Q3 2020 Agile Therapeutics Inc Earnings Call

[music].

Good afternoon, and welcome to the agile Therapeutics third quarter 2020 financial results Conference call.

Operator: Good afternoon, and welcome to the Agile Therapeutics Third Quarter 2020 Financial Results Conference Call. Please note, today's event is being recorded. At this time, all participants are in a listen-only mode.

Please note today's event is being recorded.

At this time all participants are in a listen only mode.

Brief question answer session will follow the formal presentation.

Operator: A brief question and answer session will follow the formal presentation. If anyone should require operator or technical assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the conference over to Matt Riley, Head of Investor Relations. Hello, everyone, and welcome to today's conference call to discuss our third quarter 2020 financial results. Hello, everyone, and welcome to today's conference call to discuss our third quarter 2020 financial, Before we start, let me remind you that today's call will include forward-looking statements based on current expectations, including statements considering our outlook for the fourth quarter and full year 2020, management's expectations for our future financial and operational performance, our business strategy and commercialization timeline, our assessment of the combined hormonal contraceptive market, and the potential market share for TORA, among other statements regarding our plans, prospects, and expectations.

If anyone should require operator or technical assistance during the conference. Please press star zero on your telephone keypad.

I would now like to turn the conference over to Matt Riley head of Investor.

<unk> relations.

Hello, everyone and welcome to today's conference call to discuss our third quarter 2020 financial results before we start let me remind you that today's call will include forward looking statements based on current expectations, including statements concerning our outlook for the fourth quarter and full year 2000.

I'm 20 management's expectations for our future financial and operational performance, our business strategy and commercialization timeline, our assessment of the combined hormonal contraceptive market and the potential market share for Twirla among.

Other statements regarding our plans prospects expectations such statements represent our judgment as of today.

Operator: Such statements represent our judgments as of today, are not promises or guarantees, and may involve risks and uncertainties that may cause actual results to differ from the results discussed in the four-dokey statement. Please refer to our SEC filings, which are available through the investor relations section of our website, for information concerning risk factors that may affect the company. We undertake no obligation to update forward-looking statements except as required by law.

Or not promises or guarantees and they involve risks and uncertainties that may cause actual results to differ from the results discussed in the forward looking statements.

Please refer to our filings with the FCC, which are available through the Investor Relations section of our website for information concerning risk factors that may affect the company. We undertake no obligation to update forward looking.

These statements except as required by law the.

The information on todays call is not intended for promotional purposes and not sufficient for prescribing decisions. Joining me on todays car out Tomorrow, agile Therapeutics, Chairman and Chief Executive Officer, and Dennis Wright, Chief Financial Officer.

Matthew Riley: The information on today's call is not intended for promotional purposes and is not sufficient for prescribing. Joining me on today's call are Al Altomari, Agile Therapeutics Chairman and Chief Executive Officer, and Dennis Riley, Chief Financial Officer. Following our prepared remarks, we'll open the call to your questions. Let me now turn the call over to you, Matt.

Following our prepared remarks, we'll open the call to your questions. Let me now turn the call over it out.

Thank you, Matt Good afternoon, and welcome everyone to <unk> third quarter 2020 conference call. We're.

Alfred F. Altomari: Good afternoon, and welcome everyone to our third quarter 2020 conference. We're pleased to report that we remain on track to launch Twirla, our first FDA-approved product, which is a once-a-week hormonal contraceptive pad. During the third quarter of 2020, we delivered on several key stated objectives. According to our planned timeline, that brings us closer to this exciting moment in Agile's history. We trained and deployed our sales force, executed on our manufacturing, and progressed on our managed care opportunity, all by controlling our spending prudently. We've said all along that the launch of Twirla would happen in the fourth quarter of 2020, and today we're excited to report that we remain on track. Thanks to the hard work and dedication of our talented leadership team and partners, we expect to launch Twirla by the end of this year.

We're pleased to report that we remain on track to launch our first half due to improved product, which is a once a week promotional contraceptive patch.

During the third quarter of 2020, we delivered on site.

Key stated objectives. According to our plan timeline that brings us closer to this exciting moment and Agiles history.

We trained and deployed our salesforce executed on our manufacturing plan and progressed on our managed care opportunities.

All while controlling our spend.

Spending prudently we've.

We've said all along that the launch of Twirla would happen in the fourth quarter of 2020 and today. We're excited to report that we remain on track. Thanks to the hard work and dedication of our talented leadership team and partners. We expect launched Twirla by the end of this year, we look.

For this important milestone and to providing women with new contraceptive choice that fit their lifestyles for.

Alfred F. Altomari: We look forward to this important milestone and to providing women with new contraceptive choices that fit their lifestyle. For the whole team, achieving this launch of Twirlo while working from home since March will be a remarkable accomplishment that cannot be understated. Now on to a review of the third quarter in greater detail, starting with manufacturing. After completing production of the pre-validation batch of Toralea, we initiated and remain on track to finalize the three validation batches that we expect will produce product to support our commercial launch. All three of these badges are expected to be released for commercial use by the end of this year.

Our whole team achieving this launch.

Twirla, while working from home since March will be a remarkable accomplishment that cannot be understated.

Now onto an overview of.

Our quarter in greater detail starting with manufacturing.

After completing production of of the pre validation batch of Twirla, we initiated we initiated and remain on track to finalize the three validation batches that we expect will produce product to support our commercial launch all.

All three of these.

Patents are expected to be released for commercial use by the end of this year.

We are pleased with the progress we've made on the manufacturing front and appreciate the continued support of our partner Corium.

Alfred F. Altomari: We are pleased with the progress we've made on the manufacturing front and appreciate the continued support of our partner, Corium, as announced at our Investors Day in September. We continue to build our distribution network by contracting with a third of the three major U.S. wholesalers, as well as the number of regional wholesalers. We believe we're installing a supply chain infrastructure that can efficiently support the commercialization of twirlers. Now, an update on our management team and our sales. We expanded the depth of our leadership team with the appointment of Dr. Paul Korner as our Chief Medical Officer. Corner is a board-certified OB-GYN with 20 years of experience in the biotech and pharmaceutical space, including significant experience in women's health.

As announced at our investors day in September we continue to build our distribution network by contracting.

For the third of the three major us wholesalers as well as a number of the sales of the regional wholesalers.

We believe we are installing a supply chain infrastructure that can efficiently support the commercialization of Twirla.

Turning to an update on our management team and our sales force we expand.

With the depth of our leadership team with the appointment of Dr., Paul corner, as our Chief Medical Officer.

Dr corner as a board certified over to win with 20 years of experience in the biotech and pharmaceutical sales but.

We'll space, including significant experience with women's health care.

Alfred F. Altomari: We are excited to bring his wealth of knowledge and experience to the team in supporting the commercial launch of Twirling. Thoughts O'Corner will also support our efforts in evaluating our existing pipeline. Prioritizing our product candidates while considering the development costs and the patent life of the product, and to help us explore possible expansion through business development activities. Our strong contract sales force is now out in the field, educating healthcare providers or HCPs, and Raising Awareness in the Marketplace, a team of eight regional sales specialists and 65 reps. He completed an eight-week training program.

And we are excited to bring his wealth of knowledge and experience to the team and supporting the commercial launch of Twirla.

Softer corner, we're also support our efforts in evaluating our existing pipeline prioritizing our product candidates, while considering the development costs and the patent life and help us ex.

Lower possible expansion through business development activities.

Our strong contract sales force is now out in the field educating healthcare providers or a cps and raising awareness in the marketplace. The team of eight regional sales specialist and 65 reps complete.

Excluding an eight week training program.

Our sales reps spend in the field since about mid October conditioning, the market and we are expected to make over 10000 plus calls before we launched twirla.

Alfred F. Altomari: Our sales rep's been in the field since about mid-October, conditioning the market, and we're expected to make over 10,000-plus calls before we launch Twirl. We're using insights from our data-driven approach to target the highest volume practice. This proactive outreach, from what we consider to be a best-in-class sales force for women's health, helps us to ensure that prescribers will have heightened awareness of Twirla at the time we actually launch the product. We continue to make significant progress engaging with third-party payers regarding coverage and reimbursement for TORLA during the third quarter. We are committed to working to minimize access barriers for patients and provide providers with the goal of obtaining rapid formulary positions at zero co-pay for their patients. We are currently negotiating with all key Pharmacy Benefit Managers, or PBMs, and their representative health plans to secure rapid formulary review.

We're using insights from our data driven approach to target the highest volume practices. This pro.

Fleet of outreach from what we consider to be a best in class Salesforce for women's health helps us to ensure that prescribers will have heightened awareness of twirla at the time, we actually launched a product.

We continue to make significant progress engaging with third party payers regarding coverage and reimbursement for.

For Twirla during the third quarter, we are committed to having two to working to minimize access barriers for patients and provide providers with a goal of attaining rapid formulary positions at zero co pay for their patients.

We are currently negotiating with all key pharmacy.

To see benefit managers or pbms.

And their representative health plans to secure rapid formulary reviews.

At our Investor Analyst Day, we indicated that we were targeting approximately 40% to 50% formulary access at the time of launch Eminem.

Alfred F. Altomari: At our Investor Analyst Day, we indicated that we were targeting approximately 40 to 50% formulary access at the time of launch. I'm pleased to say that we've already achieved 40% to date. This includes one of the major three PBMs with several of the smaller plans.

Im pleased this.

Hi that we've already achieved 40% to date.

This includes one of the major three ppms with several of the smaller plans.

We continue to target, 85% formulary access by the end of 2000 2021 on.

Alfred F. Altomari: We continue to target 85% formulary access by the end of 2020-21, and along with the goal of gaining formulary access at zero co-pays for individuals to use Swirlip. Beginning at launch, we will have a full month of samples for eligible prescribers to provide to appropriate patients. The availability of samples will give HCPs a way to immediately start patients on Twirlift until they can fill their first prescription at retail.

And along with the goal of gaining formulary access at zero copay.

Sales for individuals to use swirling beginning at launch we will have a full month sample package for eligible prescribers to provide to appropriate patients.

The availability of samples will give eight cps awaits immediately start patients on swirling until they can fill their first prescription.

Paid at retail.

In terms of our customer engagement strategy.

Alfred F. Altomari: In terms of our customer engagement strategy, we're adapting to this unique environment presented by COVID-19 to meet the needs of our customers. As Amy Welsh, our VP of Marketing, highlighted at Analyst Day, our pre-launch strategy is aimed at building awareness of the contraceptive landscape and tapping into patient demand for new contraceptive treatments. In just over two months since the launch, we're slightly more than half way to our goal, and our website, BirthControlDoneMyWay.com, is already outperforming our engagement goals. Nearly 80% of the site traffic is engaging with the content centering on women discovering more about their birth control options.

We are we're dabbling through this unique environment, but presented to buy COVID-19 to meet the needs of our customers as Amy Walsh, our VP of marketing highlighted at the analyst day, our pre launch strategy is aimed at building hi.

And in fairness of the contraceptive land landscape and tapping into patient demand for new contraceptive choices.

And just over two months since launch were slightly more than half enabled in the campaign of the unbranded and our website birth control done my way dotcom is already out.

Reforming our engagement goals nearly 80% of the site traffic is engaging with the content centering on women discovering more about their birth control options.

This aligns them with this aligns with what we learned in market research that patients want to be engaged and to take an active part.

Alfred F. Altomari: This aligns with what we learned in market research, that patients want to be engaged and to take an active part of their contraceptive decision-making process. Our unbranded ad campaign is intended to heighten pent-up demand, with patients primed to rethink their birth control options. We are approaching the ACPs with this objective of augmenting, from the physician side, the decision-making process that happens in the office with patients, OB-GYNs, and their nurses. We will continue to broaden our marketing by leveraging this momentum of the Unbranded campaign. We're supporting the lifestyles of women and making it easy for them to access, afford, and stick with us. Most importantly, in the event a customer loses a patch, our Patch Relationship Program is our commitment to women to serve their active and busy lifestyles.

Of their contraceptive decision making process.

Our unbranded AD campaign is intended to heighten pent up demand.

Patients prime to rethink their birth control options, we are approaching the Cps with this objective of augmenting from the physician side that decision making process.

That happens in the office with patients, which lands and their nurses, we will continuing to broaden our marketing by leveraging this momentum of the unbranded campaign.

We're supporting the lifestyles of women and making easy from the access afford and stay on Twirla mode.

Most importantly in.

In the event of customer lose the patch our past relation program is our commitment to women to serve their active and busy lifestyles.

We're pleased to announce that this program is fully ready and prepared to be operational at the time of launch.

Matthew Riley: We're pleased to announce that this program is fully ready and prepared to be operational at the time of launch. I will now turn the call over to Dennis Riley, who will provide you with an overview of our financial results for the third quarter of 2020 and an update on guidance. Thank you, Al. And thank you to everyone listening today.

I will now turn the call over Dennis Riley, who will provide you with an overview of.

Our financial results for the third quarter of 2020, and an update on guidance.

Thank you al and thank you to everyone listening today.

Before I summarize our third quarter 2020 financial results I'd like to AG Echo ALS earlier comments about the great. We do great work our team has done.

Matthew Riley: Before I summarize our third quarter 2020 financial results, I'd like to echo Al's earlier comments about the great work our team has done as we get closer to bringing Twirl to the market. Now on to the results for the quarter. For the third quarter of 2020, our R&D expenses were approximately $3.7 million, compared to 2.4 million in the same quarter a year ago.

Don as we get closer in bringing Twirla the market.

Now on to the results for the quarter for the third quarter of 2020, our R&D expenses were approximately $3.7 million compared to $2.4 million in the same quarter a year ago.

The increase in R&D.

Matthew Riley: The increase in R&D was primarily attributable to the cost of Conducting Validation Work for the Commercial Manufacturing of Aquila by Quorium, our contract manufacturer. As a reminder, all pre-validation and validation batch costs were expensed through R&D. GNA expenses totaled $11 million in the third quarter of 2020 compared to $2.1 million in the same period a year ago.

It was primarily attributable to the cost to conduct validation work for the commercial manufacturing of coral up by Corium, our contract manufacturer as a reminder, all pre validation and validation batch costs were expensed through R&D.

Gionee expenses total.

$11 million in the third quarter of 2020, compared to 2 million $2.1 million in the same period a year ago.

This increase in Gionee was due to primarily pre commercialization activities for twirla, such as brand building advocacy and market research.

Matthew Riley: This increase in GNA was due to primarily pre-commercialization activities for Twirla, such as brand building, advocacy, and market research. G&A expenses also increased due to activities related to building out our commercial organization, which included an increase in headcount, professional fees, and stock compensation expense. We anticipate that our G&A will increase in the future with the commercialization of Twila as we continue to grow our business. These expenses will likely include increased selling and marketing costs, including payroll and operating costs related to the commercial launch of Twirla, legal, and accounting services, and other costs as expected as we grow the business. The net loss in the third quarter of 2020 was $15.5 million, or $0.18 per share, compared to $4.4 million, or $0.08 per share, in the third quarter of 2019.

Gionee expenses all.

Also increased due to activities related to building out our commercial organization would in which included an increase in headcount professional fees and stock compensation expense, we anticipate that our G.A. will increase in the future with the commercialization of Twirla as we continue to grow our business.

These expenses will likely include increased selling and marketing cost, including payroll and operating costs related to the commercial launch of Twirla legal and accounting services and other costs as we act as expected as we grow the business.

Net loss in the third quarter of 2020.

One was $15.5 million or 18 cents per share.

Compared to $4.4 million or eight cents per share in the third quarter of 2019.

We ended September Thirtyth, 2020, with cash cash equivalents and marketable securities of 70.

Matthew Riley: We ended September 30, 2020 with cash equivalents and marketable securities of $71.9 million compared to $34.5 million of cash and cash equivalents as of December 31, 2019. Turning now to our financial guidance for the fourth quarter and full year 2020, gross revenue in the fourth quarter, reflecting this initial stocking of Twirla by the wholesalers, is expected to be approximately $1 million. We continue to manage our costs well and have lowered the high end of our operating guidance range for the full year by $2 million. We're now expecting expenses to be in the range of $52 to $54 million for the year, with G&A again accounting for about 70% of this spending as we build out our commercial infrastructure. We're making a slight revision to the bottom end of our non-cash stock compensation expense guidance, which is included in G&A expense now in the range of $2.7 to $3. Based on our current business plan and our ability to launch Twirla, we believe that our current cash, cash equivalents, and marketable securities as of September 30, will be sufficient to meet our projected operating requirements through the end of 2021. With that, we're happy to take Operator, you may now open up the line for Q&A. Ladies and gentlemen, we will now have our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate that your line is in the question queue.

The $1.9 million compared to $34.5 billion of cash and cash equivalents as of December 31 2019.

Turning now to our financial guidance for the fourth quarter and full year 2020 gross revenue in the fourth quarter, reflecting this in.

Initial stocking of Twirla by the wholesalers is expected to be approximately $1 million, we continue to manage our costs well and have lowered the high end of our operating guidance range for the full year by $2 million were now expecting expenses to be in the range of 52 to five.

The $4 million for the year with GNSS again accounting for about 70% of this spending as we build out our commercial infrastructure.

We are making a slight revision to the bottom end of our noncash stock compensation expense guidance, which is included in DNA expense now in the range of 2.7 to three.

Yes.

Based on our current business plan and our ability to launch Twirla, we believe that our current cash cash equivalents and marketable securities as of September Thirtyth will be sufficient to meet our projected operating requirements through the end of 2021.

With that we're happy to take your questions. Operator, you May now open up the line for Q and a.

Ladies and gentlemen, we will now have our question and answer session.

If you would like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate.

That your line is in the question queue.

For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys.

Operator: For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment, please, while we now poll for questions. Our first question comes from Randall Spanicki with RBC Capital Markets. Please proceed with your question.

One moment, please while we now poll for questions.

Our first question comes from Randall Stanicky with RBC capital markets. Please proceed proceed with your question.

Great. Thanks, well couple of questions for you first how do you think about launching.

Alfred F. Altomari: Al, a couple of questions for you. First, how do you think about launching with another recent new launch in the marketplace? And is there anything that you've seen or heard thus far from that launch that gives you any learnings that you can apply to your launch?

With another new.

Recent launch in the marketplace and is there anything that you've seen or heard.

Thus far from that launch that.

Gives you any learnings that you can apply to your launch so thats. The first question.

Alfred F. Altomari: So that's the first question. And then secondly, as you continue to look at the marketplace, continue to do market research, where do you think that Twirl is going to pull from? I think we can all look at Zulane and see that as an obvious opportunity.

And then secondly, as you continue to look at the marketplace continue to do market research, where do you think that that total is going to pull from I think we can all look at PSU Lane and looked at that as.

The obvious opportunity when you think about the other share grabber share opportunity, which areas are you thinking is going to be most likely in the early part of the launch thanks.

Alfred F. Altomari: But when you think about the other share grabs or share opportunities, which areas are you thinking are going to be most likely in the early part of the launch? Thanks. Great. Thanks, Randall. And I just want to let the listeners know, Dr. Korner is also with us if there are any questions. So, well, Randall, your two questions, number one, you know, the launch dynamics of another contraceptive and where are we gonna get our share from? So, let me take the first one.

Great. Thanks, Randall and I just want let the listeners know dr. quarters also with as the thick if there's any questions. So while certainly.

Two questions number one you know the launch dynamics of another contraceptive in where we are going to get share from so let me take the first one.

Yes, I mean, we have we have good intelligence is now Randy we have reps in the field. We have 73 people in the field, we have eyes and ears out there and I think first and foremost that I.

Alfred F. Altomari: Yeah, I mean, we have good intelligence. Now, we have, you know, reps in the field; we have 73 people in the field; we have eyes and ears out there. And I think first and foremost, you know, that I think the authors are pretty excited right now, OB-GYNs, for the first time in a number of years to have new contraceptive options being presented. You know, there's been really three or four of them in the last couple of years, and hopefully, we'll include ourselves. So I think there's a heightened excitement, I would say, by the prescribers. I think that's not net helpful to us. They're excited that there are new options.

I think the offers are pretty excited.

Right now with your lands to me for the first time in a number of years have new contraceptive options being presented to him.

There has been really three or four of them in the last couple of years.

Hopefully, including ourselves so I think theres, our heightened excitement I would say by the by the prescribers I think thats that helpful to us.

Good are excited that Theres new options.

Theres excited that that companies are really stepping forward and doing research for them. So.

Alfred F. Altomari: They're excited that, you know, companies are really stepping forward and doing research for them. So we think it's a net positive for the category. You know, we compete with the most recent launches in a different category than us. It's a non-hormonal side.

We think it's net positive for the category. We we compete at the most recent launches in a different category than us that's a non hormonal side. So we see.

Alfred F. Altomari: So we see our, you know, segment as being the hormonal side. I think that's really important, you know, for us that, you know, we position the product in that segment, if you will. Lessons learned from what I've seen so far. Yeah, I mean, that's an interesting one. I would say, number one.

There are no segment as being the hormonal side, I think thats and Thats really important for us that.

We positioned the product.

Thats segment, if you will.

Lessons learned from what I've seen so far gamut.

Yes, that's an interesting one I.

I would say number one.

There's still confusion about the affordable care Act.

Alfred F. Altomari: There's still confusion about the Affordable Care Act. There are a lot of misinterpretations of what the act is, so I think that presents an opportunity for us. I think doctors aren't as aware in some states, where there are state mandates, that that's available to them. So I think that, again, is an opportunity for us.

There's a lot of misinterpretations of what the act is so I think that there's that presents an opportunity for us.

I think doctors aren't is aware in some states, where there's state mandates that that's available to them. So I think that again as an opportunity for us.

Yes, there is a lot of you know I think the other thing we've learned and at least for us. So far we had planned on a lot of our face to face calls to.

Alfred F. Altomari: I think the other thing we've learned, at least for us so far, we had planned on a lot of our face-to-face calls being around the national average, if you will. You know, we thought nationally, but when we look at data, you know, approximately 60% of Randall are face-to-face right now, depending on where COVID's at. We're well over 80%, you know, for the first number of weeks we've been out there since mid-October, so I would say that's a pleasant surprise for us. The other thing is that women are engaged.

To be around the National average if you will we thought nationally when we look at data.

Approximately 60% Randall our face to face right now depending on where cope with that.

So we're well over 80% for.

For the first.

Number weeks, we've been out there since mid October so thats, a I would say that's a pleasant surprise for us.

The other thing is that women are engaged I think we see that in the other launches to consumers. So we see it in our activity on our web site. There is a level engagement that.

Alfred F. Altomari: I think we see that in the other launches, the consumers, and in our activity on our website. There's a level of engagement that seems to indicate the market's excited about this, even on the patient side. So that's what we can glean out so far, still relatively early days; where are we going to get the share from? So that's, you know, I'll put it in two boxes. I think if it was a new patient, you know, come in nave to therapy. More than likely, she was heading for a pill; that patient statistically was heading to be on birth control.

Sales, which seems to indicate the markets are excited about this even on the patient side. So that's what we can glean out so far still relatively early days.

Where we're going to share from so thats now I'll put it in two buckets I think it was a new patient.

Command naive to therapy.

More than likely.

She was heading for a pill, we believe that patient statistically was heading to be on a birth control pill. So if we're fortunate enough to get a shot of that patient.

Alfred F. Altomari: So, if we're fortunate enough to get a shot at that patient... We're taking the share away. You know, that's still the leading method in our If it's an existing user, I mean, you're right, we would expect some share to come from the other patch. But we would expect to take share, you know, from the pills, you know, there again. A woman who's chosen, or more research would say a woman who's chosen to be on an IUD, for instance, is not our patient.

We're taking share away from a pill thats still the leading method in that in our space.

If it's an existing user I mean, you're right we would expect.

Mike Rahm share to come from the other patch.

But we do expect to take share from the bills there again.

A woman who is chosen our market research with sales limited chosen to be on an I'd for instance is not our patients. So the bulk of the business. If we're successful on a comment patients that either are on a pill.

Alfred F. Altomari: So the bulk of the business, if we're successful, is going to come from patients that either are on a pill, or we're heading to be on one. And that's what we hear even right now from doctors. We hear that in our market research. So if we're going to be successful, it's going to be a pill user, either de novo or somebody that's already on the market. Hey, Al, can I ask you a follow-up question? As you look at the launch, I mean, the point you made is correct.

Wire or we're heading to be on a pill and thats, what we hearing right now from doctors.

We hear that in our market research. So we are going to be successful, it's going to be a pill user either de novo for somebody's already on a pill hey.

Hey, how can I ask a follow up as you look at the launch I mean, the point you made its correct we haven't seen very many.

Alfred F. Altomari: We haven't seen very many women's health launches in the last several years, and we're in a pandemic right now. So as you look at your 65 reps and your commercial plan, are you expecting to get greater provider touches given the tele-detailing aspect of this than you would normally get from a, you know, kind of an in-person, non-COVID environment? Yeah, and that's already planned out for handling.

On the men's health launches in the last.

Several years and bring a pandemic right now so as you look at your 65 reps and.

You look at your commercial plan are you expecting to get.

Greater.

That's provider touches give.

Given the tele detailing aspect of this than you would normally get.

From a kind of in person Noncovered environment, Yes, Thats already played out for handling we have 65 office based reps thats our footprint that are trained to pivot either from a face to face color telemarketing and the eight other reps. We've mentioned are that they're really specialists are in effect Hell tell detailed reps are.

Alfred F. Altomari: We have 65 office-based reps, you know; that's our footprint that are trained to pivot either from a face-to-face call or telemarketing. And the eight other reps we've mentioned are, you know, they're really specialists that are, in effect, tele-detail reps, our telemarketing reps that work for our individual sales managers. So what we're finding is that on a teledetail, we can cover a lot of space pretty quickly, so meaning that they could be really productive. So when you sprinkle in our telemarketing or tele-detail capabilities along with our face-to-face, it's pretty remarkable. You're right. I guess if there is a shining lining in this, we, on a rep, per capita rep basis, can be more productive.

Telemarketing reps that some work for our individual sales managers. So what we're finding is that on a tablet detail. We can we can cover a lot of space pretty quickly so meaning that they could be really productive. So when you sprinkle in that our telemarketing mortality detailed capabilities along with our face to face.

Outs pretty remarkable you're right I mean, the theme I guess, if there is a shining lining in this week on our Rep per capita rep basis, we can be more productive and since we are targeting group practices. Randall we are even more productive so a rep going in and either on a face to face the launch or tele detailed content.

Alfred F. Altomari: And since we're targeting group practices, Randall, we're even more so. So a rep going in either on a face-to-face, a lunch, or a tele-detail can touch a lot of bases versus chasing individual doctors on the... So our strategy of chasing group practices, with our enhanced tele-detail capability and the willingness of doctors to let us in their offices, we're well over 80% Now remarkably more productive on a rep basis than I would expect, even non-competitive.

I had a lot of basis versus chasing individual doctors on the map. So our strategy of chasing group practices with our enhanced Telemark tell detail capability and the willingness of doctors, let us in their office were well over 80% now remarkably more productive on our rep basis Randall than I would expect.

Even noncovered times, so we're off to a great start I'm really proud of the sales group I mean, they're they're hitting the floor running and doctors want to see us and we're we're very productive.

Alfred F. Altomari: So we're off to a great start. I'm really proud of the sales group. They're hitting the floor running, and doctors want to see us. And, you know, we're very productive. I hope, knock on wood, that it keeps up. But I'm really pleased with the traction we're getting out of the gates. And you're right, that is the shining lining.

I hope knock on wood that keeps up but I'm really pleased with the traction we are getting out of the out of the gates and Youre right that is the shining lining.

On an auto rep basis, we're getting more mileage out of a rep than we traditionally would if they were just chasing doctors around the landscape.

Alfred F. Altomari: On a rep basis, we're getting more mileage out of a rep than we traditionally would, chasing doctors around the country. That's great. Thanks, Al. You're welcome.

That's great. Thanks Al you are welcome.

Thank you.

Operator: Thank you. As a reminder to our audience, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question comes from Tim Lugo with William Blair. Please proceed with your question.

As a reminder to our audience. If you would like to ask a question. Please press star one on your telephone keypad.

Our next question comes from Tim Lugo with William Blair. Please proceed with your question.

Yes, Thank you Tom.

Apologies. Our next question is actually from Oren Livnat with H.C. Wainwright. Please proceed with your question.

Operator: Our next question is actually from Oren Livnat with H.C. Wainwright. Please proceed with your question. Hey, can you hear me?

Good.

Hey can you hear me, yes, hey are good enough and that muting myself all day, so did mess up this time.

Operator: Yes. Hey, Oren. Good. I've been muting myself all day, so I didn't mess up this time.

So a couple of questions I.

Oren Gabriel Livnat: So, a couple of questions. I guess just to follow up on COVID-related matters, it sounds like you guys are getting pretty good at face-to-face, but what do you think about any impact, especially as we're surging again here on new patient visits or that matter? You know, do you think that you have to, you know, moderate your internal expectations with regard to, you know, therapies getting switched in this environment or maybe people putting off starting a little bit longer than they would otherwise? No, thanks Oren.

I guess just to follow up on that.

Little bit related matters.

It sounds like you guys are getting pretty good face to face, but what do you think.

How about any impact, especially as resurging again here on new patient visits or any patient visits for that matter.

Do you think that if you had to moderate your internal expectations with regards to you know therapy is getting switched in this environment or maybe people putting off started.

Turning a little bit lower than they would have otherwise.

Thanks, our enemy now we havent seen in the data yet I mean, I think we're fortunate versus somebody other specialist I mean, our our customers running and obstetric practice also so that moves on there given extra patients and so forth and from what we could see in the category the number.

Alfred F. Altomari: I mean, no, we haven't seen it in the data yet. I mean, I think we're fortunate versus some of the other specialists. I mean, you know, our customers run an obstetrics practice also, so that goes on. You know, they're given access to their patients and so forth.

Alfred F. Altomari: And from what we could see in the category, the number of prescriptions in the category hasn't fluctuated very much. It's a little off, but not like we've seen in pediatrics and some of the other areas that you follow. So not the one, not the one Oren, no, not yet.

Number of prescriptions in the category Hasnt fluctuated very much is a little off but not like we've seen in pediatrics and some of the other areas that you follow ups number one number one are now not yet I mean are we don't expected by the way when we look at regions that are really impacted by Covidien USA has that dad the prescribed.

Alfred F. Altomari: I mean, we don't expect it, by the way. When we look at regions that are really impacted by COVID, and you say, has prescribing in a very impacted region gone down? The answer is no, and we think a part of that is because they are actively getting more engaged with telemedicine, and the prescriptions are flowing through telemedicine. So I think the physicians are being quite resourceful with the obstetrics in their offices being open. You know, having to give access, even the worst states; they revert to telemedicine.

Moving in a very impacted region going down the answers now and we think a part of that is because they're there. They are actively getting more engaged with our fellow medicine and the scripts are flown through Tele medicine. We think so I think the physicians are being quite resource were resourceful, so that will give centric center.

Our offices being open.

Having to give access even in the worst state they revert to tell telemedicine hasn't dampened the category or their prescribing behavior, and we monitor that pretty closely so.

Alfred F. Altomari: It hasn't dampened the category or their prescribing behavior, and we monitor that pretty closely. So no, we don't see it, so we're relatively optimistic that the pie is intact, if you will, maybe a few percentage points down, but on the margins, not very impacted, and hopefully not at all. Hopefully, we're through, obviously, to work. All right.

So now we don't we don't see it so we're relatively optimistic that the pie is intact. If you will.

Maybe a few percentage points down.

On the margins not very impacted just yet.

And hopefully not at all hopefully with obviously the worst of it.

Alright, since I'm a nervous Nellie it can you just put our minds at ease with regards to this manufacturing validation.

Oren Gabriel Livnat: Since I'm nervous, Nellie, can you just put our minds at ease with regard to this manufacturing validation? Is everything on schedule? I noticed, you tweaked down the fourth quarter revenue guidance again, and I know that was or is all stocking. I'm wondering, has there been any change in the expected timing of the launch?

Is this is everything on schedule I notice you know.

You tweak down the fourth quarter revenue guidance again, and I know that's was there is all stocking I'm wondering has there been any change in the expected timing of the launch and can you put our minds. It is that everything is Ah within spec as far as you know on the manufacturing side Oren. Thanks for always worried about me I appreciate [laughter] no.

Alfred F. Altomari: And can you put our minds at ease that, as far as you know, everything is within spec, as far as you know, on the manufacturing side? Oh, Oren, thanks for always worrying about me. I appreciate it. No, no, you know, no, we're certainly on track. I mean, you know, I think if you think back to where we started on this journey in February with nine or 10 employees, our plant was mothballed, no money functional in the company. And you say, okay, we have to reactivate the plant, build, build staff at both our company and Corium. This is our timeline. That's why we've always had it out there. Now, truth be known, I would have loved to move forward, but we weren't able to do that. I mean, it just was time and not money-related.

No no. We're we're certainly on track I mean, you know I think if you think back to where we started on this journey in February with nine or 10 employees. Our plant was mothballed no money functionally in the company and you say, okay. We have to reactivate a plant you know build build staff at both our company and Corium you know this is art.

Mike That's why we've always had it out there now.

Truth be known I would have loved to move forward you know, but we weren't able to do that I mean, it just was time and not money related Trust me if I could move it with money we would have done that but this is the timeline that we put out as a team and it's just never move so.

Alfred F. Altomari: Trust me, if I could move it with money, we would have done that. But this is the timeline that we put out as a team, and it's just never moved. So no. Now for the revenue guidance. You know, really directly related to the time of year we're coming out, and the wholesalers just don't want to carry much inventory of any brand, any brand, out of the chutes.

No no in the revenue guidance is.

Really directly related to you know.

The timing year were coming out and then the whole. So you just don't want to carry much inventory of.

The brands any brands out of the shoot you have to earn that inventory. So we think thats, an achievable number and it's just based on the die.

Alfred F. Altomari: You have to earn that inventory. So we think that's an achievable number, and it's just based on the dialogue we've had. And look, the next step for us, so to give you more confidence, Oren, look, I own a Salesforce. I've got them calling doctors and spending a lot of time and money against the consumers.

Dialogue, we've had and look the next step for us. So so to give you more confidence on look I want to Salesforce.

Got some call and doctors from spending a lot of time and money against the consumers we build an internal organization we're probably.

Alfred F. Altomari: We've built an internal organization. We're probably, you know, approaching 30 people in the home office now, you know, so, like, we have full confidence in bringing this product forward, you know, but the fair balance, I always try to be with you. Like, we just couldn't move it forward, you know.

Approaching 30 people in the home office now so.

Like we are we are full confidence in bringing this product forward Tom.

A fair balance I always try to be with you like we just couldn't moving forward.

Despite our best efforts now with that said this is the time on our team told us and we'll announce.

Alfred F. Altomari: Despite our best efforts. You know, with that said, this is the timeline our team told us, and so we'll get there. You know, full confidence, we'll get there. And, I guess, when is the last spec check? So I think it's going to start going out the door. Yeah, I mean, right now, the batches are made, so let's just kind of put this behind us. The batches are made; they're sitting there. So what functionally needs to be done at this point is all the analytics have to be done on these batches. It's not typical, like in a typical production, or it's pass-fail, so the batches pass, and if they fail, they ship them out the door.

So we'll get there.

Full confidence we'll get there.

And I guess when is the last spec check so things could start going out the door, yes, I mean right now the batches are made so let's just kind of put this behind us. The badges are made they are sitting there. So whats functionally needs to be done at this point as all the analytics have to be done on these batches, it's not a typical like in a typical production or in this bill is passed fail.

For the batches path they fail shipment the door, but in this previous validation phase we're working on their protocol that we designed with the FDA, where we actually go in and do a lot of statistical testing and things like that so we're in the analytics part of it now so thats what were doing now as we speak and then we have to believe it or not write up a report for our file.

Alfred F. Altomari: But in this pre-validation phase, we're working under a protocol that we designed with the FDA, where we actually go in and do a lot of statistical testing and things like that. So we're in the analytics part of it now, so that's what we're doing now. And then we have to, believe it or not, write up a report for our files. It's a self-attestation.

Develop out of patient, we don't have to file with the FDA. So we have to put it on file and satisfy that we've done everything we could so we are in the.

Alfred F. Altomari: We don't have to file with the FDA, so we have to put it on file and satisfy that we've done everything we could. So we're in football terms. We're in the red zone. You know, I'm the big running back that's trying to reach the goal line at this point, but I'm, you know, I'm not quite there yet because it's just a series of activities.

In the football terms when the Red zone on the big running back it's trying to reach into the goal line at this point, but I'm.

My quite there yet because it's just a series of activity now with that said in the next.

Alfred F. Altomari: Now with that said, in the near term, we'll start talking to wholesalers, and we'll start trying to firm up orders, and, you know, so we're just going to keep progressing along. So we're in that phase, and that's why we mentioned we're also talking to managed care. So the other thing that I'm thrilled with, so I'm happy with, is that over 40% of this country is going to get our product for zero co-pay. That's just extraordinary.

Near term, we'll start talking to wholesalers and we'll start trying to firm up orders and so.

So we're just going to keep progressing along so we're in that phase and Thats. Why we mentioned we're also talking to managed care. So the other thing that I'm thrilled with so I'm happy with.

As were over 40% this country is going to get our product for zero co pay and growing.

Extraordinary.

We put our next them aligned so we also feel good about that or and so I think our managed care discussions are going great I think I own the best sales force I've ever privilege of working around and the doctors are excited on I got product common so.

Alfred F. Altomari: We put our necks on the line, so we also feel good about that, Oren. So I think our managed care discussions are going great. I think I have the best sales force I've ever had the privilege of working around, and the, I hope that relieves some of your anxiety. If that's possible, you did.

Absolutely.

I hope that relieves some of your anxiety.

Thats.

Thats possible you did.

[laughter].

Oren Gabriel Livnat: Thank you. The next question comes from Tim Lugo with William Blair. Please proceed with your question. Thanks for the questions, and I'm still a little anxious, Al. I apologize, but could you talk about this validation and analytics phase a bit more for final lots of product? Does any of this require in-person site inspections or in-person interaction with the agency, which may be impacted by, you know, tribal policies around COVID at the agency? Well, let me try to talk you off the ledge now. So, Oren was first; now you're second. No, no, Tim.

[laughter].

Thank you.

Our next question comes from Tim Lugo with William Blair. Please proceed with your question.

Thanks for the questions and I still adding sales.

So I apologize good could you talk about the validation and analytic sales a bit more sales final lots of product does.

Any of this require in person site inspections or in person interaction with the agency.

May be impacted by Uh huh.

Travel policies around covered at the agency.

Well, let me try to talk you off the ledge now with the warmest first your second.

Now now Tim Bob So with with the way. It functionally happens is that you we submit a protocol to the FDA say hit this is how we're going to validate our final specs and.

Tim Lugo: So, the way it functionally happens is that we submit a protocol to the FDA, saying this is how we're going to validate our final spec, you know, our manufacturing process. So it's a lot of statistics and a lot of testing, and, you know, that's where we are right now. Now, there's nothing that needs to be submitted. This is self-attestation.

Our manufacturing process. So it's a lot of statistics and a lot of testing.

That's where we are right now now there is nothing that needs to be submitted this itself at a station you know if everything if everything goes well, which is it appears that it has and will we put in the files I think we're done no no. It doesn't go anywhere. So the batches you know just came online recently and we're doing all the testing and writing.

Alfred F. Altomari: You know, if everything goes well, which it appears that it has and will, we put in the files. That's it. We're done. No, no, it doesn't go anywhere.

Alfred F. Altomari: So the batches, you know, just came up the line recently, and we're doing all the testing and writing up the reports, and that's right now where we are. So we're, you know, we're as close as we can be. In a normal situation, Tim, we wouldn't need to do any of this. We would say that the batch passed our specifications. Yes, no. It's black-white.

The reports and that's that's right now where we are.

So we're we're as close as close can be in a normal situation said, we wouldn't need to do any of this we would say that the batch pass our specs, yes, no. It's black White does you ship. It. So these batches are peculiar.

Alfred F. Altomari: If it does, you ship it. So these batches are peculiar because, you know, they're really technically developed in batches. So that's why Dennis is expending them through R&D. They really are. And then if we pass everything, which we expect to do, that we ship it out the back door, and we use it in manufacturing, we flip it into a commercial batch. So now that's it. That's it. There is nothing. Nothing. And it's not subject to any kind of inspection.

Because we are really technically developed in batch.

So thats why Dennis is expensing them through R&D, there really are and then if we we pass everything which we expect to do that we ship it out the back door and we use it in manufactured we flip it into a commercial batch. So now that's it that's it nothing nothing and its not subject to any kind of inspection. All your files are theoretically subject to inspection at any time.

Alfred F. Altomari: You know, all your files are theoretically subject to inspection at any time by the FDA. But we don't have to show them to anybody. Nothing. It just stays on file, both in the company and Corium.

By the FDA, but we don't have to show with anybody nothing it just stays on file both in the company in Korea, and it's always subject to a question by the FDA, but would they don't they don't have to come in and checking you know it's all.

Alfred F. Altomari: And it's always subject to question by the FDA, but they don't have to come in and check it. It's all self-reporting. What do you ever want to know about validation, Tim? Because most people, to be truthful with ourselves, most people take this off the scoreboard even before they submit their NDAs. They just get this done. You know, obviously, we didn't have the financial resources to do that. That's why you're hearing more about validation in the tip. This would never even hit your ears, generally, in our...

Self reporting.

Morning, everyone know validations and because most people to be.

The truth truthful with ourselves most people take this off the scoreboard even before they submit their end the ace. They just get this done you know obviously, we didnt have the financial resources to do that that's why you're hearing more about validation need typically would this would never even hit your irrs generally in our industry. So we just started late and its become the gating item. So that's why we're spending so much time talking about it.

Tim Lugo: So we just started late and this is the gating item, so that's why we're spending so much time. That's fine. I understand. I guess, could you talk maybe a bit on the marketing side now? You know, I know Zulane made some contracting gains before you were even in the market, and that led to some of that growth we saw from them over the past few years. Can you talk maybe? Are you able to break into those kind of relationships?

That's fine.

Then I guess can you talk maybe a bit on the marketing side now you know I know really made some contracting gains before you are even in the market.

And that led to some of the growth you saw some of them.

Over the past few years can you talk maybe are you able to break into those.

The relationships and how are you going to approach contracting in 2021, Yeah. We don't we don't believe Timothy have per se contracts that were aware, we haven't bought up against them. What they have the monopoly thing because the affordable care Act that they really get on the formulary for not for.

Alfred F. Altomari: And how are you going to approach contracting in 2021? Yeah, we don't we don't believe, Tim, that they have per se contracts, you know, that we're aware of, we haven't signed up against them. You know, what they have is a monopoly, and we call it the Affordable Care Act. They really get on the formulary for not... For no reason. I mean, they just get the place. There's 18 forms of contraception.

For no reason I mean, they just get get the play.

This quarter's 18 forms of contraception, there in a monopoly they get it so to the best of our knowledge that there is not as linked contracts were up against you know on now with that said the overall often on Mylan appears to have does put some promotional noise against that they had some you know it's a smaller sales force of one point detailing the product so they.

Alfred F. Altomari: They're in a monopoly. They get it. So to the best of our knowledge, there's not a zling contract we're up against. Now with that said, off and on, Mylan appears to be making some promotional noise against it. They had a smaller sales force at one point detailing the product, so they kind of picked up some volume there. We think they pick up some business now and then and Sam's paranoid accounts. So there's some contracting in at the Planned Parenthood level but not at the PBM level of the commercial plans the way. We think that's really kind of a residual of the ever-patch days and a little bit of selective promotion. But it's not a contract, so to answer your question, that's not an issue.

Ladies will pick up some volume there we think they pick up some business now and then and Sam paranoid accounts. So there is some contracting at kind of that the planned parenthood level, but not in the PBM level to commercial plans. The way you think of them. So we think thats really kind of a residual of the ever patch stays and a little bit of selective.

Caution, but it's not a contracting so to answer your question. That's not that's not an issue and I think thats why we were in a formulary position. We are already I mean, its but we think were we hope by time, we ship product can have reps. The rest of this year, we hope we get closer to the 50% so were growing at half the country is going to be in not only enabled that doesn't mean the other half will.

Alfred F. Altomari: And I think that's why we're in the position we are already. I mean, we think we're, we hope by the time we ship product and have reps, you know, the rest of this year, we hope we hit closer to the 50s. So half the country is going to be not only enabled, but that doesn't mean the other half won't have access to our drug. There may be a copay. So the 50%, 40% we quoted is zero, goose egg.

Some have access to our drug there may be a co pay so the 50%, 40% we quoted a zero gooseneck, we got it no different than were for engine, our way up to closer to 50%.

Alfred F. Altomari: We've got it. You know, then we're inching our way up to closer to 50%, you know, and then with the other 50%, we think we can activate it through, you know, coping. You know, and then we have a co-pay card to help. But we continue to be in negotiations with the other PBMs to hopefully improve that. So hopefully, as we go into next year, you'll hear that it's getting closer to that 85%, next down the line. Okay, that's good to hear. And maybe lastly, can you talk about some of the quantitative metrics around the engagement on the campaign to the Unbranded campaign which you launched? Yeah, there's a couple different pieces.

But the other 50% we think we can activate through you know.

Through co pays no and then we have a co pay card.

Health, if we need to.

But were at risk we continue to be in negotiations with the other pbms to hopefully improve that so hopefully as we go into next year, you'll hear that's getting close to that 85% we ever next on the line for <unk>.

Okay. That's good to hear and maybe lastly can you talk about some of the quantitative metrics around engagement.

Moving on to the campaign to begin branding campaign, which you launched yes, there's a couple of different piece of it I think the big sound by Tim as we only and probably have a 50% deployed so we while we deployed it there is still lot more to come so.

Tim Lugo: I think the big soundbite, Tim, is we only probably have 50% deployed. So while we've deployed it, there's still a lot more to come. So, when we turn on the lights, you know, it has different elements, right?

So we turn on the lights, you know it has different elements right. So you see us on like playing Dan or Facebook and.

Alfred F. Altomari: So you see us on, like, LinkedIn or Facebook. And, you know, that's a piece of the puzzle. But really, the action, right? We want to bring them into our website, right? That's where we think the action is, so we're getting a lot of volume. I don't have the numbers in front of me, but what we really want is like, anybody can tag a base on a website, but we want to see them go deeper, right? You want to go deeper past the homepage and into the analytics, right?

You know that's a piece of the puzzle, but really the action right, we want to bring them into our website right. That's where that we think the action or is so we're getting a lot of volume I don't have the numbers in front of me, but what we really want is like anybody can tag a base on a web site, but we want to see him go deeper right you want to go deep past the home page and into the city and.

Mix right that are actually doing.

Alfred F. Altomari: That they're actually doing. We're well ahead of our metrics. I believe I said in the script that over 80% of the people are doing Phil, and are really engaged at a level.

We're well well ahead of our metrics site I believe I said in the script over 80% of the touches are doing stuff. So in are really engaged at a level. So thats exciting. So we haven't turned on the whistles and bell jet will turn on more spending as we get closer and drive more traffic there but.

Alfred F. Altomari: So that's exciting. We haven't turned on the whistles and bells yet. We'll turn on more spending as we get closer and drive more traffic there, but what we like is that we're well ahead of any metrics we would have expected at this point with a level of increase, which tells us that they're finding our site relevant. So hopefully, more to come. But that's the metric I'm looking at, Tim. I could care less how many hits I get.

What we like is that were well ahead of any metrics, we would've expected at this point with the level of engagement and which tells us that they are finding our site relevant so hopefully more to come but that's the metric I'm looking at Tim I could care less how many hits I get I want to know how much that they're doing something so I look a layer deeper in the onion and saying.

Alfred F. Altomari: I wanna know how much if they're doing something. So I look a layer deeper in the onion and say, are women engaged? And it appears yes. So the two metrics that excite me so far are three. The 40% co-pay, right? Zero co-pay. [inaudible] I'm a wild man, Tim.

Saying is it are they are women engaged and appears yes. So with the two metrics that excite me, so far 3% to 40% co pay right zero copay, the 80% plus face to face details and 80% engagement in the consumer everything we're doing is we're hitting our major metrics and exceeding them. We have that we have an activated the fields.

I haven't activated the product yet so I think we've done a great job priming the pump on our three elements managed care HCP and consumer so I just cant wait let it loose now like I'm, just I'm, a wildly and we're going to tell you I'm I just can't [laughter] good to hear thanks for all the questions.

Alfred F. Altomari: What can I tell you? I just can't wait. Good to hear, Al. Thanks for all the questions. Thank you. Our next question comes from Leland Gershel with Oppenheimer & Company. Please proceed with your question. Good afternoon, Al.

Thank you.

Our next question comes from Leland Gershell with Oppenheimer and company. Please proceed with your question.

Good afternoon al Thanks for taking my questions.

Leland Gershel: Thanks for taking my questions. As we head into the Twitter launch, and with the rise of telemedicine channels, probably accelerated a bit by the COVID condition, I wanted to ask you, with your intel, what you could tell us about the utilization of telemedicine versus women, you know, either seeing or perhaps, you know, calling or zooming in with their providers as they, you know, seek out their birth control options, whether it's new patients coming online, whether I wanted to know if you could share with us your understanding of that market and also how that may relate to your efforts with regard to the Twitter launch in that part of the market. Thanks.

As we head into the Twitter launch and with the rise of Tele medicine channels.

Probably accelerated a bit by the cobot condition.

And.

Want to ask but with your Intel would you could tell us about what the utilization of telemedicine versus women with you're seeing or perhaps calling resuming in with their providers as they.

Seek out their birth control options, whether it's new patients coming on line with.

Whether its existing patients who are just looking to kind of streamline the process and getting prescriptions that way wanting to know if you could share with us your understanding there and also how that may relate to your efforts with regard to the total launch.

That that part of the market. Thanks.

Thankfully, we're not yeah.

Alfred F. Altomari: Yeah, thanks, Leland. Yeah, I mean, I would characterize it as a really small but growing very quickly part of the OBGYN practice. I personally believe in the studies we've done, a lot of this has to do with reimbursement because right now, in their COVID environment CMS, the Liberal Reimbursement box for telemedicine. You know, that's so it's worth their while for OBGYNs to engage their patients through telemedicine. There's a school of thought that, if that goes back... I think the order of magnitude is between $29 and approximately $75-ish, so that's my understanding of the reimbursement.

Addition.

I would characterize it as a really small but growing very quickly part of the obituaries practice.

I personally believe in the studies, we've done a lot of this has to do with reimbursement because right now and our cobot environments CMS is giving some pretty liberal reimbursement the docks for Tom.

Tele medicine business.

Yes, so it's worth their while filed including obviously wants to to engage their patients through telemedicine.

There's a school of thought that if that goes back.

Less obvious I think order magnitude of difference between like $29 and approximately 75 ish.

I mean, my understanding of the reimbursement.

David Boomerangs back to 25 to 30 box, we're going to see it go down again. So it really is a function of that we believe the reimbursement or time with that said, it's growing quickly and somewhat regionally wieland. So we're watching it I believe our company has.

Alfred F. Altomari: If it boomerangs back to $25 to $30, we're going to see it go down again. So really, it's a function of, we believe, the reimbursement for their time. With that said, it's growing quickly and somewhat regionally, Leland.

Alfred F. Altomari: So we are watching it. I believe our company has to be involved in that channel, either for now or in the future. So we're watching telemedicine. We think it's real.

That'd be involved in that channel either for now or.

For the future. So we're watching Tele medicine, we think it's real we think it's going to grow we think its a function that growth is going be a function reimbursement we.

Alfred F. Altomari: We think it's going to grow. We think it's a function. That growth is going to be a function of reimbursement. We think teleprescribing is going to continue to grow, but we haven't seen it that big in contraception, you know, so the data is not there yet. Because, as you know, a lot of this market is refills, you know, just repeat. So that's a bolus that's not as impacted because, quite frankly, a doctor can just take a phone call. [inaudible] So we're watching the new starts, and they don't seem to be that influenced just yet, but it's early days, and I'm not 100% convinced we have great So it's something we're keeping an eye on, but I think the real metric for all of us is then what reimbursement is going to be. I hate to be that cliche, but I think that there really is a direct relationship between reimbursement and telemedicine, both in OBGYNs but across the country. So we'll have to see where that lands post-COVID. But is it worth the doctor's time to do it?

We think tell of prescribing is going to continue to grow, but we haven't seen it that being contraception.

Yes.

So the data is not there yet because if he as you know that a lot of this market as refills is just repeat business. So we have that's a bolus that's not as impacted because quite frankly, the doctor can just can't pick a phone call and.

Handle that so.

So we were watching the new starts and they don't.

Seems to be that influence just yet, but it's early days and I I'm not 100% convinced we have great tools, yet the monitor that so something we're keeping an eye on top but I think the real metric for all of US the same with reimbursement going to be I hate to be that crafts, but I think that really it is a direct relationship between reimbursement and tell.

Well, the medicine or both and obituaries across the country. So we'll have to see where that lands postcode. So is it worth the doctors time to do it. So you know the answer is yes, now I don't know that $29 I don't know if that is it's probably better to open your practice and have less patients flowing through so that's that's what word metric we're watching just yet so.

Alfred F. Altomari: So you know, the answer is yes now. I don't know if that $29, I don't know what that is. It's probably better to open your practice and have fewer patients. So that's the metric we're watching just yet. So it's a small but emerging channel. I believe we should put a bet there.

It's a small but emerging channel I believe we should put a bat there and so we want to be a player in that space. So we're going to probably do that you know down the road when we're looking at potentially alliances and you know so but we're still we're still studying just yet so we're not we're not sure. It's a day one you need to do.

Alfred F. Altomari: And so we want to be a player in that space. So we're probably going to do that down the road. We're looking at potentially joining an alliance. We're still studying just yet, so we're not sure it's a day one decision. So, but something that's high on our radar. We don't think it has a direct impact on PORLA either way, right now, but down the road, it, I know that's a long name, I apologize, but that's what we say.

Just yet so but something that's high on our radar screen that we should we should get onto pronto. We don't think it has a direct impact on twirla either way right now, but down the road it might.

No that's and we're not sure apologize by discussing what we say so watch reimbursement that's what's the reimbursement from CMS and then if it goes down we'll see if.

Alfred F. Altomari: So watch reimbursement. Watch the reimbursement from CMS, and then if it goes down, we'll see if the visits stay up. So there's a direct correlation between that, at least what we've seen in the past. Yeah, no, we'll watch that.

Fit the visits they opposite sort as a direct correlation between at least what we've seen in the data.

Yeah, no well, what we'll watch that that's good that's helpful. And then a question maybe for Dennis just in terms of the cost of goods you know with those three batches expense through R&D and then you're gonna have been commercial inventory just how we should think about normalization of.

Leland Gershel: That's helpful. And then a question maybe for Dennis, just in terms of the cost of goods, you know, with those three batches, the expense through R&D, and then you're going to have commercial inventory, just how we should think about normalizing COGS as you get into 21. Would we see that kind of hit, you know, 2Q or mid-year? Or I guess it depends on the size of the batches and your, you know, sales uptake. Yeah, get beyond the first two quarters.

As we get into 21 would we see that kind of hit.

Two q. or mid year, we're I guess it depends on the size the batches in your you know sales uptick.

Yes get beyond the first two quarters.

It will get more normalized and there will be some fixed cost in there two of our you know our our our state.

Matthew Riley: It'll get more normalized, and there'll be some fixed costs in there too of our, you know, our staffing, and some depreciation, which is in cash, but those, by, you know, absorb, over time, but you know, I would think on a net sales basis. He'll be, you know. 20% longer. Cogs of, Yeah, we think there's allocations that are involved, you know, Leland also besides the direct costs from Quorium, if you will. We pay a piece price from Quorium, as you know, but we have some internal costs that are dedicated to that. So we have some fixed costs that we're going to start, you know, restating to the top. Right, you know, you're going to have a supply chain organization, very small, but you know, some bodies that have to be allocating some of their costs. So with very little volume early on.

Camping, and some depreciation which is in cash, but those there will be some fixed cost will have to overcome just by you know absorption.

Over time, but you know I would think.

On a net sales basis, we still will be you know a you know 15% 20% longer range as.

As a a cogs of net revenue somewhere in that range. So you know.

Yes, kinda that should be right in the ballpark. Yeah. We think we think theres allocations that are above you know Leland also besides the direct cost from core image, where we pay a piece price inquiries as you know, but we have some internal cost.

Are dedicated to that so we have some fixed costs that we're going to start.

Rob Restating to Cogs and in fact, right you know you're going to have a a supply chain organization very small, but you know some bodies that you know basically going to manage Corey for us and we'll have to be allocating some of their their cost over to that area. So we're.

With very little volume early on it's not going to be absorbed but it'll become insignificant overtime to the to the Cox.

Matthew Riley: Not going to be absorbed, but it'll become... Gotcha, okay, that's, um, that's helpful. Thanks very much for taking the questions and congratulations. Thanks, David. Thank you. Our next question comes from Paul Biedlingmeier with Edward Jones. Please proceed with your question. Thank you.

Got you Okay. That's.

That's helpful. Thanks, very much for taking the questions and congratulations thanks.

Thanks Richard.

Thank you.

Our next question comes from Paul Beadling Meyer with Edward Jones. Please proceed to take questions.

Oh, thank you.

Just a quick question could you, possibly broached the issue of the pricing of the product.

Paul Biedlingmeier: Could you possibly broach the issue of the pricing of the product in comparison to existing products there? Sure. That are already on the market. Yeah, yeah, so Paul, nice meeting you. I don't believe we have the privilege. But yeah, so I'll just frame the kind of the football field for you.

In comparison to existing products their tour. So nice that are already on the market sorry, yeah.

As opposed to me I don't believe Weve had the privilege, but yes, we just saw I'll frame the kind of the football field Korea.

The most relevant we compare ourselves more to the branded products. If you will the other patch goes out the back door at a $122 a month as they are with we call wholesale acquisition or we'll call whack.

Alfred F. Altomari: The most relevant thing is that we compare ourselves more to the branded products, if you will. The other patch goes out the back door at $122 a month. That's their what we call wholesale acquisition, or we'll call it WAC. You know, some of the birth control pills that are branded could be as high as $210. I just looked at some that are even over $200.

Some of them.

[noise] control pills that are brand it could be as high as 210, I just spoke to some or even over 200 Bucks. So if you want to use that as your kind of goalpost you know the median the median than the categories. You know probably 165 170. If you you know the median we tried we chose a price of 150 975, that's what we.

Alfred F. Altomari: So if you want to use that as your kind of goalpost, the median in the category is probably $165 or $170. We chose a price of $159.75. That's what we sell to wholesalers. So we're closer to the low end of the medium, if you will.

We sell the wholesalers for.

So you know weve. So we're closer to the low end of the medium if you will but we're not as low as the other patch because the payers who ultimately pay for this product said look you know you have about what they believe is a better product in our case, a better patch that will give us some premium pricing, but that's.

Alfred F. Altomari: But we're not as low as the other patches because the payers who ultimately pay for this product said, look, you have what they believe is a better product, in our case, a better patch. They'll give us some premium pricing, but at the same time, we can't go up to 200. So we've chosen to put the ball closer to the pinball that's more relevant.

The same.

Same time, we kick off the 200, so because so we've chosen to put the ball closer to the pen Paul that that's more relevant so when we get in front of managed care, we're not starting at these big differences because one of the pattern that we have to roll back that price anyhow, you know more than likely so we said why why are we playing that game, let's just start.

Alfred F. Altomari: So when we get in front of managed care, there are differences. Because what ends up happening, we have to roll back that price anyway, you know, more than likely. So we said, why, why are we playing that game? Let's just start with a rational price. Scott Coiante, Alfred Altomari, Scott Coiante, Unknown Executive, Nazibur Rahman, Amy Welsh, The payer, the managed care group, is paying that, so they're not paying 122. They're paying slightly more than that, if you know what I mean, for the replacement.

A rational price.

But slightly less than the average in order to meet in if you will seen on when we tell that the customers are like and then the other part of our value proposition you heard me mention a couple of times is patch replacement program because of a patch falls off.

Women have trouble pills women leaves pills, they lose patches. So we set as.

The manufacturer looks you can call us and we will give it to him for free so.

And any other patch.

The payer to managed care groups paying that so they're not paying 122, they're paying slightly more than that if you know what I mean for that replacements. So when we say hey look here's our price.

Alfred F. Altomari: So when we say, hey, look, here's our price. Here's where it's at. We're eating the cost of these replacements. You're only paying for three patches.

Here's where it's at where we're eating the cost of these replacements.

You're only paying for three patches. That's why I think the payers are sarnoff, saying, Hey, we will cover this profit. So I don't know, we we started a more rational place Paul and it seems to be working for us as I hope that makes some sense. If not you just offer price back them anyway. It just seems like it's silly game to me.

Alfred F. Altomari: That's why I think the payers are starting off saying, hey, we'll cover. So, I don't know, we started a more rational place, Paul, and it seems to be working for us. I hope that makes some sense. If not, you just have to cough up the price back. It just seems like a silly game.

Okay. Thank you you're welcome thanks, Tim.

Paul Biedlingmeier: Thank you. You're welcome. Thank you. There are no further questions at this time. I'd like to turn the floor back over to Al Altomari for any closing remarks. Well, thank you, everyone. Thanks for the questions, as always. They're really great.

All right.

Thank you.

There are no further questions at this time I'd like to turn the floor back over to al to Murray for any closing remarks.

Well. Thank you everyone. Thanks for the questions as always they're really great. So appreciate it as you hopefully to see in the third quarter of 2020, we feel.

Alfred F. Altomari: So appreciate it. As you hopefully can see, in the third quarter of 2020, we feel like we've delivered against the manufacturing plan, the managed care plan, the customer engagements, our financial objectives, and we're on track, you know, launching Twirl this quarter. Leading up to this important milestone, we remain committed to minimizing access barriers for women and by extending the coverage and reimbursement for TORLA. You know, we're allocating a substantial amount of our resources to completing the validation process, not the batches, but the process. And we'll continue to use our Salesforce out there to build awareness. You know, engage with these customers that are really important and have a robust dialogue. And we're really pleased with the progress we've made and confident that that strategy is going to pay off for us. Getting the market ready for the product seems to be the right thing to do.

And we've delivered against the manufacturing plan the managed care plan the customer engagements, our financial objectives, and we are on track launching twirla in this quarter.

Leading up to this important milestone we remain committed to minimizing access barriers for women and by extending the coverage and reimbursement for Twirla.

We're allocating a substantial amount of our resources to completing the validation process not the batches the process and we will continue to use our sales force out there talking to build awareness.

Engage in these customers that are really important and a robust dialogue and were really print. We're really pleased with the progress we've made in comp.

Confident that that strategy is going to pay off for us to get the market ready for the products seems to be the right thing to do.

Looking ahead to our next call. So I'll look forward to talking about it.

Operator: Looking ahead to our next call, you know, I look forward to talking about, you know, an update on all our launch activities and all our metrics, you know, and discussing, you know, we'll discuss with you, we hope to discuss with you, feedback we're hearing both from patients and physicians. We believe, you know, the future for Agile is really bright, you know, so we're excited. We look forward to talking about real data with you next time we talk, and we look forward to becoming and continuing to be a leader in this space. So we want to thank you for dialing in, for your interest in our company, and thank you for your support. And we look forward to the next time, hopefully, in the not too distant future, when you'll hear the product is shipped. Ladies and gentlemen, this concludes today's webcast. You may now disconnect your lines at this time. Thank you for your participation, and have a great day!

Update on all our launch activities in all our metrics.

Discussing will will will discuss with you we hope to discuss with you feed backward.

We are hearing both from patients and physicians.

We believe were the at the future for Agiles is really bright get out. So we're excited we look forward to talk about real data with you next quarter next time, we talk and we look forward to becoming can continue to becoming a leader in this space. So we want to thank you for dialing in your interest in our company.

Thank you.

For the support and we look forward to it to the next hopefully not.

Not too distant future you'll hear at the product is shipped so thank you.

Ladies and gentlemen. This concludes today's webcast you may now disconnect your lines at this time.

Thank you for your participation and have a great day.