance of peer to peer endorsement and the birth control category. We will also continue to focus on Tele medicine as a channel continues to grow for the industry and for an affair.

Moving to slide 22.

In addition to the consumer campaign, we are focused on continuing to educate prescribers on the value of an affair.

Hi, My messaging perspective, we are heavily focused on helping the prescriber identify appropriate patient types through our key messaging.

Finally with access to providers challenge, we continue to press on medical education efforts, which have proved valuable with 33 virtual speaker programs with over 500 attendees to date.

Turning to slide 23.

Another significant driver for Anna Vera is refills, which we believe will be significant for us in the out years as end of air volume growth.

We are confident in the opportunity of refill due to the robust data we have on patient acceptability in a study of over 1000 women conducted by the population Council.

The next week and we are confident to rebuild the very low out of pocket costs being experienced by other patients that I mentioned prior last this is translating to actual refills that are starting to occur approximately 59% of patients that are eligible to be filled this early in the quarter have done so.

Moving to slide 24.

Another catalyst for NFV right, if the growth of multiple channels to grow across the multiple channels, we're working with the leading partners and distributors in each of the relevant segment's public health the military and telemedicine, the public health and military channels have experienced a slowdown due to co bid, but we have continued to make progress with both actually.

Yes, and pull through as bases in clinic begin to open.

Now, let's review our menopausal product.

Moving to slide 25.

In fact, the quarterly total prescriptions filled by patients is on the left hand side. The continued rebound event Iraq is starting to drive total prescriptions, which increased 11% to 131000, new prescriptions increased 32% for the third quarter over the second quarter moving.

Moving to the right hand side I would now like to view the performance drivers that resulted in our growth first in August we acted activated our sex care is health care consumer campaign to drive top of mind awareness of indexes. In addition, we continue to expand our writer base, resulting in approximately 14% increase.

And the average number of new prescriptions per prescriber.

Finally, net revenue per unit improved to $51. Our goal is to improve the gross in that front actually drink 2021, we have several key levers to drive that improvement in net revenue per unit, including the enhanced commercial coverage that we will receive in January and the changes to our co pay card and cash program.

Turning to slide 26. In addition in the fourth quarter and into 2021, we plan to continue to focus on expanding our consumer campaign and other initiatives on social media to generate awareness of indexing, we plan to deliver strong support on access messaging that reminds prescriber of our open.

In Africa and co pay support for patients. In addition, as stated exactly well gain preferred access and one of the top TV ends in January before we'll move to competitors, including Premarin currently at 17% total prescription market share.

I'd like to quickly touch on by Juba, turning to slide 27.

Even with our decision to de emphasize bite you, but with only seven sales representatives promoting but youve in the field, we continue to see growth in both interact and trx for the quarter at 59, and 15% respectively. We are continuing with this approach this quarter and anticipate continued modest upward trend for the fourth quarter.

Her during the third quarter net revenue per unit improved to $47 move.

Moving to slide 20.

I want to mention that we continue to monitor the environment for the category, including the National Academies Science Engineering and medicine that is referred to as the nation, let's call. It a report commissioned by the FDA on compounding practices, which articulates the need for increased regulation, we will continue to support our biotech customers.

Regardless of any changes no meetings have been scheduled yet around this topic by the F., yet I would now like to turn it over to Rob for closing remarks.

Thanks, Don.

Moving to slide 29.

We're very proud of the hard work and results our team delivered in Q3.

Record growth.

<unk> operating expenses improved payer coverage and reduced net loss by $19.3 million.

Looking ahead, assuming called it 19 does not disrupt our activists access to providers offices. We are currently on track to meet our $20 million Q4 revenue covenant taking.

Taking significant steps towards our goal of even a break even.

21 [noise] although.

Although it will not address or capital needs and we may need additional funding. We believe we have found they potentially significant source of non dilutive capital through the carve out a body care.

The simplicity and transparency the vidacare delivered can truly revolutionize prescription fulfillment and we will be excited to watch that process unfold.

In addition, one of the largest PV representing over 20% of the market or approximately 20% of the market will be excluded in fact, she didn't anniversary competitors from their formulary and providing a new opportunity to gain market share on January 1st.

Thank you all for joining the call today, well now open the call for questions.

[noise] as a reminder, actually a question. Please press Star then the number one on your telephone keypad again Thats star one to ask a question. Please.

Please stand by while we compile DNA roster.

Your first question comes from Annabel Samimy from Stifel. Your line.

Good morning, everyone. This is Nick rubino on for Annabel.

Congrats on the progress this quarter and thanks for taking the questions first can you. Please help us frame what might happen. If you missed any of the upcoming revenue requirements.

Would the remaining 50 million debt tranche come off the table or would there be a different type of change in your relationship with T. S. S. P.

And then secondly.

Based on your index your none of your commercial campaign launches over the summer how should we think about your upcoming inflections of the products and then with the reduced cash requirement to 45 million should we expect that you will be utilizing that cash to invest further in those campaigns. Thank you.

[noise], Yeah, Hey, Nick this is Rob Finizio and I'll I'll go back and forth with James circa our CFO here you know we're clearly on track for Q4 did hit our minimum revenue covenant or so were not concerned around that at all so we feel we feel.

The good there you know our goal is to get to EBITDA breakeven in Q4 of next year right.

So you know I think when you see our reduced the minimum cash on hand by our lender a that's a very co-operative statement by six street to give us a runway to get this non dilutive options.

Completed although you know I don't think that will be all the money, we need to get to profitability. It takes a massive trunk off the table right sorry.

I get what you're saying is a very co-operative wonder a great great results by our new CFO and a lot of the things our previous CFO did or to get our operating expenses down in a revenue way up.

So I feel good that we're on track we're on target and we're going to hit our goals and Uh huh.

Things look really good right. So the real wildcard here as you know have called it brings in another shutdown.

And delays things I never gonna have to cross that bridge and could do a little bit more money, but you know other than that I think we're in great shape.

I guess all your questions.

[music].

Yeah.

Yes, just in terms of like.

With.

Some of it in any given thing happening in terms of volume fluctuations and through the next year.

I guess, we're just.

Catastrophic Tonight.

No not really an issue at all.

Just what the possibility would look like is it is it just a renegotiation that you would be looking at with that with your partner with you know it obviously seems like they're definitely co-operative probably.

Yeah, they're <unk>, they're great lender, probably I mean look we're doing better if you track the 12 watches out since you know called and said.

We're doing as good as any of them right. So you know it's realistic lot net margins are nuts are incredibly strong our volumes incredibly strong.

We have a you know a great escalation starting on January 1st with one of the largest pbms and the country. We're not so concerned that our lender if you Miss by dollar would go Crazy I.

I think that's what you're asking I think a very reasonable.

Our lenders, though but that being said and I think we're in great shape and I think we'll deliver and were we don't believe if you Miss that to your point a revenue covenant because there was a covert shutdown. They would you know come in and try to grab the company, they're just not in that business, but but then again they are lender and you know they have all their rights.

Right Yeah, that's a that's perfect. Thank you.

The third I'll tell you it and not to try to plug for six street. They are very very reasonable very accommodating.

And you've seen how they work to go so far behind.

I would recommend Uh huh.

Your next.

Question comes from Louise Chen from Cantor Fitzgerald Your line.

Hi, Good morning, everyone. This is Harvey and for Louise today.

So couple of questions here, a one thing about kind of a budget.

In vaccine the target different age groups, so how much southern juries there between these products through your sales force marketing channels and secondly on second question here what is the optimal gross to nets target. We're kinda, though I don't know what is the strategy on getting to that level. Thank you so much.

You got it. Thank you so I'll take a little bit and I'll hand, it off to dawn, our chief commercial officer.

So.

You're right. So what basically you have here are obese that our young in their career and they're delivering a lot of babies into it a ton of contraception and then as they get older than her career, they usually lean towards the view I am sorry for them to wake up in ours is a nice they don't have a liability for delivering babies, but the beauty of what we're doing.

These are all in the same office right. The 20000 obesity when targets that we have for Anna Vera which over 60% of the prescriptions. We can reach with our current sales force right. We don't need any additional people to get to them not that this is the largest prescription category in women's health I believe over 6 billion.

Dollars a year in sales.

So to.

To answer your question, there's a lot of scale of efficiency and we are at the right number to get to those top 20000 targets from a headcount standpoint in our side. So we don't see any growth needed on salesforce with the current product portfolio that we have from.

From a gross to nets standpoint, but yes, that's a good one so we feel very good of what we put out going.

Going forward.

Into 2021, a that we would be somewhere between where we are today and $1200 a the reduced to $1200 and that would be again, where by the way were above what we had forecasted I believe 13 39 for the quarter came in a good bit above but nonetheless, when the government does.

Open up the military we are the only long acting product on the military is deployment formulary, which is brand new so think about it if you're being deployed unfortunately overseas and your woman or if you had never end you'd have to be keep it in a refrigerator that's not going to work in the middle east or on a boat right and putting the captains refrigerator, if you're being deployed wasn't.

Oral contraceptive, which are the other options on the deployment formulary and this is over a billion dollar opportunity for us or you're not going to get 12 packages of birth control pills. They simply just don't even dispense it that way. So you. The interferes with was put there I think those are great, but the problem is and although we're hitting our numbers in the military and public health side. Most of these plays.

This is our open yet due to cold, it's because we're trying to protect the soldiers and have less people on base. So we are selling through there we are hitting our numbers, but I think you're going to see significant growth. Once we can get on basis and then on the same side and public health planned Parenthood universities, they're not into letting reps come in like they used to but as cold it lifts and as you heard.

Today, the great news from Pfizer I think that's going to be a massive area growth. Then that's what the government are lower than what we're seeing on the commercial side. So it could pull it down a $100 or so with some good volume, but was that does go down that means our volume is way way up a and it's great news and we don't see it going anything lower than what I just talked.

About.

And the next year.

Yeah on anything that's yeah, just I'll go back to the sales force side and I think Ravi said it well what I would add is that the top prescribers across the category of overlap greatly and so as Rob said, we're able to hit those 20000 targets very efficiently. The other piece of information that I think gives view with actual results is just that what we see is a math.

Of overlap in our writers across product categories, which sort of is the proof is in the putting that you know we're going after the right targets and have sufficient for us.

Thanks for the questions Carty and by the way, we do see a great appreciation next year or four in fact see and by Geo, but the menopause portfolio.

From an EPS standpoint as well.

Okay got it thank you so much.

You got it thanks for the question.

[noise]. Your next question comes from Stacy.

Cowen and company your line is open.

Good morning, Thanks for taking my questions and congrats on the quarter I'm still feeling [laughter] Vera that's the problem. So first I can you provide an update on the current type of headwinds in terms of office volumes. I think previously you had said it's around 50% or so and then what's the breakdown in another scripts that are.

I'm telemedicine grocers lets clinic visits which segment is growing at a faster I have a follow up question.

Sure.

So if.

If you refer to our slide.

Hmm.

15, we didn't want to put this up for people to look at and station glad you brought this up.

So you can see on slide 15, you know we are significantly below.

The access we had what does that just mean typically any year, 10% to 15% of women will be open to switching contraception.

We believe that number's down through our research shows you know to 4% or so why is that because they have to go to the doctor furniture them enough to be open to it and a lot of women, although the prescription volumes looks like the news are continuing a doctor just calling it a new prescription for what they were already on and they're not going into the office or doing a telemedicine does it.

On the call him until covered lives. Additionally, doctors are limiting reps that can come in art typically when we hear our reps are out there.

But the good news is we're way off of the lows that we were back in May I have kind of bottomed in may at that point and in spite of all these headwinds we are putting up record numbers right and the way. We're doing that is we've kinda reinvented the way, we're doing speaker programs educating doctors using soon a remote price.

This is and we feel good that unless there is a significant shutdown or headwind with coated Oh will continue we're definitely on track for the quarter. A in we can we can touch on that if you want and additionally around the symphony tracking or where we are with that so with that being said on tele medicine.

I'm going to turn it over to Dawn told medicines, approximately I believe 18% to 22% of our overall revenue and it is growing I don't.

So I can just add a couple of things to add back on their side. So what you're looking at here on the slide is actually a reach and frequency reach being the amount of doctors you can get to that's our breath frequency being the number of times you can see them. So back to your question about cobot headwinds the headwinds outside of the switching behavior with a number of switches down for patients that.

That we're seeing is our ability to get in front of doctors at least a full prescriber base. The good news is that where we can get and we're saying we can get in that we're a little less impacted on frequency. How we are solving for that is a what I talked about earlier in terms of anything we can do virtually as well as all the medical life.

[noise] occasion that we're pushing on and then in terms of growth. The majority of what we have put up friend of era has been through the sales force and I'm sure they're doing a great job. Despite the headwinds that are in front of them as Rob said telemedicine is providing a significant percentage about 20% of our volume and we.

I would expect that to continue to grow depending on.

Yeah.

That's really helpful. And then actually on that Symphony I think you had commented on that on an appendix that the menopause products are consistently understated and should we be thinking about that as the same brand of their volume or is there going to be a lot of quarter to quarter variability.

What will happen to walk you through a what slide numbers 32. If you can go to slide 32, we put a slide out in the appendix or just to help give some clarity as best we can run this covenants.

Thank you for that question to start with.

Currently out of their represents only one 100%.

Although we see birth control reported by Symphony, So very small fraction of what they see.

And understanding symphony projection methodology in combination and it varies volume and the delivery of our channels. We go through the telemedicine and military and the like.

We believe there's under reporting as a guide when we look at the met a pause products historically the volumes have been under reported by an average of 10% to 15%. So we believe that's a good guide going forward.

Well you can count on the Symphony trends are accurately reflecting what is happening with ourselves which is they are increasing week over week in October and that we are on track to meet our fourth wearables.

So what's in particular 20 million revenue covenant.

Got it and just to also clarify.

Yeah, just just to clarify that on the 10% under reporting your thing as a good guide going forward for another as well.

Just confirm that if we took out yeah, we really think so and the trends are consistent and it's so small I mean think about the volume of in a very it's one 100th of a percent of what they track. So if we're off by 50 or were off by 300, its massive to us for 300, right and it's just a rounding rounding.

Sure Eric for the folks like Symphony, but their trends are definitely in line and we're doing pretty well done pretty well [noise].

Thank you so much thanks guys.

Great first question Stacy Thank you.

Your next question comes from Douglas Tsao from H.C. Wainwright Your line.

Hi, Good morning couple of questions for me first in terms of an Anda there're obviously, we got some really great momentum for that product just curious.

When we think about the progression from here is there sort of any seasonality that we should be considering when we model, especially as we look to the first quarter of 21 I know, there's so many dynamics and it gets particularly tricky when a product is this sort of going through this sort of early growth phase, but you know just as we think.

Reimbursement co pays et cetera, you could do we do we typically think about that first quarter, maybe dean you know sort of a step back or flat relative to what we seem to be on track for for the fourth quarter and then just in terms of bonds actually you know it seems like reimbursement on the part D side is still sort of get a little.

More challenging than than what we hope for just how close are you to making sort of tactical decisions in terms of the co pay cards et cetera, just to proactively sort of increase that the that the gross to nets for that product. Thank you.

Dodd Frank.

Good questions I'm going to pass around here, but is you since you brought up seasonality and birth control. If you go back to 19 and 20 September was way down over August compared to August.

So you know that that is a good friend and you know it's it's on the way up it's really a factor of back to school Oh, Yeah, we call. It the back to school yeah, the back to school transfer to point towards.

So from going into Q1 of next year. So.

So it's going to be.

We think pretty good for enough era, and let me tell you why because of the state laws that we have in place today and because of the federal laws and now we're up to 28 states that have and do you see.

That have state laws on the books, if there is a co pay a with a payer a letter of medical necessity for even high deductible plans that could have a 2000 dollar which is a whack price what would eliminate that and most state and federally. So so as you look back to our nets, which aren't.

I believe in Q1 were in the high 13, hundreds approximately an hour in Q3 were 13 39, it could step back a little bit I think the bigger thing that would pull it back is a if the government gets going as.

As well as this large PBM contract with a no law there excluding no longer covering Nuvaring I know, we're a long acting product in very different but but we would be the only branded ring agent on their formulary nuts.

Approximately 20% of the entire population of the U.S. So that is a strong catalyst, it's probably stronger firms actually there because they were so happy with premarin I'll see you know, it's one of their biggest ones in a row says you string.

So I think you'll see a bigger lift there on him back see so as well to kind of dovetail into youre not [laughter], yeah industries that she's good let me turn it over to dawn second, but but we do now have the visibility and it will be a lot better next year and we expect it to strengthen in Q4.

We think our average will be a a good bit higher than it is this year on anything that I think the only think that out. If your question was as you know are we being proactive and I think the two things. We can point to one is the preferred coverage that we talked about with the PBM again, it I don't want to under represent a significant.

You know all the other competitors in Funing prime when a loan being 17% being removed its a really nice way to sell the product and should improve and that's because of the reduction in co pay a the second question. You ask is around you know our co pay card program and we're absolutely looking at a shift in January as our coverage gets better.

It's time Maximise question actually we are being proactive about that.

It's a cover Doug.

Yeah. That's it thank you so much.

Right. Thank you.

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Your next question comes from Dana Flanders from Guggenheim. Your line is open.

Oh, great. Thank you very much for the question I, just actually had a follow up on.

The pay or PBM strategy, and then you just talked a little bit about you know the the opportunity you have getting preferred status. Just wondering if that's a shift in strategy for you and would you expect potentially more of that.

Going forward and then you know kind of what is what's the level of market share. You think you can get those plans.

And then just a second quick follow up can you just give us the refill rate for actually this quarter. Thanks.

So I'll start with I touched on I'll start with a pair PBM strategies. So I think the first thing I want to say is that you know we look at every payer and PBM differently and so we look at each individual. So this is not an indicator of every single one going over.

<unk> preferred we knew that this TV and this would be fruitful for us, but really what what you should take away is that our entire approach from the beginning about making sure that we made this affordable for patients and driving market share gave us the opportunity to get to preferred.

Over the other products and so.

Really big win for us that really dovetailed with the strategy, we had from the beginning but as far as going to preferred for the rats. That's not an overall approach we'll look at it a payer by payer.

They tend to be the PV I just want to go where the growth is and the growth from its actually you know grabbing 12%, albeit at low net margins here, here's where the story changes right because they're not going to go to a shrinking product they're going to go to a growing product because that's the one product all their patients will be covered for so.

They did on points of market share potential here a significant it's actually we're always out there pushing in the past now how TV ads at the pharmacy level pulling for us pulling Scripps then and we're hitting our biggest branded competitor right between the eyes with the you know one of the largest pbms at 20%.

And actually I'm glad you brought that up no. One asked that's very important we were at 6.5 fills per patient.

Average so it is a really strong number and that and that's again that's why they made these decisions right. We're growing it's the one branded agents are going to have going forward, which is a change or.

And people are staying on product and they like it. So the strategy that we had with a low out of pocket cost to launch even not enough for a low is really paying off here and you can see it because if we didn't have the growth. We wouldn't have these contracts are in there could be more in the future.

Great Thanks, and congrats on all the progress.

Thank you. Thank you.

There's no question this.

Thank you operator, thank you everyone for the questions today, and I want to thank the TX MD team for a fantastic quarter and all the hard work to get the expenses down in the revenue up and we will continue to deliver thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

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