Q1 2021 Agile Therapeutics Inc Earnings Call

[music].

Operator: Good afternoon, and welcome to the Agile Therapeutics First Quarter 2021 Financial Results Conference Call. Please note today's event is being recorded. I would now like to turn the conference over to Matt Riley, Head of Investor Relations.

Good afternoon, and welcome to the agile Therapeutics first quarter 2021 financial results Conference call. Please note today's event is being recorded.

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

Matthew Riley: Hello, everyone, and welcome to today's conference call to discuss our first quarter 2021 financial results and corporate.

Hello, everyone and welcome to today's conference call to discuss our first quarter 2021 financial results and corporate update.

Matthew Riley: Before we start, let me remind you that today's call will include forward-looking statements based on current expectations.

Before we start let me remind you that today's call will include forward looking statements based on current expectations, including statements concerning our financial outlook for the future management's expectations for our future financial and operational performance our business strategy, our assessment of the combined hormonal contraceptive market and the potential market.

Matthew Riley: including statements concerning our financial outlook for the future, management's expectations for our future financial and operational performance, our business strategy, our assessment of the combined hormonal contraceptive market, and the potential market share for Torilla, among other statements regarding our plans, prospects, and expectations. 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 those discussed in the forward-looking statement.

Share for Toro among other statements regarding our plans and prospects and expectations.

Statements represent our judgment 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 and the forward looking statements.

Matthew Riley: Please refer to our filings with the SEC, 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.

Please refer to our filings with the SEC, 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.

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 questions. Now, I'll now turn the call over to Al. Thank you very much, Matt.

The information on today's call is not intended for promotional purposes and not sufficient for prescribing decisions.

Joining me on today's call are al Tomorrow on Therapeutics, Chairman and Chief Executive Officer, and Dennis Reilly Chief Financial Officer.

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

Thank you very much Matt good afternoon, and welcome everyone to our first quarter 2021 conference call.

Alfred F. Altomari: Good afternoon, and welcome everyone to our first quarter 2021 conference call. To kick off the call, I'd like to highlight what we believe are the four most significant takeaways from today's update. Number one, I want to remind everybody, we began our initial commercial shipments of Twirla to the wholesalers in late December 2020. As the wholesalers work down their inventory, we anticipate product revenue will more closely reflect script demand growth at the retail level. Number two.

To kick off the call I'd like to highlight what we believe are the for most significant takeaways from todays update number one.

I wanted to remind everybody we began our initial commercial shipments of twirl and sort of wholesalers and late December 2020.

As the wholesalers worked down their inventory, we anticipate product revenue will more closely reflect script demand growth at the retail level number two.

Alfred F. Altomari: Our Salesforce received their samples also in late December and commenced distributing samples to health care providers or HCPs in the first quarter of 2021. While samples are not reflected in the total prescriptions or the TRX data, we believe samples often lead to HBPs writing future prescriptions. Number three. We will continue to invest in growing Twirlik and expect our operating expenses in the second quarter of 2021 to be higher, reflecting increased spending on brand marketing and product sampling. Number four.

Our sales force received their samples also and late December and commenced distributing samples to health care providers or Hcp's and the first quarter of 2021.

While samples are not reflected in the total prescriptions for the Trs data, we believe samples often lead to hcp's, writing future prescriptions.

Three.

We will continue to invest and growing toilet and expect our operating expenses and the second quarter 2021 to be higher reflecting increased spending on brand marketing and product sampling.

Number four we.

Alfred F. Altomari: We're excited about the recent growth in the number of HCP riders and the resulting TRX growth, and we believe the brand is laying the foundation for revenue growth into 2021. To that end, I want to spend our time today walking through TORALIS' progress to date and why we are so encouraged. I will also discuss updates on our marketing efforts to increase awareness of Toron. Finally, we'll provide an update on our financial performance.

And we're excited about the recent growth and the number of HCP writers and the resulting <unk> growth and we believe the brand is laying the foundation for revenue growth into 2021.

So that and I want to spend our time today walking for it's for all this progress to date and why we are so encouraged.

I will also discuss updates on our marketing efforts to increase awareness of <unk> five.

Finally, we will provide an update on our financial performance.

Alfred F. Altomari: We're using slides this quarter to guide and supplement today's conversation, and you'll hear me refer to these as we progress through the updates. You can find this presentation on our website. Now, let's talk about Squirrel's performance.

We're using side this quarter to guide and supplement today's conversation and you'll hear me refer to these as we progress through the updates you can find this presentation on our website.

Now, let's talk about squirrel his performance.

Alfred F. Altomari: First, I'd like to give an update on Corella and our performance to date, our first full quarter of commercial launch. As I mentioned, we banned sampling in the first quarter, and we believe our sampling efforts are important to driving HCP and patient awareness about twirling. The first several weeks of quarter one included intensive sampling, and in the weeks that followed, we've seen steady trends of increasing scripts, refills, and awareness of our product.

Firstly, you have an update on <unk> and our performance to date, our first full quarter of commercial launch as I mentioned, we began sampling and the first quarter and we believe our sampling efforts are important to driving HCP and patient awareness and <unk>.

The first several weeks of quarter, one included and intensive sampling and.

And in the weeks of follow we've seen steady trend of increasing scripts refills and awareness of our products.

Alfred F. Altomari: On slide four of the deck, which outlines a four-week rolling average over the first quarter, you'll be able to see the trend quite clearly, and we're thrilled to see the growth on all these key performance metrics. We believe this is a sign of a healthy brand and have seen these trends continue into the early part of the second quarter. As we progress through 2021, as we did in our earnings press release, we expect to update you on a quarterly basis rather than provide such granular detail as shown on slide four.

On slide for the deck, which outlines a four week rolling average over the first quarter youll be able to see the trend quite clearly and we're thrilled to see the growth on all of these key performance metrics.

We believe this is a sign of a healthy brands and.

And have seen these trends continued into the early part of the second quarter.

As we progressed through 2021 as we did so and our earnings press release, we expect to update you on a quarterly basis, rather than providing such granular detail as shown on slide four.

Alfred F. Altomari: We thought this data would be useful for the purposes of providing initial insights in the first quarter of our launch. Our growth in total prescriptions was driven by an increased number of prescribers and growing refill rates. The graph on slide five showcases, monthly Rx data.

We thought this data would be useful for the purposes of providing on initial insights into the first quarter of our launch.

Our growth and total prescriptions was driven by an increased number of prescribers and growing refill rate.

The graph on slide five showcases our monthly Rx data.

Alfred F. Altomari: As you can see, the number of TRXs from January onward and the increasing refill trend as well. We expect this uptake will continue as we move into the second quarter and beyond. We're pleased with the progress to date on the growth of our prescriber base. When we last spoke, we told you that we would continue to focus on educating and expanding our prescriber base as we seek to grow our brand. I'm excited to update you on the progress of what we're seeing.

And as you can see increasing the number of <unk> from January onward, and increasing refill trend as well.

We expect this uptake will continue as we move into the second quarter and beyond.

We're pleased with the progress to date on the growth of our prescriber base. When we last spoke we told you that we would continue to focus on educating and expanding our prescriber base.

As we seek to grow our brands.

I'm excited to update you on this progress of what we're seeing.

Alfred F. Altomari: During the first quarter, the number of prescribers increased dramatically. As of March 31st, we had more than 855 writers, and the number has continued to increase into the second quarter to over 1,200 writers. You can see prescriber growth on slide six. The growth in the number of prescribers writing TREXs or TORLA has continued to steadily grow and increase in momentum at the TREX level. Importantly, the number of TREXs each prescriber is writing is also growing.

During the first quarter for number of prescribers has increased dramatically.

As of March 31, we had more than 855 writers and a number has continued to increase into the second quarter to over 1200 prescribers.

You can see the prescriber growth on slide six.

The growth and the number of prescribers, writing <unk> for Twirler has continued to steadily grow and increase and the momentum at the Trs level and.

Importantly, the number of <unk> each prescribers writing it has also grown.

Alfred F. Altomari: And we're seeing higher refill rates, and approximately 25% of our units dispensed to pharmacies are now refilled. Additionally, our sales team of 65 sales representatives and eight virtual sales specialists continue to engage in both in-person and virtual visits with prescribers.

And we're seeing higher refill rates and approximately 25% of our units dispensing pharmacies are now refills.

Our sales team of 65 sales representatives and a virtual sales specialists continue to engage with both in person and virtual visits with prescribers.

Alfred F. Altomari: With vaccination rates continuing to increase, we anticipate having the ability to meet in person with a growing number of practices, which we expect to enable us to make continued inroads and complement with our virtual sales force. I also want to comment on our efforts to expand our distribution network. On our last call, we discussed a new arrangement with Sterling Specialty Pharmacy.

And with vaccination rates continuing to increase.

We anticipate having the ability to meet in person with a growing number of practices.

Which we expect to enable us to make continued inroads and complement with our virtual sales efforts.

I also want to comment on our efforts to expand our distribution network on our last call.

Discuss our new arrangement with Sterling specialty pharmacy.

Alfred F. Altomari: Today we can report this relationship, while it's in its early stage, has been very productive. We're encouraged by the efforts to date and believe this collaboration will support our continued sales uptake at Swirla. While the agreement's only been active for one month, we see a number of patients and prescribers continuing to grow. We also recognize the increasing role of telemedicine in facilitating access when we continue to evaluate this channel as we move forward with TWRLA. Now in managed care

Today, we can report this relationship while it's early stage has been a very productive one.

We are encouraged by the efforts to date and believe this collaboration will support our continued sales uptake of swirl and.

While the agreement is only been active for one month, we see a number of patients and prescribers continuing to grow.

We also recognize increasing role of telemedicine and facilitating access when we continue to evaluate this channel as we move forward with for island.

Now on the managed care.

Alfred F. Altomari: We remain focused on increasing access to TORILA through a variety of efforts, including the focus on expanding access and reimbursement coverage for TORILA across managed care and government insurance plans. In particular, we made a lot of progress in obtaining Medicaid coverage for swirling. Currently, Torola is covered with no prior altercations in 20 states, and we're expecting coverage in Texas in May of 2021.

We remain focused on increasing access to <unk> through a variety of efforts, including a focus on expanding access and reimbursement coverage for its rollout across managed care.

And government insurance plans.

And particularly we made a lot of progress and obtaining Medicaid coverage for its world.

Currently <unk> is covered with no prior authorizations and 20 state and were expecting coverage and Texas and May of 2021.

Alfred F. Altomari: The Medicaid Market represents a large number of combined hormonal contraceptive or CHT users. Medicaid buy-in for oral contraception total prescriptions in 2020 was nearly 8 million. It's worth noting that we believe roughly one-third of the business of the other patches comes from Medicaid. We're encouraged by this trend and view this as another source of ongoing market growth for Twirla. We remain committed to maximizing access to Twirla for all women interested in using our product.

And Medicaid market.

Represents a large number of combined hormonal contraceptive for CHP users mitigate volume for oral contraception and total prescriptions in 2020 with nearly $8 million, it's worth noting that we believe roughly one third of the business of the other patches comes from Medicaid.

We're encouraged by this trend and view this as another source of ongoing market growth for tomorrow, and we remain committed to maximizing access for <unk> for all women interested and using our product.

Alfred F. Altomari: Now I'd like to turn to a marketing update. I want to spend some time on the work we've been doing to increase awareness of twirling. If you've been following along with the deck, I'm now on slide seven.

Now I'd like to turn on marketing update.

I want to spend some time on the work we've been doing to increase awareness of twirl and if you've been following along with debt I'm now on slide seven.

Alfred F. Altomari: We focused on reaching HCPs and consumers alike through our branded and unbranded marketing efforts. Let me walk you through some of our efforts this quarter. For the Ounces Unbranded campaign, our efforts continue. Last quarter, we told you we were the first unbranded contraceptive campaign to launch on TikTok. This was very positive for us, driving increased visits to our unbranded website. We believe this is a strong indication of the interest and underlying need for birth control education.

We focused on reaching hcp's and and consumers alike through our branded and unbranded marketing efforts, let me walk through some of our efforts this quarter.

For the answer on Unbranded campaign, our efforts continue last quarter. We told you. We were the first on branded contraceptive campaign to launch on Tictoc.

This was very positive for us driving increased visits on our unbranded website.

And we believe this is a strong indication of the interest and underlying need for birth control education.

Alfred F. Altomari: We're also leveraging OMSUMDUN to drive awareness of the birth control category, and now we're focused on driving TORLA consideration and trial amongst consumers. This leads us into our branded Twirl app. We believe that a robust brand marketing effort is important to drive awareness and trial of TORILA. Our strategy is focused on reaching women with a multi-channel creative campaign that positions TORILA as the first and only weekly conscious death patch that delivers a low dose of estrogen and meets women at key moments in their day to support engagement with our brand.

We're also leveraging on some done to drive awareness of the birth control category and now we're focused on driving towards a consideration and trial amongst consumers.

This leads us into our branded Tortola efforts.

We believe that on a robot.

Brand marketing effort is important to drive awareness and trials for all on our strategy is focused on reaching women and multichannel creative campaign that positions <unk> as the first.

And only weekly contraceptive patch that delivers a low dose of estrogen.

And which meets women at key moments in their day to support engagement with our brands.

Alfred F. Altomari: With this in mind, we're extending our digital reach by advertising on dating apps, which include Tinder and OkCupid. Over 29 million women leverage dating apps, and the user base skews to Millennials and Gen Z, both of which coincide with the Torla market segment. Moreover, we expect to begin advertising on Spotify, which has a monthly user base of approximately 22 million U.S. women between the ages of 18 and 34. The key takeaway here is that we're strategically rolling out more and more branded consumer marketing communications and resources as we simultaneously increase HCP awareness.

And with this in mind, we're extending our digital reach by advertising on dating apps, which include Tinder and okcupid.

29 million women leveraged dating apps and the user base skus to millennials and Gen Z.

Both of which coincides with the total end market segment Mauro.

Moreover, we expect to begin advertising on Spotify.

Which has a monthly user base of approximately 22 million U S. Women between the ages of 18 to 30 for the key takeaway here is that we are strategically and rolling out more and more branded consumer marketing communications and resources as we simultaneously increased HCP awareness.

Alfred F. Altomari: We expect a stronger incremental branded consumer investment to continue over the quarter and into the quarters throughout 2021, and we look forward to providing you additional updates. Before handing over the microphone to Dennis, I'd like to reiterate our commitment to building a robust women's health care business. We believe that the first step to achieving this is through the growth of TORLA. I'll now turn over the call to Dennis Riley, our Chief Financial Officer, and he'll provide an overview of our financial results and our business update. Thank you, Al, and everyone who is joining us today.

We expect a stronger incremental branded consumer investment to continue over the quarter and into the quarters throughout 2021, and we look forward to providing you additional updates.

Before handing over the microphone to Dennis I'd like to reiterate our commitment of building a robust women's health care business.

We believe this is the first step of achieving this is through the growth of 12 and.

I'll now turn over the call to Dennis Reilly, our Chief Financial Officer, and I will provide an overview of our financial results and a business update Dennis.

Thank you al and everyone joining us today.

Matthew Riley: As Al commented, we're excited about the growth potential of our business, and I'd like to provide you with more clarity around the phasing of our growth for this year. Particularly what we experienced in the first quarter from a financial perspective, a bit more detail on how Twirlist performance has been trending year to date, and some general parameters on how to think about our results for the full year. If you're following along in the deck, I'm referring to sliding.

As Al commented, we are excited about the growth potential of our business and I'd like to provide you with more clarity around the phasing of our growth for this year for.

Particularly what we experienced and our first quarter from a financial perspective.

A bit more detail on how <unk> performance has been trending year to date and from general parameters on how to think about our results for the full year.

For filing along and index.

And referring to slide eight.

Matthew Riley: As Al mentioned, we closed out December 2020 with an initial stocking of $1,200. This represented shipments of approximately 6,500 units of Twirla into our whole state and resulted in nearly $750,000 in net product sales revenue in the fourth quarter of 2020. Wholesalers needed to work down these inventory levels, and as a result, we realized $116,000 in net product sales revenue for the first quarter of 2021. The rate of inventory depletion was broadly in line with our expectations.

As Al mentioned, we closed out December 2020, with the initial stocking of 12 <unk>.

This represented shipments of approximately 6500 units of <unk> into our wholesalers.

And resulted in nearly 750000 and net product sales revenue in the fourth quarter of 2020.

Wholesalers needed to work down these inventory levels and as a result, we realized a 116000 and net product sales revenue for the first quarter of 2021.

The rate of inventory depletion came broadly in line with our expectations.

Matthew Riley: And we expect that wholesaler restocking will likely be reflected in our second quarter 2021 results. We're encouraged by the progress of the sell-through of inventory for wholesalers into the market, and as Al said, by the momentum we are seeing in prescription growth. We believe now that our wholesalers have less than 30 days of inventory on hand based on our current estimated demand level.

And we expect that wholesaler restocking will likely really reflected and our second quarter 2021 results.

We're encouraged by the progress of the sell through of inventory for wholesalers into the market.

And as Al said in the momentum, we're seeing and prescription growth.

We believe now that our wholesalers have less than 30 days inventory on hand based on our current estimated demand levels.

Matthew Riley: Therefore, beginning later in the second quarter of 2021 and throughout the second half of the year, we anticipate our product sales revenue will track closely to the increasing script demand, and wholesale or restocking should more closely reflect retail sales. This aligns with our initial full-year expectations for Trolla, which were based on the assumptions that sales growth would increase in 2021 as product samples are worked through, our prescriber base expands, patient awareness of Trolla increases, refills begin to occur, and overall, we gain traction in the CHC market. Regarding our quarterly costs,

Therefore, beginning later in the second quarter 2021, and throughout the second half of the year, we anticipate our product sales revenue.

Track closely to the increasing script demand and wholesaler restocking should more closely reflect retail sales.

This aligns with our initial full year expectations for <unk>.

Which was based on the assumptions that sales growth would increase and 2021 as product samples are worked through our prescriber base expands patient awareness of <unk> increases for refills begin to occur and overall, we gained traction and the CHP market.

Regarding our quarterly costs are.

Matthew Riley: Our cost of product revenue for Q1 2021 was $1.2 million. This included expenses supporting our manufacturing and distribution efforts, as well as personnel costs and $500,000 of non-cash depreciation expense. We expect these relatively fixed costs will become less significant as a percentage of sales as volume increases. There was no direct cost of product revenue during the three months ended March 31st as all the product that we sold was validation inventory that was previously expensed as R&D in the fourth quarter of 2020. We expect all this validation inventory to be utilized in 2021.

Our cost of product revenue for Q1, 2021 was $1 2 million.

This included expenses supporting our manufacturing and distribution efforts as well as personnel costs and.

$500000 of noncash depreciation expense.

We expect these relatively fixed costs will become less significant as a percentage of sales.

Volume increases for us.

No direct cost per product revenue during the three months ended March 31.

Has all of the product that we sold was validation inventory that was previously expensed as R&D in the fourth quarter of 2020.

We expect all of this validation inventories to be utilized in 2021.

Matthew Riley: Our operating expenses were $15.2 million in Q1 2021, versus $7.6 million in the same period a year ago. We anticipate our second quarter operating expenses to be $3 to $5 million higher, or approximately $18 to $20 million, reflecting increased commercial costs from product samples and Spending on Branded Markets. Our R&D expenses were approximately $2.1 million in the first quarter of 2021, compared to $3.2 million in the same period a year ago. The decrease was primarily attributable to the absence of 2020 pre-validation manufacturing costs for commercial manufacturing of Twirla Bicorium, our contract manufacturer, offset in part by higher clinical development and personnel-related expenses.

Our operating expenses were $15 2 million in Q1 2021.

First and seven 6 million and the same period a year ago.

We anticipate our second quarter operating expenses to be $3 million to $5 million higher or approximately 18% to $20 million.

<unk> increased commercial costs from product samples and spending on branded market.

Our R&D expenses were approximately $2 1 million and the first quarter 2021.

Compared to $3 2 million in the same period a year ago.

The decrease was primarily attributable to the absence of 2020 pre validation manufacturing cost for commercial manufacturing of <unk> led by Korea, our contract manufacturer.

Matthew Riley: Selling and marketing expenses were $9.2 million, compared to $1.7 million in the same period a year ago. This increase in period over period selling and marketing expenses was due to higher costs associated with the activities of Twirla, including brand building and advocacy and development of the company's contract sales. G&A expenses totaled $3.9 million compared to $2.7 in the same quarter a year ago, reflecting higher personnel costs and professional fees in support of the product launch and commercial activities, as well as an increase in stock compensation expenses.

Offset in part by higher clinical development and personnel related expenses.

Selling and marketing expenses were $9 2 million.

Compared to one seven and the same period a year ago.

Increase and period over period, selling and marketing expenses was due to higher costs associated with the activities for <unk>, including brand building and advocacy and development of the company's contract sales force.

G&A expenses totaled $3 9 million compared to $2 7 million the same quarter, a year ago, reflecting higher personnel costs and professional fees and support of the product launch and commercial activities as well as an increase and stock compensation expense.

Matthew Riley: We closed out the first quarter with a net loss of $17.1 million, or $0.20 per share, compared to a net loss of $7.9 million, or $0.10 per share, for the comparable period in 2020. As of March 31, 2021, we had cash equivalents and marketable securities of $40.1 million, compared to $54.5 million of cash in cash equivalents as of year-end 2020. As a reminder, we have $25 million of capital potentially available through our loan facility with Perceptive Advisors, including a tranche of $15 million available in 2021 and another tranche of $10 million, which will be available through June of 2022, both contingent on achieving a predetermined revenue target.

We closed out the first quarter with a net loss of $17 1 million or <unk> 20 per share.

Compared to a net loss of seven 9 million for 10 cents per share for the comparable period in 2020.

As of March 31, 2021.

<unk> cash cash equivalents and marketable securities of $41 million.

Compared to $54 $5 million of cash and cash equivalents as of year end 2020.

As a reminder, we have $25 million of capital potentially available through our loan facility with perceptive advisors, including a tranche of $15 million available in 2021, and another tranche of $10 million, which will be available through June of 'twenty two.

Matthew Riley: We'll continue to monitor our spending closely, and if we need to, we can modify our sales and marketing expenses. Additionally, we have the potential to access additional capital through our existing at-the-market arrangement. Under which we can sell up to an aggregate of 50 million gross proceeds through the sale of shares of common stock. Our team continues to be excited about what lies ahead. We believe we have established and are encouraged by the continued momentum for 12.

Both are contingent on achieving a predetermined revenue target.

We will continue to monitor our spending closely.

And if we need to we can modify our sales and marketing expense and.

Additionally, we have the potential to access additional capital through our existing at the market arrangement.

Matthew Riley: We remain focused on maintaining our disciplined and nimble approach and are focused on making the right investments to encourage strategic growth and maximize shareholder value. With that, we're happy to take your questions. Operators, you may now open up the line for Q&A.

Under which we can sell up to an aggregate of $50 million and gross proceeds through the sale of shares of common stock.

Our team continues to be excited for what lies ahead. We believe we have established and marine Marine and encouraged by the continued momentum for 12.

Operator: Thank you, sir. As a reminder, to ask a question, you'll need to press star 1 on your telephone. To withdraw a question, press the pound key. Please stand while we compile the Q&A list. Our first question is from Dan Busby from RBC Capital Markets. Your line is open.

We remain focused on maintaining our disciplined and nimble approach.

And are focused on making the right investments to encourage strategic growth and maximize shareholder value.

With that we're happy to take your questions.

Steve (Caller): Great. Hey, guys, this is Steve on for Dan. Thanks for taking our questions here. I've got

Operator, you May now open up the line for Q&A.

Steve (Caller): I'll ask them both up front, but the first one I was wondering about.

Thank you Sir as a reminder to ask a question you will need to press star one on your telephone.

Steve (Caller): Can you provide us with a little more color on how the launch is progressing, and in particular, what are you hearing from physicians or patients about the product, any particular pushback they're hearing? But I also think it might be pretty interesting to hear, you know, any feedback from maybe older physicians who've had experience with prior contraceptive patches and how they're viewing Twirl here today. So that's the first question. And then the second question is related, obviously, it's early in the launch, but any type of trends you're seeing with patients with regard to age or maybe different types of BMI.

And my question press, the pound, Keith Keith and Ali compile the Q&A roster.

Our first question is from Dan <unk> from RBC capital markets. Your line is open.

Great Hey, guys. This is Steve on for Dan Thanks for taking our questions here.

I've got two and on I'll ask them both up from the first one I was wondering if you can provide us a little more color on how the launch is progressing and more particularly on what what are you hearing from physicians and patients on the on the product and you would take their pushback you're hearing, but I also think it might be pretty interesting to hear.

Steve (Caller): And along with that, you know, you guys recently released some post-ad hoc data from the SECURE trial, and I was wondering how that data may help physicians potentially prescribe the drug to patients with a BMI between 25 and 30. Thank you.

Any feedback from any older physicians, who had experience with prior conscious that the patches and how they are viewing toilet here today and that's the first question and then the second question is related to obviously, it's early and the launch but.

Any type of trends youre seeing with patients with regard to age or maybe different types of BMI and along with that.

Steve (Caller): The BMI between 25 and 35 and maybe any other type of dynamics we should be thinking about here going forward. Thanks for taking the question.

You guys had recently released some some post AD hoc data from the secure trial and I'm wondering how that data and may help physicians potentially prescribed patients with a BMI between 25 to 35 and and maybe any other type of dynamics, we should be thinking about here going forward. Thanks for taking the questions.

Alfred F. Altomari: Hey Steve, this is Al. You packed a big punch in two questions, so let me do them in the order you asked. So, how's the launch going? So, what are we hearing from physicians and patients? So, it's interesting. I think the group on the phone knows that we're hearing great things from physicians and also patients. And, equally as important, we're not hearing any problems. So, I'll just give you an example

Hey, Steve This is al impact the big Punch and two questions. So let me zoom and the order you asked for.

And it has launched one so what are we hearing from physicians and patients.

Alfred F. Altomari: We had a patch replacement program set up, you know, that if anybody had a problem with one of our patches, I believe as of yesterday, we had three phone calls after multiple, multiple thousands of prescriptions and samples. So, medical affairs, we don't hear many, you know, complaints or any other thing, questions from doctors. So, we hear rave reviews about our products from both patients and physicians, which is really wonderful.

It's interesting I think.

The group on the phone knows that we were hearing great things from physicians and also patients and equally as important we're not hearing any problems. So I'll just give you. An example, we had a patch replacement program set up.

They've made if anybody has a problem one of our patches make this call as we replace it and I believe as of yesterday, we have three phone calls after multiple multiple thousands of prescriptions and samples so.

Alfred F. Altomari: And I think the reason I can point to that, quite frankly, is that what we're seeing is high refill rates. We're seeing our brands getting refills, which is, to me, a surrogate of patients liking the product and staying on the product. So the more we see refills grow, Steve, the more we feel good that, you know, we have, as Matt described, a very healthy brand. And Dennis described that, you know, and I was trying to say that also. So every indicator says that when a patient goes on our drug, they like it. And so we hear nothing.

And medical Affairs, we don't hear many complaints are and any other questions from Doctor. So we here day in and day out rave reviews about our products from both patients and physicians.

Which is really wonderful and I think the reason I can point to that quite frankly is what we're seeing is high refill rates, we're seeing our brands getting refills, which is to me.

Surrogate of patients like and the product and staying on the product. So the more we see.

And Greenfield growth, Steve the more we feel good that we have not other as Matt described a very healthy brands and Dennis described that announced and I was trying to say that also.

Alfred F. Altomari: Your question about older physicians is a very good one. We do get a lot of questions from older physicians about what makes this different than the other patches, or whatever patch we're using. So that always comes up, you know, and if not, our reps proactively bring it up.

So every indicator says that when a patient goes on our drugs they like it and so we hear nothing your question about older physicians are very good one.

Alfred F. Altomari: It's interesting, some of the younger physicians don't even know that patches are available, so we're retraining physicians. And all that was really borne out in our market research. We expected both of those phenomena.

We do we do get a lot of questions from older physicians.

About what makes us different and the other patch EBIT whatsoever patches for the current generics or whatsoever.

And it always comes up and then.

Alfred F. Altomari: So, market satisfaction, patient feedback, physician feedback, you know, everything's green, Steve. So, trends. You mentioned ACOG.

If not our reps proactively bring it up it's interesting some of the younger physicians.

So and even though the patches are available. So we're re teaching physicians and all of that was really born out and our market research we expected both of those phenomenon.

Alfred F. Altomari: You know, we're very proud of that paper that we published at ACOG. So, what we were able to do was use our SECURE trial to look at that cohort of patients between 25 and 30 BMI to say, did we see anything more in there, and can we just give more granularity? And I think you can see in the paper that we were quite satisfied, as were the authors, that TORLA is an effective, you know, use. We don't get a lot of questions, honestly, in the field with the limitation of use for the 25 and 30.

So market satisfaction patient feedback position feedback other things green steep so trends you mentioned, a cog and we're very proud of that paper b debt.

On.

And we was published a day Cogs.

So what we were able to do was use our secure trial to look at that cohort of patients between 25, and 30 BMI to say did we see anything more and there and can we just give more granularity and I think you could see on the paper.

Alfred F. Altomari: And when we present the actual upper bound, being you can't prescribe over 30 off-label, most physicians say thank you. Thank you for telling me the appropriate patients. They really give the company a lot of credit for its trial. And then they say, look, I probably know, you know, that other products have that. And I think the group on the phone knows that after we got the product approved, the other patches were relabelled also with the weight restriction of 30.

We are quite satisfied what the authors.

<unk> is an effective use we don't get a lot of questions honestly and the field with the limitation of use of $25 30, and when we present that to the actual upper balance being prescribed.

Over 30.

<unk>.

Physicians say thank you. Thank you for.

Telling me to appropriate patients.

Alfred F. Altomari: So, and I think as we, the company, stated before, we've seen more and more products are going to really run into this issue. So, from a trending perspective, I think the most important piece of information I can share with the group is that 56% of our prescriptions are coming from new patients who have never been on therapy. That's fantastic.

Really give the company a lot of credit for its trial and then they say look I, probably know that other products have that but I think the group on the phone those debt. After we got the product approved the other patches were re label so with the weight restriction for 30 so.

And I think as we the company stated before we see more and more products certainly really run interest issue. So from a trending perspective I think the most important piece of information I can share with the group.

Alfred F. Altomari: About 25% of the patients have come off birth control pills. So, about 81% of the patients are either new to therapy or have come off the pill. And that's exactly in line with what we thought. About 15% are from another patch, and the rest are coming from other methods.

At 56% of our prescriptions are coming from new patients and I've never been on therapy. The best we can say so that's fantastic about 25 percentage of patients have come off birth control pills. So about 81% of the patients are either new to therapy or to come off the pill.

Alfred F. Altomari: So, the market's responding pretty much the way we've seen everything. We're getting new star patients. We're getting folks that are tired and frustrated with pills. And the market's talking to us. It likes our product. That's a long answer, Steve, but he gave a complicated question. Great, thanks.

And that's exactly in line, what we thought about.

About 15%.

From another patch and the rest is coming from other methods. So the market's responded pretty much the way we've seen everything we're getting new start patients for against folks that are tired and frustrated that Phil pills, and the market softness and likes our product and that's the.

Steve (Caller): Great, thank you; I really appreciate the call over there.

Oren Gabriel Livnat: Your next question is from Oren Livnat of H.C. Wainwright. Your line is open.

Oren Gabriel Livnat: It's obviously very early, and clearly we don't have a real representation of underlying demand given samples, but I've been really encouraged to see the last several weeks' prescription trends in IQVIA. I mean, it might be modest, but it looks like the early stage of a parabolic-looking curve, though I'm no geometry major.

Along on for Steve, but it.

And you gave a complicated question.

Great. Thank you for really appreciate the color there.

No problem.

Your next question is from our and <unk> from H C. Wainwright. Your line is open.

Thanks can you hear me.

Yes, great great.

Okay.

It's obviously very early and clearly we don't have a railroad presentation of underlying demand given the samples, but I've been really encouraged to see.

Oren Gabriel Livnat: So can you help us understand, you know, what sort of coverage these scripts are getting? Are these, you know, these represent Medicaid coverage as a represent your relatively, you know, limited commercial coverage at this point, or, you know, are you perhaps already pushing through or getting some docs to push through prior authorization such that this volume, as it increases, should maybe drag other managed care payers to the table to cover you? Yeah, a terrific question, Oren. So we're also very encouraged by the last couple weeks. So I'm not a geometry major either, but I like when things point north. That's all I know.

And the last several weeks prescription trends and <unk> I mean, it might be modest, but it looks like the early stage.

Parabolic looking curve so on known geometry major so.

Can you help us understand.

And what sort of coverage are these scripts coming through are these these represent the Medicaid coverage and represent a relatively limited commercial coverage at this point or are you, perhaps already pushing through and getting some docs to push through prior off on.

Such that this volume as it increases should maybe drag and other managed care payers to the table to cover you.

Alfred F. Altomari: So no, I think what I would tell you in the last couple weeks, what we believe is happening in the data, is that we continue to grow, number one, our prescriber base. Number two, we're getting new prescriptions. New prescriptions are the lifeblood of us, you know, and any chronic meds, but any meds in general, but also to our refills. Our refills are starting to become very meaningful to our weekly data. You know, I don't want to say it's a floor, but it's nice to know that you're going to, before even the week starts, you're getting some refills from the prior weeks of hard work.

Terrific Crestor and so we're on.

And so we're very encouraged for last couple of weeks.

So I'm not a geometry major either because when things point north that's all on that.

So no I think I think what I would tell you and the last couple of weeks, what we believe is happening and the data that we continue to grow.

Number one our prescriber base number one number two we're getting the new prescriptions new prescriptions are the lifeblood.

And any chronic med, but any meds and general but also to our refills are refills are starting to become very meaningful to our weekly data.

And I don't want to say for floor, but it's nice to know that youre going to before and the week starts youre getting from refills from the prior weeks of hard work. So I think it's been accumulation or and of those three things that debt is generating and momentum and hopefully.

Alfred F. Altomari: So I think it's an accumulation, Oren, of those three things that is generating the momentum, and hopefully, it's a harbinger of things to come. You know, hopefully, it's what we tell our team that look, the more doctors we get, the more they write, the more new prescriptions we get, and if they're happy, as Steve just asked me, you know, on the medication, they keep going back for more as the business starts moving.

It's a harbinger of things to come hopefully, it's still what we tell our team and look for more more docs to get the more they write more new prescriptions, we got and they're happy to Steve Just asked me.

On the medication and keep going back for more and the business starts moving.

Alfred F. Altomari: And then as we tried to educate everybody in the first quarter, you know, we knew, Oren, and all along that, look, the first four to six weeks, we were just laying down samples. You know, as you can see in the data we put out on slide four, there just wasn't much action on refills, and, you know, and new prescriptions were just really slow because of the sampling phenomenon. So I think we need to work past that. I can tell you that your last question, I can say without the data perfectly in my head, very little Medicaid.

And then as we tried to educate everybody and the first quarter, we knew or and and all along that.

Look the first four to six weeks, we were just laying down samples as you could see and the data we put out on slide for sure.

And much action and refills and.

And as the new prescriptions were just really slow because of the sampling phenomenon.

I think we need to work past that and can.

And tell you that your last question.

Say without the data perfectly and my head very little Medicaid business, we most of the Medicaid.

Alfred F. Altomari: Most of the Medicaid wins we just got happened in April. So we're just starting to get a taste of Medicaid, you know, so it's overwhelmingly commercial payers, at least in the first quarter results. The Medicaid businesses are pretty good for us. I mean, it's an important part of the category, one third of all patch business roughly, or, or I think we said 25%, I'll say 25%, if I go over my skis, of that business was sitting in Medicaid, and we couldn't touch it. It just we were locked out.

Wins, we just got happened in April so, we're just starting to get a taste of Medicaid.

So it's overwhelmingly commercial tires at least and the first quarter results for Medicaid businesses is pretty good for us I mean, it's an important part of the category one third of oil patch business roughly or debt.

I think you said, 25%, let's say 25%.

Price over my skis.

That business was sitting.

And Medicaid and we Couldnt touch it.

We were locked out so well.

Alfred F. Altomari: So, boy, it's nice to see those 20 states open up in Texas, coming right behind it. These are big markets for us. So we're, we also think that'll play into the, you know, future uptake, if you will. And your last question, look, we're seeing positions step up, and the plans we have good access to, obviously, it's easy, but we're seeing positions step up and, you know, what you're calling a prior offender, but they're allowed under the Affordable Care Act to ask for our brand, and they're, they're, they're speaking into it.

It's nice to see those two states open up and Texas coming right behind that these are big markets for us.

We also think that will play into that.

And the future uptake if you will and your last question look we're seeing physicians and the plans we have good access to obviously, it's easy, but we're seeing and physician step up and see and.

<unk>.

You are calling on prior off but they are allowed on the affordable care Act to ask for our brand and they're speaking into it. So we're seeing that and that's where especially the sterling organization and helps us out for them.

Alfred F. Altomari: So we're seeing that. And that's where the special Sterling organization helps us out or, you know, fight through some of those prior offs, if you will. So we're seeing positions that, hey, this brand is worth it; I'm going for it. So now, we'd like to get more coverage, and we'd like to pick up more accounts on both the commercial side and the Medicaid side, but boy, it's nice to start the second quarter of the line point north and, you know, that Medicaid business and the commercial business are still clicking along. So I think it's a series of things. I wish I could point to one event.

On a fight through some of those.

Fire off if you will so we're seeing physicians ahead of trends work and I'm gone for it so wed.

And we'd like to get more coverage and we'd like to pick up more accounts and both the commercial side and Medicaid side, but it's nice to start the it's nice to start the second quarter with the line north Orange and add on.

On Medicaid business and the commercial business still clicking along so I think it's I think it's a theory, but other things I wish I could point to one event and then last thing I would tell you like we havent spent much money and the first quarter and brand and I think you can tell that in my script, we throttled back we said, let's wait for the market is ready for all the consumer insights on was mentioning and the extra spend.

Alfred F. Altomari: And then last thing I would tell you, like, we haven't spent much money in the first quarter, and Brandon, I think you could tell that in my script. We throttled back. We said, let's wait till the market's ready. So all the consumer insights I was mentioning, and the extra spending, it's all coming in the second quarter. You, you haven't seen the benefit of that yet. So hopefully, that'll continue our momentum, if you will.

And it's all coming and the second quarter U you've not seen the benefit of that yet so hopefully that will continue.

Alfred F. Altomari: I just didn't think the market was ready. So we held back on some of our bigger spending on HCPs and the branded stuff until the market was in better condition. I wanted to see a bigger beachhead of doctors.

Our.

And momentum if you will I just didn't think the market was ready. So we held back on from our bigger spending on HCP is and the branded stopped until the market was better condition I wanted to see a bigger beachhead a doctor so were ready now.

Oren Gabriel Livnat: So we're ready now. And if I could have a quick follow-up, you know, because obviously, we want to, you know, even though this doesn't translate to revenue yet, as you work through inventory and, you know, samples, but when we try to think of the run rate that we keep track of as your prescriptions continue to climb, we need to plug in some sort of normalized value per script and net value per script number.

And if I could ask a quick follow up because obviously on a even though it doesn't translate to revenue yet as you work through inventory and.

And the samples but.

Let me try and think of the run rate net we keep track of that day prescriptions continue to decline and we need to plug in some sort of normalized value per script in net value per script number. So I know, it's early but given where you see these scripts are coming from and the contracting that you've put in place and Medicaid.

Oren Gabriel Livnat: So you know, I know it's early, but given where you see these scripts are coming from and you know, the contracting that you've put in place and Medicaid, ballpark, can you give us any kind of guesstimate? You know, what's the normalized run rate? Yeah, I could help you a little bit.

Ballpark can you give us any kind of guesstimate.

What's a normal run rate.

And help you a little bit I think Dennis I'll take a shot anything you can quantify being what.

Alfred F. Altomari: I think Dennis, you know, I'll take a shot, Dennis, and you can clarify that we got some revenue in the first quarter, right? So the channel is beginning to work down, I know, it's very symbolic of the amount of money we put on the table, but it's indicative of, you know, towards the end of the first quarter that the channel was kind of, you know, getting more normalized; we would expect by the end of this quarter that we're really almost on an up on a one for one basis. So as we sell a unit, they should stock a unit, give or take. Now, you know, we're, so we're very hopeful.

We got some revenue on the first quarter right. So that channel is beginning to working down I know, it's very symbolic and Ah.

The amount of money, we put on the table, but it's indicative of towards the end of the first quarter that day channel was kind of.

And getting more normalized we would expect by the end of this quarter that were really almost going on.

<unk> hundred one for one basis, so as we sell units Asian stock a unit give or take now.

And so we're very hopeful so I think the second quarter cleans up and out of <unk>.

Alfred F. Altomari: So I think the second quarter cleans up, you know, the normalization or, and if you will, I think the one thing we'd like to point out that I think is worse, and again, I'll go on slide four, the cycles. The cycles. Every time, every time we get a script, we get about 1.3, you know, cycles, so we get more than one cycle. So if you think of the value of a script, it's not 159 or 75, whack; it's about 210 or 215. Whatever. So, the value of a script is starting to become important to us. So we'd like to see that cycle dispense number continue to grow.

Amortization is on if you will I think the one thing we'd like to point out that I think its worst and again I'll go on slide for the cycles to cycles. Every time every time, we get a script, we get about 1.3.

And cycles, so we get more than one cycle.

So if you think of the value of a script, it's not $159 75, WAC is without <unk> 10 of $2 15, whatever so that so the value of a script and starting to become important to us so we'd like to see that cycle dispense number to continue to grow.

So I think our and I think the channel gets or normalized <unk>.

Second quarter and.

Matthew Riley: I think, Oren, I think the channel gets normalized in the second quarter, you know, and I think in the third quarter onward. I don't know, Dennis, did I get that right? I mean, yeah, you got it right. I mean, it's normalizing now, really. I'd say by the end of May, we're shipping pretty close to demand levels. They should all be equalizing out.

For the third quarter onward, and I think Thats, what Dennis was saying I don't know Dennis and I get that right.

And you got it right I mean, it is normalizing now really I'd say by the end of May.

We're shipping.

It's pretty close to demand levels, they should all be and putting out.

Alright, alright, thanks I appreciate it.

Thanks Lauren.

Your next question is from Leland <unk> from Oppenheimer. Your line is open.

Hey, Curtis Island, Dennis Thanks, very much for the day uptick congrats on the progress.

Matthew Riley: Yeah. All right. All right. Thanks. I appreciate it.

Two questions for me first on the reimbursement side it sounds like on your progress. So far has been good at least as good if not even a little bit better and.

Leland Gershel: Your next question is from Leland Gershel from Oppenheimer. Your line is open.

Leland Gershel: Hey guys, Alan Dennis, thanks very much for the update, and congratulations on the progress. Two questions for me: first, on the reimbursement side, it sounds like your progress so far has been good, at least as good.

And what you have and I believe you had kind of given us from soft indications around where you expect it to be on reimbursement progress over the the initial kind of near one to two years with the lunch period have there been any areas, where you've had pushback or is it just simply the nature of the process that you've been going through the states and the.

Alfred F. Altomari: and Scott Coiante, Agile and Matthew Riley, Agile and Scott Coiante, Agile and Scott Coiante, Yeah, really good question. I think at this point, you know, we think we're chipping away at this, you know, the wins we've got in Medicaid certainly add up, you know, a nice bucket of lives. So I think we're being very scrappy, you know, and I think looking for every opportunity to make Torolo available for women. Look, the actions still at the PBM level. That's the game changer.

And we could actually be kind of at the price.

And you've covered lives.

And a 21, which I think will be pull a bit ahead of prior and then other follow ups. Thanks.

Yes, it really good.

Good question I think at this point.

And we think we're chipping away at it.

The wins, we've got and Medicaid certainly add up nice.

Bucket of lives so.

I think we're being very scrappy.

And I think looking for every opportunity to make <unk> available for women.

And the actions both the ppm level that the game change and we've got one <unk> and we've got.

Alfred F. Altomari: We've got one PBM we've got, you know; we're in a great position with the two other ones, they're okay. But until we get on national TV coverage with those, it's hard to pick up, you know, huge, huge wins. But even though the PBMs kind of, you know, rule the roost, you know, Leland at the high level, it's up to the individual plans under them. So even though we're not on contract at the national level with PBMs, we're seeing a lot of coverage, you know, and availability.

And a great position with the two other ones there, okay, but on until we get on and national coverage with those its hard to pick up a huge huge wins for you.

These and other pbms kind of.

Rule, the roost legal and at the high level, it's up for the individual plan Thunder them. So even though were not on contract national level for PVM, we're seeing a lot of coverage and availability and.

Alfred F. Altomari: And then just to remind everybody about, you know, sort of what Oren was asking me, you know, in the Affordable Care Act, even if we're like all formulary or excluded from formulary, if a physician wants the product, he writes what's called a letter of medical necessity, and it's on our website. It's on our twirler.com website. You can see it.

And then just to remind everybody on the heels sort of what our was asking me on them and Armenia.

Affordable Care act either for like all formulary or exclude from formulary for physician once the product. He writes what's its called a letter of medical necessity and it's on our website is one on <unk> Dot Com website, you could say, it's relatively simple form and.

Alfred F. Altomari: It's a relatively simple form that says, "Look, I want this patient to get this product." And, you know, by the way, the Affordable Care Act is designed; the physician is supposed to get their patients' wishes. So this is where, you know, at the, you know, kind of hand-to-hand level, we're getting, you know, these scripts to go through, and that's where Sterling's Dave will help us. They give patients and providers really great service, both with these letters of medical necessity or, I mean, Leland and also, you know, give the patient some extra, you know, hand-holding if they need it or they also, and then if the patient wants drugs shipped to them at their home, we'll get it to them; we'll ship it anywhere in the country for them.

That said look I want this patient and get this product and.

And our body by the way the Affordable Care Act and design and the physicians as opposed to get their wishes. So this is ware.

Kind of hand to hand level, we're getting these scripts to go through and Thats, where Sterling day will help us they give patients and providers nearly great service. Both of these letters of medical necessity and Leland and and also give the patient from some extra handholding, if they need them or are they also and then if the patient wants drug shifts from that.

For home will get a total ship and anywhere in the country for them. So they get a lot of beds up very big value add service.

Alfred F. Altomari: So they get a lot of, that's a very big value-add service. So I think for us, Leland, until we can get the brands to the point that we can get them on national coverage, you know, we're going to keep chipping away at these local wins, if you will. And the GPO agreement last quarter, which we mentioned to you all, was another example. So we're swinging for the big ones and we're taking the singles too, you know, but I think we're, I think what you can expect from us is that we're still at it, and we can, we would expect it to continue to grow.

For it and frankly on anything until we can get the brands to the point that we can get it on the national coverage, we're going to keep chipping away at these local wins and if you will.

And the GPO agreement last last quarter, we mentioned to you all that was another example, so we're swinging for the big ones and for taking the singles too but.

But I think where and I think we can expect from US is we're still at it and we can and would expect it to continue to grow.

Thanks and.

And it's still relatively early days, but I'm sure you are learning a lot.

Alfred F. Altomari: Thanks. And, and, you know, I know, so

And you go out with all the different.

Leland Gershel: [inaudible] of your different campaigns in terms of how much, you know, you need to put in terms of the spend and how much you think you're getting out, and how that may affect kind of your decisions about marketing strategy as we, you know, get through the rest of the year and beyond. Yeah, good question.

Avenues.

And by which you can reach the mine.

On the consumer these days online and and other advertising just wondering if you've commented all on kind of where youre seeing the effectiveness.

Of your different campaigns in terms of how much you need to put in in terms of the spend and how much. You think you are getting out and how that affects kind of your decisions for for marketing strategy as we get through the rest of the ear and point, yes. Good question.

Alfred F. Altomari: I mean, you know, I think everybody on the call knows we're big fans of activating consumers. I think we made two strategic decisions that, in hindsight, I think were the right ones. Number one, we decided to use samples instead of vouchers.

Yes.

On the everybody on the call knows we're big fans of activating consumers.

I think we made two strategic decisions.

And in hindsight I think for the right ones number one we decided to use samples and set of vouchers. So we said, let's just kept a doctor right.

Alfred F. Altomari: So we said, let's just get the doctor to write a sample, use a sample. It'll slow down the flow to patients and to the pharmacy, if you will. But once they get there, we get paid for everything. So I like that.

Use of sample as slow down the flow of patients to pharmacy, if you will but once they get there we get paid for everything so I like that even though at times, sometimes and we were considering using like pharmacy vouchers for so we thought it was the right things and so I think that was.

Alfred F. Altomari: Even though at times, sometimes we were considering using them like pharmacy vouchers, so we thought it was the right thing to do. So I think that was, I'm really glad we did that. But then, look, I think, you know, for us to spend big on TV or even radio, while it feels good, you know, you get your TV ads. And I was watching TV last night, and an ad came on for a contraceptive product.

Really glad we did that.

And look I think for us to spend big spend on TV or even radio while feel good and you got you.

And at Cvs and I was watching TV last night and that came across for our conscious about the product and I'm like I'm not the right target.

Alfred F. Altomari: I'm like, I'm not the right target. So, um, you know, we just aren't big believers that, you know, most of these young women don't even own TVs. And, you know, um, so we think the streaming platforms like Spotify, you know, TikTok, and all those ones where we could target the branded advertisers are a better spend of the money.

So we just aren't big believers that most of these young women don't even not on Tvs and.

So we think the streaming platforms like Spotify.

Tick tock and all of those ones, where we could target the branded advertising Cleveland is a better spend the money we have a higher degree of confidence.

Alfred F. Altomari: We have a higher degree of confidence. That's a better target. And we, you know, so for us, that's what's exciting. And, you know, we're seeing some early signs that our early work there is really paying off. I mean, ultimately, it's great to say, hey, consumer stop your ad, we want to see if we're getting patients into the door. And we're starting to hear with our ears, and we're starting to do some some work on this, that doctors are starting to see patients come in, you know, I'm asking for a toilet by name.

Better target and.

So for us that's what's exciting and we're seeing some early signs that our early work there is really paying off.

Ultimately, it's great to say, hey, and consumer saw your AD, we want to see if we're getting patients and the door and we're starting to hear with our ears and we're starting to do some from some work on this the doctors are starting to see patients come in.

And I'm asking for it for Ela by name and so they saw the AD and arts for all our websites and starting to light up with people coming in so relatively early days, but I think there are other decisions and Leland, we made and let's spend our money more and more smartly and digital where we think our eyeballs are and then we have a higher chance of on.

Alfred F. Altomari: So they saw the ad and our toilet websites, which were starting to light up, you know, with people coming in, so relatively early days, but I think they're the decisions that we made saying, let's spend our money more smartly and digitally where we think our eyeballs are. And then we have a higher chance of, you know, activating her to either come to our website or, even better yet, go to a doctor.

Activating hurt either come to our website or even better yet total doctor so.

Alfred F. Altomari: So I hope that next, you know, quarter, I'll be able to tell you a little bit more. But you know, we're full bore now in the second quarter, or if you are DT, social spending. I don't even know what it's called anymore. But we're calling it pretty, you know, heavy. And also with the physicians, we've held back on some spending in the first quarter. That's why we're signaling the second quarter may be a little stronger from a spending perspective, same thrill with the healthcare providers. We are in right now only deploying some of our more aggressive campaigns, even to them. We just wanted to give our reps that beach ad to get out there in the first quarter. So, you know, we wanted to see the brand get its legs on there. And then we do. And that's why we're turning it all around now. So we like what we see. Thank you.

I hope next quarter I'll be able to tell you more but we're full bore now and the second quarter. We are if you are DT social spending I don't know call it anymore, but work on pretty heavy and also with the physicians we've held back on some spending and the first quarter and Thats why were signal and the second quarters and a little stronger from a spending perspective. Thanks.

Thrilled with it to health care providers, we are and right now only deploying some of our more aggressive campaigns even for them. We just wanted to give our reps at beach had to get out there and the first quarter. So we wanted to see the brand and get us lagged on there and and we do and that's why we're turning it on now so we like what we see.

Got you. Thanks, Thanks, so much on.

Leland Gershel: Thanks so much, all.

Youre welcome frankly.

Tim Hugo: Your next question is from Tim Hugo at William Blair.

Your next question is from Kim <unk> from William Blair. Your line is open.

Tim Hugo: Thanks for taking the question. And I believe Q4, the $749,000, was mostly stocking. Can you just confirm if... That's around how much stock we should expect in Q2 as well. And then looking at the number of HCPs, you ended the quarter with 850. But I think in your prepared comments, you figured now about 1200. So that's 350 in April. So kind of where do you expect that number to trend throughout the next couple quarters? Yeah, bigger Tim is the number I expect. No, no, you're my math guy. Keep me honest.

Thanks for taking my question and.

And I believe Q for the 749000 was mostly stocking can you just confirm it.

And that's around how much stocking, we you should expect and Q2 as well.

And then looking at the number of ACP is you ended the quarter at $8 50, but I think in your prepared comments, you're thinking now about 1200.

Yes, $3 50, and April so kind of where you expect that number to trend and throughout the next couple of quarters.

Yes, bigger bigger agenda and the number is.

No.

And just yet.

No I know youre on.

And my math Guy and keep me on it.

Alfred F. Altomari: Now, you know, we're picking up about 100 new doctors a week, give or take, you know, some weeks, you know, some weeks 90, some weeks 110, but let's say about 100 doctors a week. That's awesome. That's awesome.

We're picking up about 100 per 100, new doctors, a week give or take some leaks from.

90 days and weeks 110, but let's say about 100 doctors are weak.

That's awesome, that's awesome and other new new.

Alfred F. Altomari: You know, they're new writers, hopefully, they've gone through their samples, and now they're writing scripts. So that, I think I mentioned before, the group that's an important metric for me. I mean, that's how we grow this business, you know, getting doctors to say, "Okay, I'm done with the samples, let me start writing scripts." So I think that is an important one.

New riders hopefully they've been for their samples and other writing scripts. So I think I mentioned it before.

The group before and Thats, an important metric for me I mean, thats, how we grow this business getting.

Doctors that will get done with the samples let me start writing scripts. So I think that is an important ones.

Alfred F. Altomari: Yeah, I mean, in the fourth quarter, Dennis, I'll say, but everything was stocking. I think we had like 10 scripts. I mean, it's stocking.

And in the fourth quarter, Dennis I'll say, it but everything was stocking I think we had like 10 scripts I mean, it's backing so that net sales reported was.

Alfred F. Altomari: So that net sales reported was, you know, us filling the wholesaler shelves, if you will. And you could see that they've worked it down in the first quarter, a lot of it, you know, and they're actually rebuying inventory from us. We need, you know, we posted a small quarter, but it's still good to see at the end of the first quarter that we're saying, okay, we've worked down the shelves, and the product's making its way into the pharmacy and consumers' hands.

And so us filling the wholesaler shelves, if you will and and.

And you could see that they've worked it down and the first quarter a lot of it.

Theyre actually re buying inventories from us.

As for quarter, but it's still good to see and the other first quarter. There were saying, okay. We work down the shelves and the products, making its way and the pharmacy and consumers and so as Dennis mentioned, we're not quite done yet so we think it'll be fully normalized and.

Alfred F. Altomari: So as Dennis mentioned, you know, we're not quite done yet. So we think it'll be fully normalized in, in, by May. And then from that point on, Tim, it's almost like a one for one. Every script you see, we should get a sale for it, give or take, give or take. But that's the way it should work. And I think we're optimistic that they've worked out the bulk of that. And then you should be able to just look at scripts and volumes and say, okay, that should be give or take unless, and there's some channels that we don't, that don't report, you know, as we know, our GPL agreement doesn't report, but other than that, that should be directionally what you should be seeing later in the second quarter and particularly into the third.

And May and then and then from that point on Tim It sounds like a one for one day every script you see we should get a sales force give or take.

Give or take okay. That's correct me here.

Okay.

The way it should work and I think we're optimistic that they've worked down the bulk of that.

And then you should be able to just look at script volume and say, okay, that's share be give or take and less and there are some channel that we don't that don't report and as we know.

Our GPO agreement doesn't report, but other than that that should be directionally, what you should be seeing.

Later in the second quarter, and particularly for the third.

Okay and.

Looking at the cash burn I think for.

Over $14 million on the quarter.

With a direct with social kind of ramping up.

And that's going to ramp as well, but until quite understand okay.

Tim Hugo: Okay, and, you know, looking at the...

How efficient and save and obviously direct to social a different day.

Super Bowl ads.

Tim Hugo: You know, looking at the cash burn, I think they lost over $14 million in the quarter.

Yes satisfy.

For what you were guiding for the second quarter, because since the first quarter was light Tim.

Tim Hugo: with the Direct-to-Social kind of ramping up, I assume that's going to ramp as well.

And because we didn't have we have to buy samples. If you will boost from our from corium and when and as I mentioned, we didn't do too much on the way of consumer spending so Dennis wants you walked him for what.

Tim Hugo: [inaudible] by some more samples. We're going to do some more sampling.

And the reason why we're sitting on the second quarter being up.

Matthew Riley: And we're also going to kick-up to Branded Marketing in Q2, as Al said. So, you know, we anticipate it could be 18 to 20 million dollars. Now, the offset there is that all roads lead to revenue, right? If we continue to see, you know, the revenue crank in, we should see cash flowing in. You know, how fast revenue grows is kind of our, you know, our whole challenge going forward.

Yes.

As Tim said, we burned about a little over $14 million net in Q1.

Opex was $15 million.

A little bit right around there.

Fights.

<unk> and more samples, we're going to do some more sampling and we're going to also.

Kick up the branded marketing in Q2.

As Al said, we anticipate it could be $18 million to $20 million.

Now the offset there is all roads lead to revenue right.

Alfred F. Altomari: So we think of the third quarter, Jim. That's our goal. I mean, our third quarter revenue line, as Dennis was saying, our margin line needs to work for us, right? So that's what we're expecting.

We continue to start to see.

The revenue crank and we should see cash flowing in.

And how fast is the revenue grow.

Alfred F. Altomari: So the first quarter, we didn't draw off any margin because it was insignificant. And second quarter onward, the revenue line has got to work for us. But we're seeing on the ice, I should say, the sampling cost is, I don't know, Dennis. We're going to use a complicated term called lumpy. So some quarters we need to buy more samples, some we don't. Right.

And as kind of our.

Our whole our whole challenge going forward there.

I understand.

We think and the third quarter, Tim Thats, our goal and our third quarter. Our revenue line as Dennis was saying our margin line should <unk>.

The work for US right. So that's that's where we're expecting sort of first quarter we for.

Profit margin because it just.

And significant.

And the second quarter onward, the revenue line is going to work for us.

And so but we're seeing on the and I should say the sampling cost of.

Matthew Riley: Lumpy is a technical term, so I understand it.

Nazibur Rahman: Your next question is from Nev Rahman from Axiom Group. Your line is open.

And Thats, where it is a complicated term called lumpy. So some quarters, we need to buy more samples from we don't.

Nazibur Rahman: Hi guys. Thanks for taking the question. I want to talk a little about your pipeline. At this point, have you guys decided which asset you plan on advancing next and what's the next asset or what's the timeline for potentially moving an asset into the pipeline? I'm sorry, into the clinic.

And this didn't want to pay for a bachelor's for sale.

Right.

So I understand it's a lumpy other technical churn so I get it.

And so for the clarity.

[laughter].

Your next question is from NAV, Vermont from Maxim Group. Your line is open.

Hi, guys. Thanks for taking the question I want to talk a little about your pipeline at this point and have you guys cited which asset you guys plan on advancing next day and what's the next asset or whats the timeline for potentially moving and asset into the pipeline and I'm, sorry, and so the quite yet.

Alfred F. Altomari: Yeah, I mean, we, you know, on our website, we say, you know, we were saying, hey, everything's on hold for a while. That really isn't terribly far behind, you know; we are doing work on our pipeline now, you know; we are spending some money, we've activated, and we're doing some, some, you know, formulation work and some, some, PK work, but we So as far as I'm concerned, we have activated our pipeline, but we just, we haven't selected our final clinical candidate yet. So our intention is in the next couple of quarters to spend a little bit of money, you know, to develop them along. We'd like to get some feedback from both parties.

Yes.

And on our website, we say.

And we're saying Hey, everything is on hold for a while that it really isn't.

<unk> back on.

Doing work on our pipeline that we are spending some money we've activated and we're doing some some formulation work and some some PK work, but we're not spending big clinical dollars. So as far as on fixed and we have activated our pipeline, but we're just we haven't selected our final clinical candidate yet so.

Our intention is for the next couple of quarters of spend a little bit of money.

Develop them along we'd like to get some feedback from both we've done from market research on so I should say with consumers and physicians for <unk>.

Alfred F. Altomari: We've done some market research also, I should say, with consumers and physicians. So the good news is that all of our pipeline seems to be of high interest, both from physicians and consumers. And Dr. Korner, our chief medical officer, has done great work, and as he has a development plan for each one of them. So I think before we announce our clinical candidate, you know, I think we need to have a conversation with the FDA so we understand, you know, the repercussions.

Good news is all of our pipeline seems to be high interest both from physicians and consumers and Dr corner, Our Chief Medical Officer has done great work and Isaac and the development plan for each one of them. So.

So I think before we announce our clinical candidate.

And that we'd like to have a conversation with the FDA. So we understand.

<unk>.

Alfred F. Altomari: I can't see us, you know, going into the clinic, even if I do a phase two, possibly to the end of this year or into next year, you know, but we're going to continue. You should see us spending a few bucks to continue to develop them. Paul and his team have activated them. They've done more work in the last three months than we might have done in three years. You know, I mean, honestly, they've done some really good work, but we still haven't pulled the trigger on, you know, taking the one to the clinic until we get some of this PK work under our belt and get a little bit more regulatory feedback.

It reprice I can't see us and our.

Go on into the clinic.

And even for a phase III, possibly and this year or into next year.

But we're going to continue you should see a spending a few box can you and.

So it's about and Paul and his team of activating and they've done more work and the last three months and we might've done and three years.

I mean honestly and they've done some really good work, but we still haven't pulled the trigger on lighting the ones for the clinic until we get from this PK work under our belt and just a little bit more regulatory feedback.

Nazibur Rahman: Alright, you guys don't have to file another IND, right, with TURLO approved?

You guys don't have to file another IMD right with Tyler approved.

It depends on for.

Alfred F. Altomari: It depends on which one we would do. So, like, the one that's the extended regimen would be, you know, a follow-on, if you will, to the twirler and the A. The progestin-only treatment is a little bit different. Depending on how we go with the progestin-only treatment, we may have to file another IND. So it really depends on what candidate you are looking at. But in general, they're generally thought to be line extensions, but the progestin-only candidates may require a new IND. It's really that different. So that's the work we're still doing right now. But if it's the other two, more than likely, they're under the same IND.

It depends on what one we would do so like the one that the extended regimen would be.

Follow on and if you will to the squirrel or toilet NDA.

Does the project and I only have a little bit different depending on the way. We go with progesterone only we may have to file and the other iron day. So it really depends on what candidate but in general for generally thought to be line extensions, but then for.

Jeff the only may require new R&D, its really that different so that's the work we're still doing right now, but if it's the other two more than likely are under the same line.

Nazibur Rahman: I'm going to have to break it down for you guys.

And the allowance for taking my questions.

Operator: I'm not a regulatory guy, so take that with a grain of salt, but I think I'm right. I think I'm right. All right, sir, thanks.

Moving on our regulatory guidance I'd like to take that were granted small, but I think I'm right I think on.

Alright. Thanks.

Operator: If there are no questions over the phone, please call us. Back to you.

And there are other questions over the phone presenters.

Ruth.

Alfred F. Altomari: Back to you for your closing remarks. Great.

Back to you for closing remarks.

Operator: Thank you, Operator. So I'd like to close today by saying that we think we have the building blocks in place right now for continued growth, and we believe we're on track to achieve our near-term goal. We wanted to be a real serious player in the multi-billion dollar U.S. hormonal contraceptive market. We continue to implement our commercial plan, as you heard in the call, we're going to continue to work on expanding coverage and reimbursement and access for our brand in the United States and working through all the channels, you know, both from the ACP side and the consumer side, and also in the supply chain to make sure TORL is available to as many women and many prescribers as we can in the United States.

Great. Thank you operator.

So I'd like to close today by saying that we think we have the building blocks and place right now.

For continued growth and we believe we are on track and near term.

To achieve our near term goals, we wanted to be twirled it'd be a real serious player and the multibillion dollar U S hormonal contraceptive product.

We continue to implement our commercial plan as you heard on the call.

We continue.

Continue to work on expanding coverage and reimbursement and access for our brands and the United States and.

And working through all the channels both on the HCP side and the consumer side and also on the supply chain to make sure. It's for all of the available for as many women and many prescribers as we can the United States. So I'd like to thank everybody for joining us on Macau and be well and we're looking forward to giving you more updates and maybe down the road, we'll actually see each other sometimes.

Operator: So I'd like to thank everybody for joining us on the call. Be well, and we're looking forward to giving you more updates. And maybe down the road, we'll actually see each other sometime. So in the meantime, be safe, and thanks again for dialing in.

And.

And the meantime be safe and thanks again for dialing in thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

This concludes today's conference call. Thank you for participating you may now disconnect.

[music] and.

And.

And.

[music].