Q1 2021 TherapeuticsMD Inc Earnings Call
Ladies and gentlemen, thank you for standing by today's conference is scheduled to begin momentarily until that time your lines will again be placed on music hold thank you for your patience.
[music].
Good morning, ladies and gentlemen, thank you for joining us for therapeutics empty first quarter of 2020 financial results Conference call. Following prepared remarks from the company, we will open the call for questions.
Oh, and now like to turn the call or the therapeutics empties Vice President of Investor Relations, Nicole Ocean or Nicole.
The morning, everyone. Thank you for joining today to discuss our first quarter of financial original and business update this morning therapists and be issued a press release announcing our first quarter of financial results. The press release is available on the company's website therapeutics and D dot com and the investors and Mediaset.
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His call from Therapeutics M D R Chief Executive Officer, Robert and UCL, Chief Financial Officer Jeans, Director, Keith Commercial officer, Don how cough, and Chief strategy and performance Officer, Mitchell Crap and I would like to remind everyone that certain statements made during this conference call me.
The new.
Lower dose of <unk>, five 100 of flight Uva and have a meeting set in may to discuss next steps.
The company continues the body care divestiture process to unlock shareholder value.
We are creating significant revenue opportunity with two new live customers of third scheduled to launch and the fourth quarter and of pipeline with approximately 20 potential new deals with.
With this progress by the care continues to build on this foundation to become a freestanding and rapidly growing entity and the new sector with no established leader.
Most importantly.
Q1 year over year financial improvement was significant with increasing revenue growth, while lowering operational expenses all in the midst of of pandemic I'll now turn the call over to James to discuss more details James.
Thanks, Rob and good morning, everyone.
Turning to slide five our net product revenue for the first quarter was $19 $6 million, which satisfied our first quarter revenue covenant.
This was a 60% increase and product net revenue from the first quarter of 2020 that was primarily driven by an of ore which had only just been launched.
And of Vera net revenue per unit decreased to $1071 because of increase of rebates owed.
Leveraged as revenue grows we expect to make investments this year to improve our supply chain enhanced marketing and strengthen digital capabilities related to commercial initiatives.
With these investments, we expect our highest spending occurring and the second quarter.
Net cash used and operating activities was $38.4 million for the first quarter of 2021.
Our debt balance decreased to of 183 $9 million, resulting from of $50 million principal repayment made during the first quarter.
Overall I continue to be pleased with our financial performance and believe we are well positioned to execute on our commercial plans to drive our growth and 2021.
And I would like to turn the call over the dawn to discuss our commercial progress Dawn.
Thank you Jane and let.
And let me start with Hannahan.
<unk> Ain't changed the continued growth of and if any of this past year, even and the face of the <unk>.
Range brought about by the pandemic.
Year over year growth was 164% and sequential TR ex Coath was five per cent the quarter over quarter of growth of meaningful given that historically first quarter of volume and net revenue per unit or lower than the fourth quarter levels. As a result of high deductible plans and co pay reset at the beginning of these new.
Of the year.
Net revenue per unit came in and approximately $1100 as expected.
In addition to volume and net revenue growth, we saw a 17% increase and prescribers and the first quarter of 21 vs. The fourth quarter of 2020 and another continued positive trend.
Moving to five nine.
I am pleased to show you that and of error is gaining market share from across the spectrum of birth control product net methods more than half of <unk> of patients are new to range.
As you can see with the growth and queue for the Q1, the percentage of and of air patients who of switch from Iuds are and plants is now at 18%.
And we believe this data is compelling as it suggests and unmet need for a long acting procedure free contraceptive, which and <unk> is now filling.
Any of the mass market form of launches in the past 18 months. The reason I'm highlighting is that it shows the impact of the COVID-19 restrictions on the launch brands shown including birth control products with the growth rates in 2020, one year to date being only and the single digit tip.
Typical launch brand trajectories were much higher and the pre COVID-19 world, but now our challenge to grow when using traditional approaches only.
Turning to slide 13.
Although the various constraints imposed by the pandemic have been challenging. They have also created an opportunity to focus more heavily on the consumer as the catalyst to drive demand.
As a company we continue to adapt accelerating our use of digital platforms, such as social media virtual public relations events, and telehealth to convert consumer interest and anniversary to filled prescriptions and a virtual world.
On slide 14, the funnel on the left shows the path from the initial interest we generate from our consumer campaigns to the eventual number of patients who fill the prescription through online or telemedicine channels. The main takeaway here is that interest is high but we have considerable op.
Fortuity to increase access to patients who want anniversary and every piece of the funnel.
Let's look at each piece of the funnel and how we plan to accomplish.
Starting at the top of the funnel on slide 15 and of air and messaging is impactful and relevant to consumers. We know this because we have achieved metrics at or above the industry benchmark for click throughs to the website. Most recently, we supported vagina of appreciation day, which resulted in a 300.
And 80 per cent increase and those searching for and of ore on line and boosted our daily website visits by 35 per cent.
Bottom line, we understand how to drive interest and plan to continue to do so throughout the year.
Turning to slide 16, now comes the opportunity to help women and better access and avera.
We know that of those who visit anniversary of dotcom only about 2% start the process of access and avera on line to move the needle unhealthy more women, who want anniversary of receive it we have launched additional options to increase access for patients who may not be able to visit their prescriber in person.
One.
Moving to slide 17.
The next step as shown on the funnel is helping women, who want an <unk> to receive a prescription right now about 20% complete the process to receive a prescription for anniversary and we believe that improving this percentage is about improving the process flow for women to make it easier to connect with the health care.
Provider, who can write the anniversary of prescription.
Finally on slide 18, once the N of error prescription is written and we are actively working to increase access to help get the prescription filled our data shows that only 45% of women are able to successfully fill their prescription and at this stage. We aim to help more women accomplish the step by Utah.
Life and patient assistance tools through via the care just last month, we launched an initiative to accelerate this effort for <unk>.
Moving to slide 19, which is the visual once again of the complete funnel. We believe the small changes that I have described that we are making at each part of the funnel will drive significant increases in women's access to anniversary throughout the year and the growth of the anniversary of brand.
Turning to slide 20, as Rob mentioned in the first quarter of 2021 and three new Antevert of patents were issued and are now Orange book listed we now have a total of six Orange book listed patent and Fran Avera strengthening the durability of the patent of state and extending the IP protection.
And to June 'twenty 39.
Turning now to and vaccines on slide 22, we implemented our cash pay program change on January 1st, causing and expected tier ex decline I am happy to say, we had a record net revenue per unit this quarter at $61 due to this change.
<unk> and delivered approximately fixed fills per patient annually, which continues to be above category averages.
Moving to slide 23, as you can see and vaccine is back to growth increasing month over month throughout the quarter.
Turning to slide 24 as stated we were able to increase the net price per unit firm deck the year over year, there was the 39% improvement and net price.
On a sequential quarter basis, and vaccine saw a 13% and improvement in net price.
Now that we have raised our net price per unit I wanted to share that we launched our new consumer campaign foreign vaccine called long may She rain shown on slide 25, the campaign is compelling and and its first week drove significant increases and traffic to the website. We believe this campaign will.
Significantly raise the interest level of foreign vaccine and the brand will have the same programs and places Ana Vera to keep access to patients hi.
We now turn to buy Juba, the second product and our menopausal franchise the.
Quentin quarter T. Rx trends were impacted by the same change and the cash program as and vaccine by Juba experienced year over year growth as shown on slide 27, despite minimal investment and the brand throughout the year.
Turning to slide 28.
We have made significant progress with our new lower 0.5, 100 by Juba dose. We recently won and appeal with the FDA for this new lower dose and we have of meeting set with the FDA for me to discuss next steps I would now like to turn the call over to Rob for closing remarks.
Sean to close let me highlight the following on slide 29.
And Q1, we improved our cash position lowered our debt had strong revenue growth, while lowering expenses and set record net revenue per unit for of menopause franchise.
In addition, a lot of care continues the divesture process and it's the <unk>.
Bruce and value through acquisition of new customers and the significant pipeline and the works.
Results of this quarter in line with our 2021 operating plan and we believe keeps us on track for achieving EBITDA breakeven on a quarterly basis and the first half of 2022 and.
And I'd like to open up the call for questions.
And.
At this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad again that Star then the number one to ask your question.
Yeah.
Your first question comes from the line of Dana Flanders with Guggenheim Partners.
Hi, This is devin on for Dana Congrats on the net price improvement instead of a couple of questions.
First what are you what are you seeing as far as the underlying trends for and back to the net right.
That led you to increase the top end of guidance I believe it was previously 70 is it more attributed to the relative customer mix.
Meaning like cash papers with nine cash pay.
And I guess more favorable of profitability across the snakes.
Hey, Devin it's Rob Good question, Felicia, we raised guidance for and actually can you give me a little more clarity on the.
I thought previously that the net price was the top end of the range for for net price was 70.
And it looks like 75 to 75 now.
No it's still 65 to 70.
We have not changed that but true.
Point.
So we did see.
So we raised the cash pay price of $75. We had a really we expected two months of a downward trend we had about a month and then turned around and February and now we're seeing meaningful growth and much higher and apps. So we expect the blended average for the year of 65 to 70, so youre going to see it continue to appreciate throughout this year.
So so that the average of 65 to 70 will stay but to your point since we came in at 61, you should see an upward trend of strong upward trend from here. So yeah. So a great great great movement, there and.
It worked and the the large pbms contract is helping as well.
And we're working on others are in that arena.
The other large pbms contracts for preferred position. So we're feeling good about and battery, it's net revenue per unit and its volume going forward.
Okay, and then on on and of Vera.
And what.
What percentage of total covered lives the ESI represent ran of ore and then additionally, as far as the patents go or are they or the composition of matter matter of patents method of abuse, just trying to get the sense of of what's contained and what claims during the patents.
Yeah, So I'll take the patent one and then I will turn it over to Don for the ESI portion by the.
The way the approximately 15%.
So the the IP growth that we've had is significant and it's strategic and of durability are are really where we had hoped to get them and are really really proud of our team that has gotten that done and.
The the extra five months are a nice to have through 2039.
But really it's the true strategic value of the types of IP, we have and the and the placement of it given the regulatory pathway that's there.
And to protect our assets.
So and you want to comment on here for sure and thanks, Kevin for the question. So again as Rob mentioned, its about 15%, but I just wanted to remind on a couple of things with ESI. The first is is that the decision was made out of class level and not a brand level and it's actually happening and multiple classes. So what we're really lucky with is that and the birth control pill.
Lastly of the protection of the HCA and and <unk> been very successful with that given the uniqueness of the product, which has allowed doctors to continue to provide and <unk> for those patients that want it and.
And through the letter of medical necessity. So we haven't seen an impact yeah. We have no no impact from the ESI changed at all because the letters of medical necessity and so it's great.
Okay, Great and one last one for me could you just remind me have you given guidance on where you expect the net price for battery, but and for the year going.
Going forward.
No, we haven't and and this I think this quarter.
Got it and there's a little bit of anomaly and things got a little ahead of itself I think it's comfortable to say it would be and the sixties somewhere it could be low sixty's could be high and we're not it's not a focus so we haven't been putting a lot of color there.
But it should trend somewhat similarly to inventory are in our opinion.
And that's about as far as we've gone and does that help.
Yes, thank you very much.
Thanks.
Your next question is from Louise Chen with Cantor Fitzgerald.
Hi, This is jen for Louise Thanks, so much for taking our questions and congrats on the quarter I think the few questions here I guess just the start for the low dose by you, but can you go more into the detail on what you're looking to get out of the maybe and maybe what's the base case timeline for next steps and then my next question is.
I know during the your remarks, you mentioned that the highest spending due to investments is expected to occur and the second quarter I. Just first one and confirm that you were talking about SG&A there and.
Or is it just SG&A that you're talking about and how extensive is that increased expect it to be and related to the is it fair to say that at least for the third quarter and fourth quarter than the first court like what we saw on the first quarters is sort of a good example of what spending could look like thanks.
Sure.
I'll take.
The baidu of expectations and.
And what we plan to get and <unk>.
Don you might want to add something you're closer towards the and I am so.
And we thought by juve of low dose.
Should of been approved when we originally submitted it and.
And it wasn't so we filed an appeal.
And that appeal was granted by the FDA very recently.
We're going to go meet with them in May of two to look at the next steps there.
And you know the.
There's a very challenging division here at times, and we don't know, whether they're gonna want and moving forward really quick or it's kind of move forward slowly.
So I don't want to set any expectations at all for that right now, but the good news is is that they are the the office level of thought it should of been approved originally and they've made that pretty clear and the summary, and it's and it does.
And good shape, and and Jan and Stan and I think the only thing to add as you know.
As Rob said, you know the FDA agree that the data originally submit submitted sort of supported approval as far as timing I think you asked on the base case, we won't know.
That until we have the meeting in May and you know one way of something to update we will.
And and hygienic James of the records the answer the questions on.
On spending so the the spending and I'm talking about is our is our opex. Our total opex line, excluding noncash items. That's the same thing we've been giving guidance on and consistent in the past.
So the last call we indicated that we expected the average per quarter of our of our opex to be between 45 and and $48 million.
And we're sticking to that for <unk>.
For this year in terms of the trend as you know with launch products. There is a there is a lot of seasonality.
And and and and your point about the using last year as a comparison and I think is a good one.
The last year, you saw our expenses kind of peak towards the middle of the year and then ease out.
Towards the end of the year and we would expect a similar phenomenon this year.
Yeah.
Okay, great if I could squeeze and one more question I think previously you've mentioned that we're anniversary of your goal was to increase annual here ex per rider to 15 I'm. Just wondering is that still the case.
For a certain type of rider, yes, absolutely.
We have loyalists sample and establish the different types and so if you go back to our strategic operating plan for.
For 2021 that we shared of J P. M. This quarter was exactly in line, but lower a little bit lower on the spend than what we've put out there or a good bit lower on the spend so.
So we're going to continue that plan will deliver and I think some of the new things that we've found the Don has talked about here, we think should really accelerate from growth and areas, where we've had.
Great growth, so far and pilot stage, we're implementing into the full full bore and Q2 and Q3 and we're really excited about that related to end of era. So yes. The answer your question for that type of provider 50 of this at all.
Okay, Great. That's super helpful. Thanks, everyone and congrats again, thank you.
Again, if you would like to ask a question. Please press Star then the number one on your telephone keypad that star one.
Your next question comes from Douglas Tsao with H C Wainwright.
So it's really quickly and in terms of the ESI change and I know, it's been fairly recent but just curious you know.
How long is it taking to get the letters of medical necessity of proved and sort of should we think of this could be sort of just that group of patients just sort of pushing out the curve and do you have a sense of sort of of the success rate from one of the physician wanted to initially described that to getting the the the.
On the L M and you know down what's the sort of pull through rate that you've seen so far.
So the pull for rate of constant to what it was before if anything it's better for us.
Let's be honest with you Doug so it's so far it's been excellent and I don't know if you've seen what we've been growing our census has happened and the pull through rate of the approval of percentage that we have has been identical to what it was before so we feel really good. The if look give yourself credit for following the letter of the law right and they're doing a good job.
And and.
And the very uniquely not all of birth control hazardous a unique form of soul and the letter of medical shut that goes through it gets approved a unless there's certain like religious exclusions and things like that so there's been zero impact and we're growing.
And are you sort of have you implemented and the operational changes to support physicians just to ensure that that continues and you sort of kid yeah, yeah. It sounds like the best read out.