Q2 2021 Evofem Biosciences Inc Earnings Call
[music].
Biosciences second quarter 2021 results call at this time, all participants are in listen only mode. After the speaker's presentation.
There will be a question and answer session to ask a question during the session you'll need to press star one on your telephone. Please be advised that today's conference is being recorded I would now like to turn the call over to <unk>, Vice President of Investor Relations Amy last call.
Thank you and good afternoon, everyone. If you haven't done so already I encourage you to access the second quarter of 2021 presentation and the press release issued earlier today, both of which are at Amazon Dot com under the investors tab.
Before we begin I would like to remind you that remarks on this call will contain forward looking statements, which are made only as of today August 11th 2021 for a more detailed description of important risk factors that could cause our actual results to differ materially. Please refer to our annual report on Form 10-K, and our country filed 10-Q.
I'll turn the call over to summer how much you have in fact, yeah. Thank.
Thank you Amy and thanks, everyone for joining us today.
<unk> delivered strong and sustainable growth in the second quarter of 2021.
Clues, 47% growth effective restriction and 65% growth in units.
And it also includes a 52% increase in the number of healthcare providers prescribing sexy.
We achieved this despite ongoing and ever changing pandemic in a time when many companies are about the impact of COVID-19 on their results.
We are delivering and we are growing.
The measure of the company's choices and people strategy and ability to execute is often betsy in times of crisis, it's much easier to perform when doctors, obviously Europe when patients are not on lockdown.
The overall tone of leg is more positive.
What youre going to hear today is that we are delivering on our promise of breaking the hormone glass regardless of obstacles.
And what that is proving the contraceptive market was ready for innovation. The birth control category has been dominated by pharma for decades, but there is a demand for a non hormonal choice without the serious side effects that many of them cannot tolerate.
There are also the invisible side effects that many women feel just make them not quite license out.
The feelings that need some work, whether it's something more serious what's happening to their buying because they take a hormonal medication every day, they don't even need to.
The demand is there as evidenced by our continued growth.
We look to harness that prevent.
And accelerate our growth by launching a robust national brand awareness campaigns, featuring an Emmy Award winning celebrity in early September that will break convention and will connect with women and beautiful as I will discuss this and other ongoing initiatives. After our CFO Jay file reviews, the financial results and risks, they're entered our chief commercial officer.
Discusses betsy metrics and reimbursement.
Thank you Sandra and good afternoon everybody.
Second quarter of 2021, net product sales increased to 68% to $1.9 million compared to $1.1 billion in the first quarter.
During the second quarter, we implemented cost containment measures across all departments is included reduced spending reduced non sales force head count by 15%, eliminating certain consulting roles and eliminating hires that were budgeted in 2021. These measures will result, an aggregate savings of $9.5 million on an annualized.
Basis.
Research and development costs were $8.5 million, an increase of $1.2 million from Q1, reflecting higher enrollment in <unk> trial. As a reminder, pro costs are currently paid by restricted cash from the adjuvant investment last fall.
Selling and marketing costs were $27.2 million a decrease of $3.3 million from Q1, driven by more media and agency fees, which were offset by costs related to the FX example, rollout.
General and administrative costs were $6.4 million a decrease of $1.3 million from Q1, driven by lower head count recruiting and outside services. As a result total operating expenses were 43 million a 6% decrease from Q1.
As of June 32021, we had $47 million in cash and cash equivalents as well as $14.9 million and restricted cash from the adjuvant notes available for use this totaled $61.9 million for use in ongoing operations with that ill turn the call over to Russ for more detail on our commercial progress Russ.
Thanks Jay.
In the second quarter of 2021, Betsy prescriptions increased 47% in units dispensed to patients increased 65% from the prior quarter June was our strongest month, yet with over 5000 prescriptions and nearly 6000 dispense with texture units.
<unk> and units dispensed trends for July are on track to meet or exceed June levels and that is despite the heavily traveled the fourth of July holiday.
We also saw a 52% increase in our prescriber base from Q1 to Q2 more than 4700 Hcp's prescribed <unk> in the second quarter from launch through July 16, more than 7700, HCP have prescribed vaccine and this number continues to grow week over week.
Our strong growth was driven by a highly engaging in DTC campaign.
Increasing access by our professional sales team.
Growing awareness effectively among healthcare providers and women seeking contraception that isn't right for today we.
We are already seeing the benefits of the effects of these samples that we rolled out in Q2. Our team has successfully introduced sampling to our HCP audience and they have been received exceptionally well the main benefit of a <unk> tack sample is that it eliminates the need to evaluate retail unit for a woman to try 10 feet.
We recently conducted some market research to understand.
<unk> where are they coming from.
We learned that 49% of women companies effectively were not on a method of contraception and the past year. This aligns with our expectation among this audience as expected if we are growing the non hormonal market.
Another interesting finding is at 29% of women in Covington vaccine or switch from oral contraception, and an additional 7% are switching from hormonal rigs and patches in aggregate more than a third of our vaccine users have switched from hormonal contraception perfect opting for a non hormonal.
Contraceptive gel. This data indicates we are converting a significant number of effectively user from the hormonal contraception segment represented about 18 million women using hormonal contraception, which together with the women currently not using a prescription contraception suggests that we may have one of the largest target protect.
Are there any brand against the contraception category.
Another important part of our market researches at the age of the demographic of women most likely to use <unk> early 'twenty is to under 35 that is as you would say are sweet spot exactly what we expected and who we are already aligned with within our DTC campaign.
Quickly touch on reimbursement, while we continue to work towards having factory placed on the list of contraceptive options over 65% of subscriptions are currently covered or.
The prior authorization process for the remaining 35% virtually assured revenue is the most straightforward easy to complete prior authorization.
I've seen in 30 years of working in female contraception.
And our approval rate exceeds.
Exceeds the benchmarks for the category in a significant way.
Finally, 100% of Medicaid recipients have access effects through the national drug rebate agreement. Additionally, Medicare out in the state of California added vaccine to a preferred drug positioned in July providing becsey unrestricted access and the $2 million of intelligence for contraception.
Medicare.
With that I'll turn it back to salary.
Thank you Ross.
Already we are taking meaningful market share from pharma and we're growing the non hormonal market with 47% prescription growth in Q2, we're excited to keep that momentum going and continue to increase our market share.
In early September the vaccine movement is getting kicked into high gear. When we launch our new fully integrated 360 degree marketing campaign for a taxi.
<unk> was born out of the Ics that women's deserves to be completely in control of their value of their decisions and especially different control it.
The campaign empowers women by creating a world where they make the room is no judgment has no settling jetson understanding and when it comes to something as important as pregnancy prevention <unk> is the brand that listen understand and lets women carbon shock, it's hormone free control unfair terms.
I was on the SEC last week with our creative team and our celebrity Ambassador and I look forward to hearing your reaction to this campaign.
Another key initiative is our ACO strategy, we continue to work with lobbyists politicians and women's advocacy group with the goal of gaining a new category for vaccine at the vaginal ph modulator on the FDA contraceptive category chart we.
We feel very strongly that our HCA efforts are going in the right direction and the recent positive progress increases our confidence that we will succeed.
The House Appropriations Committee, which funds the opposite women's health included in our funding memo that they expect the opposite women's health to take action on the contraceptive category chart. Additionally, the federal Health resources and services administration is currently reviewing its guidance regarding contraceptive coverage for insurers and expect to complete its review late this year.
We believe that that review will culminate in a positive update to the current guidance and will ensure new and unique methods such as <unk> will be required to be covered by insurers in the U S under the Acs.
Gaining this new category will provide increased access to affect FIFA women across the U S. You already heard from Ralph how incredibly simple prior authorization ports are well they will no longer be needing the majority of insurers will offer execute their members at no cost to women.
Now turning to R&D I am pleased to report that enrollment and <unk> remains on track to complete enrollment by the end of this year.
This is our pivotal phase III trial with <unk> 100 for the prevention of Chlamydia and gonorrhea. We continue to expect to report topline results in the first half of 2022 and assuming positive results. We will file an NDA in to these potential new indications by the end of next year with a six month review.
<unk> on the CDC newly released FTIR National strategic plan that includes among its goals to support the development and uptake of Stis multipurpose prevention technologies like taxi.
Our market research estimates that prevention of Chlamydia and gonorrhea is a $2.1 billion dollar market opportunity in the U S alone above and beyond the $2.4 billion U S opportunity in contraception that we are currently addressing and an STI prevention. There are no FDA approved prescription preventative.
Measures right now the choices are condoms or absence and based on the continuing rise in reported NCI rates clearly that is not enough.
These are just a few of the many near term catalysts for <unk> that we believe will support our ongoing growth and our ability to deliver long term value for shareholders.
And the lifecycle of any new successful brand there are critical levers that must be activated we are building our inflection point.
By educating health care providers.
<unk> awareness, among women and driving limited to offices, resulting in them getting prescriptions that are rapidly growing less over months bottom line. We continue to grow during COVID-19. This is because we have the right product the right team and the right message.
Look at best when women get put on hormonal birth control is really attractive maybe you won't have hormonal side effects, but maybe with.
The moodiness the sense of just not feeling like yourself literally crying all month long and not knowing why are just some of the things that we hear every day when we get feedback from win win.
Women wanted to feel like themselves again and start having hormone determine how they feel.
This is why <unk> deliveries on the <unk>.
With that operator, please open the call for Q&A.
Yes.
Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key.
And our first question comes from Ram <unk> with H C. Wainwright Your line is open.
Alright, thanks, very much for taking my questions. So in the context of what you are seeing from <unk>.
Script trend perspective, as well as underlying market dynamics can you maybe comment a little bit on what some of the factors are that are driving women to switch from one type of contraceptive or others too sexy and if you can also give us a sense of what you are seeing emerging in terms of trends.
Among women, who are currently not using active contraceptive methods.
Yes, yes. Thank you for the question on well just to start I will say to you that what we've all been experiencing is when we opened up the Pandora's box to say, let's talk about hormonal birth control women respond quickly and say Oh, My God don't even get US started even that will say don't need to get started here.
Do you want us more critically put a fine point on that sure one of the things that we found in market research, but it also been discovered and other researchers at 70% or greater.
The women who are currently using hormonal method indicate that they have some concerns about their exposure to hormones. They indicate that when they want to become pregnant that airfreight that hinders.
Hinders, our ability to or there is some concern about what the long term implications of SEC.
Decades of hormone use has on their health. So we think that that is really probably the major driver of that is taking these weighting once they've seen our DTC campaign or their health care professional has shared with them that there is now a new option is available that goes beyond hormones that that is what really drives that.
Segment so.
In a way it's not surprising to see that we've got nearly a third of our more than a third of our users switching from that method.
It is a pleasant thing to see because it validates all the things that we knew were were true when we start looking at some of the trends among the non users again, we gave you of about 49% of them are roughly half that are coming from that a couple of things.
I saw that trend is that they did respond by going to their doctors offices as we have seen previously on market research that 80% of those were still seeing that are positioned at least once or twice in a year. So it really dovetails in as we've said is that these women are saying I've only quit because there was nothing available.
For me, but now there is and the women who are are on hormonal methods are saying I've been waiting for something to come I wasn't willing to take a chance on nothing but now that it's here, we're seeing large numbers come from that category as well.
That's very helpful. Also I was wondering if you could comment on how you expect sales and marketing spend to evolve over the course of the second half of 2021, and specifically when we talk about lower media and agency fees.
Can you discuss what you have found to be most effective in terms of media dollars allocation spend and what you have elected not to continue pursuing because it wasn't having the appropriate.
Well thankfully for US one of the things I can say is that working together with our partners.
That said and analyze all of this and looked at it.
We found ourselves so we pretty well have been very effective at our spend and we put it all in the right place. We did get some eyebrows lifted I think eventually when we started going to television because people have said well isn't TV sort of a thing of the past. So we understood that dirty Covid times that women were returning to because they were at home and.
It wasn't just on their phone anymore, but it was actually in these capable cases, so we found that that perfect mix of not only on air but also.
On those.
Platforms like Hulu and.
Youtube TV and places like that where you also can distribute on onto your device has been great and then mixing items together with the surge that we've done and they may be doing wrong is we're giving you just open an incredible amount of what we would refer to as unpaid search in other words, if it's organic they're finding that themselves and then when we.
Kind of Synergistically put that together with the way it is being discussed and social media among those women who have influence among others. We found that our spend is just about.
Ideally placed and there hasnt really has to be a whole lot of shifts or adjustment in that so we would anticipate that going forward. It would be in a very similar space as we've had it.
The first part since the launch of our DTC campaign and the same thing I think you asked on the sales side would be true we had been pretty active in making sure. Our sales team was in the right places and that they were being utilized for the maximum we've made a few switches in the sense that when we found that there were some gray.
<unk>.
Coverage in one part of the country, where there was no access issues.
Switch those positions, but we've maintained the same spend and the same number of people that are on that.
Out of the field was qualified health care providers.
Great very helpful. I also wanted to ask specifically about.
The prescriber base and how that is evolving and if we look at the number of prescribers, who have written a script for a vaccine.
Can you see a group within that group of subgroup as it were of kind of repeat prescribers is that a developing trend that you can actually tease out at this point or is it really too early to tell who are likely to be kind of high volume repeat prescribers effectively at this juncture.
But what I will say is that we do continue to see that prescriber base grow pretty substantially month over month quarter over quarter and one of the reasons I think we're getting there is as we went out and had our salespeople calling on options that were still open that werent shutdown that wanted to find out more information and.
We have different ways, whether it was related to the different programs that were offered for them to come outside of their office earnings either office or a virtually.
That set the base up really well for when the DTC drove believes women hand that they were ready to prescribe and give them.
The taxi as they had asked and I when we started looking at how that breaks down.
We're not completely ready to go down through the scientific part of this and say this is absolutely whats happening, but we do find that.
You look at the top prescribers, they do tend to be more often than women than men and they tend to be maybe only in practice.
A 10 year period of time versus those who have been in practice for 25 years, probably those who are.
Getting closer to their time as our resident and are finding that they are.
The women, who calls will come to them are also of the younger set versus those who are moving into more of a gynecology practice.
Great very helpful. Just one other question do you have any updates at this juncture regarding the ACI add situations.
Well, we actually so where we are now is that we.
We have been given some positive updates that everyone has agreed that in fact, the contraceptive chart should be updated and will be updated the challenge is the timing and so what the indication that's been given to US is that it will likely happen by the end of the year. However, we're not just going to sit back and you have cross our fingers, we actually have a very.
Deliberate push where IMAX is going to be on Capitol Hill next month I had a series of meetings with a variety of different advocates and politicians and we also have a social media push talking about the fact that our product in particular as a vaginal ph modulator attracted the population of women who cannot uses a hormones clinically contra.
<unk> and yet they are being denied access. So we have had very positive correspondents, but we have made a very serious push and so I would say that we have agreement that we should have our own category, but the issue is timing and so I am hoping that Mike <unk>.
Is really going to activate a much more precise decision point, but I would tell you. If we were going to beat that and we would say ended the year or first quarter, but we're going to try to push that to the sooner if possible.
Thank you very much.
Yes, thanks for the questions.
Thank you. Our next question comes from Annabel <unk> with Stifel. Your line is open.
Hi, Thanks for taking my questions and good progress.
I know that.
Since you've implemented.
Sampling.
Two.
I guess, a three unit sample instead of a full box you also have.
So safe Harbor site.
Covered lives over 55% last quarter. So could you just give us a sense of how that potentially had helped your net price.
And what Greg said.
But going forward.
As far as appropriate.
I think one of the things that <unk> done for our net prices because we have started seeing.
A greater.
Number of those that are going through as you said, we are starting to see that progress happen that.
By its nature has started to do that because we're not having to cover such a large amount in terms of the copay card situations. It's a part of our <unk> strategy, where we really believe that if we will continue to drive women who are interested in a non hormonal method, we continue to make sure that the PAA process.
<unk> is an easy one.
We're helping the offices in the sense of we're using cover my meds, and we're making sure that our salespeople on the street understand how to activate this without requiring a lot of time or effort on the part of the offices staff as Saundra mentioned it typically is just a couple of quick check boxes.
Got a good number of those that are going through that way. So that's been part part of that the sample has allowed us to then make sure that if there is a process going on to that for the next 24 hours or so if that's how long their case that they have something in our possession to begin the process of using factory and.
It also as you referred to it eliminates the need to make that first one three with the copay card in order to give them an.
An opportunity to use the product.
I guess some trial with it so those are all really positive things for us and we think thats, having some impact upon our gross to net.
Okay.
So you can quantify that I think it was about $85 net last quarter.
Could you give us something for this quarter.
Yes.
This is Jay just to expand on that.
<unk> mentioned the focus really is on script growth through the remainder of the year, leading up to HCA and so we're not spending as much time.
Managing that gross to net down to a specific number at this point, we're pretty happy with some of the implementations items.
Items that we met that Rusty commented on so we won't be giving out any further guidance on that at least through the end of the year.
Alright, So I guess moving on I did notice also that.
You have a lot more coming from the.
Contraceptives oral contraceptive market with hormonal market than you originally anticipated and I think you only have about one 2% penetration of that market has this changed your thinking about how much you can penetrate this oral contraception market and its potential.
No.
Upside opportunity there.
Yes, absolutely.
One of the things that we did early on because we wanted to make sure that we were we will appropriately placing ourselves into.
Expectation that that matches, we did severely cut back.
Anticipation of the number we would get at that category from what our market research told us because our we really kind of our sweet spot was going to be there. If you looked at the commercial that we brought out.
February one of the things that we would hit on was what we call <unk> achieved the woman who again are represented and we have made a decision as we started watching through the first few months of launch we became aware that there was as we had always said as saundra said a few mentions non hormonal among a group of women.
Social setting or even in a business environment, you'll have them go tell me more and what we started seeing was that was sort of the response was Lola with tell me more so we started selling them more and so that started down that road now the numbers that we came up with to your point, we're pleasantly surprising from there.
We expected that so we will continue to be exactly where we already set our course out to be which is to make sure. Those women who are using hormonal methods of contraception understand that they don't have to or if that's not the right choice for them and we kind of think that that's probably going to continue to maintain or even grow the number of it.
Presenting today, which is more than a third of our users are switching that makes this a much more attractive.
Category to begin because as often as seen.
When you have an established category people ask how many of those users are you going to move from that to your method.
User to calculate because they are counted already among script data and so we're going to be able to feel pretty confident that we know we're getting a good portion of ours that are already using the scripts to move over from one to another and then as we supplement that with those who have said finally I can come back into using something that gives me the security and the.
Peace of mind, but knowing that <unk> now have an option for me.
Okay got it and one last question if I may.
No for U S NDA.
That you are planning for <unk> 100 at the end of the year. It doesn't assume being I guess, so does that mean that you've sort of solidified the strategy of how youre going to go forward with this product as Evo 100 going to be an extension of sexy.
At this point and what are the.
Benefits disadvantages of doing it that way.
Yes, so we.
So yes, it will be an NDA and again full enrollment will be complete at the end of this year. Our top line data will be in June of next year.
So when we really look at it.
Actually defined a huge advantage or disadvantage NDA versus F&B.
Because frankly, when you look at adding on the chlamydia and gonorrhea indications, we were still going to have an opportunity to just from a bigger piece of the market share. So when you look at the fact that there is still nothing indicated for these preventative indications and as they are the two most diagnosed and most prescribed stis.
The market opportunity is very clear and unlike being in the contraceptive category, even though as a non hormonal on demand product, we see ourselves as having this unbelievable innovation, yes, there are still other products, although we're converting in the hormone category to your last question, we're going to target the 23 million women and now we see we have a much.
Bigger market opportunity when you look at adding on these STI indication it is a low hanging fruit of epic.
There is nothing else until we're very excited that we're going to have a six month review, we're excited and all the research that we really anticipate our results to be comparable to our <unk> HCV and so so yes. The short answer is is that we feel good about the NDA do you think we're going to be able to grow that additional share and rescue when I talk about the strategy for that.
That was the key thing is really among the payers one of the nice things about having this.
EMEA is we do end up having what if I could use a sports analogy you have two shots on goal and that we have our first one was with taxi around around ACA and then when we bring the next one and again the ACA also outlines that in respect to preventative care for such a transmitted infections that it should be a covered benefit.
So we see this as if you will sort of two shots on goal two reasons for payers to really have to make sure that they can.
Cover this because a woman who is sexually active needs to be protected from Sci and no matter, who she is and NFC using it from protective SDI at all to give her the protection of a pregnancy. So so we really think that this gives us if you will that I can use that terminology with two shots on goal, whereas other other products really just.
Are really limited to that one.
NDA that they have this will.
Tremendous advantage for us.
Great. Thank you.
Thank you. Our next question comes from David <unk> with Piper Sandler Your line is open.
Hey, Thanks, So I just have a few so first can you talk about just remind us what the gross to net would be.
The scenario, where you can get your own contraceptive category.
Per the Acs mandate and then so be it.
That don't get it.
What would the gross debt look like steady state I don't know if you can comment on that.
And then secondly, I apologize if I missed this what portion of covered lives.
As of now.
Covered.
Zero co pay.
And then lastly.
In terms of the.
Expansion into STI prevention.
Can you talk about.
Expansion of direct to consumer.
And spend.
Surrounding that.
If not.
Quantifiable sense of at least qualitatively what that would look like with that on board. Thanks.
Yes, So Jay do you want to start with.
Gross to net and then they can speak about okay. I think Russ can you move ahead with the second part.
I'm not sure if it's again it's easier okay.
Yes, so on our on our growth.
Again, we don't want to be so specific that we got held for something when we know that if we got to do that later on but when you start looking at other brands that have been covered under HCA, you end up with a 78% net.
And it could even climb up into the 90 just dependent on on all the other factors you have to take into that so when <unk> talked about the fact that once HCA comes in those people who are on the co pay card maybe right now are a heavy weight. If you will they are costing us a lot they've easily go from where you don't make a whole lot off of.
Each person too.
The jump right up into that 70% range and that continues to climb as you refine your.
Cost of goods and so on so we think that that again that strategy makes a lot of sense and we would expect us to jump into that range on that and having had other products in the past and looking at those that's a pretty consistent number just dependent on where you are your cost of goods.
Five.
And then when we start looking at the proportion of lives that are currently covered at zero, it's running around the 8% to 10% range that come in at zero.
And so again, we see that as a big.
A big bonus just for the simple fact that tiers. The number of paired with Orange recognized we should be one of those covered benefit, but even among those who who requires to be either.
Non preferred position, but still on a covered benefit.
We're not seeing a co pays in those respects that are exceeding typically maybe $75 or first of all and then we make sure that that buy down.
Allow us a woman to to get it at a rate that does not affect your out of pocket and then the result is our gross to net with those are still really pretty pretty healthy at this point. So we do have strategies in place too.
To come and approach that should.
Not be put into place, which we would assure we have our best contracts available.
Just as a reminder, we've talked about this before we have chosen not to contract with Pbms that give them outrageous requests from their rebate side of that.
As we grow the business, we get into <unk>.
Much better positioned to negotiate that so it will be in a position to have faster at some point should we not get.
To get a much more favorable rebate and they wanted to give us when we have no business at all and then <unk>.
Work ourselves around that to make sure that that we're right in the right positions. Those are things that we've got already in the books and the sense of saying, we're going to we've got a strategy. If it doesn't come through we won't be starting flat footed, but we really do believe as saundra said that we're on path to get to the ACA and all of this will turn into really nice gross to net and.
Before Russ touches on the DTC question, Dave I, just wanted to slip one more final point on that is that just for the people who are listening.
It might not have done the review on HCA and what the situation is left in 2010.
Affordable Care Act established.
Contraceptive, China with 18 categories and any product that came to market come into those 18 category.
But what happened is that the chart did not move forward with evolution with change so new products have been introduced to market, but they haven't been put on the list.
It brings perspective is that we are one of those new products already has a generic many of the new products that came to market generic engineered patches.
<unk> really is the innovation that we state because it is the only vaginal ph modulate the only product with no hormone that is used on demand and the reason our confidence level is high is that the vulnerable population 800000 cancer patients just this year alone.
Zedek patients patients with a high BMI smokers all the patients that.
Our clinically contra indicated performing loans. They are left wanting because the majority of them will not use the only other product, which is a copper IUD, which has its own very serious side effect issues and so.
No.
Louis is that this vulnerable population is being denied.
Not only is it not right, but the fact that there is an FDA approved asset was approved in may of last year and there is still a population that literally has been told well too bad for you. So the door, we're pushing on isn't just inside even given direct feedback from the agency in the office to say we agree these.
Women's is durbin option.
<unk> has clearly brought that only options at the table and so that's why we feel really confident that this is going to happen and I do appreciate that we have contingency plans that I just wanted to point out for everybody that our confidence isn't just because we like factory, it's because there's a subset of women.
It should not be denied ethically.
Only products that they can use if they are trying to manage that frequently.
So then the DTC question.
David could you just stated again over time, we want to know Im sorry, the investment yes, sure sure what I'm, what I'm just asking is.
And to which youre going to expand DTC with STI prevention.
In the label.
No. If you can talk about it quantitatively.
But just even just qualitatively, what's the extent to which youre going to.
Expand your DTC efforts to date.
You have STI prevention in the label.
Yes, so David because we are I think.
You'd called the perfect timing from the sense of saying.
When we get approved for <unk>, we will be at a stage when the DTC for contraception would've bias nature started to drop down and spend because our awareness is now high enough that we don't have to keep that same level of spend and it will really be if you will sort of.
Transfers over then so that we don't have to increase our DTC spend in order to go out and make the STI.
Brand, our approval aware too to consumers. So it will really be a perfect timing as we're seeing our needs to talk about contraception go down it will increase when we talk about STI, but the other side of that coin is and it should and again I'm projecting into the future it should be less for the simple fact.
So we no longer have to educate the masses on what is going to be what is does not hormonal vaginal ph modulator that you've got there will be aware that to a much higher degree. So if it takes much less effort.
So to say and then not only in contraception, but also an STI and again so it will bring bring those two together in a nice way. So we would anticipate that when it comes onboard our DTC spend DTC spend does that actually go up but we'll we will continue to drop down but not at the same rate at what if there was only one indication.
Alright, thanks very helpful.
Our next question comes from Jeff Hung with Morgan Stanley. Your line is open.
Thanks for taking the questions for the sample program that you started in May what kind of feedback are you hearing from physicians in your sales reps on the sample is translating to more scripts being filled and is there a way that you can can you tease out the additional contribution from the samples.
Yes.
Catherine it's more just the one thing that has been very important is our consistent and ongoing training of our sales force. So you heard us say that when we talk about prior to a medical necessity form our Cove, one expects the <unk> to its prior on Rex are constantly trained and my point in saying that.
The reps go in with an absolute expectation that the doctors when we get a sample if it is associated with the prescription periods. This isn't let's try different flavors of ice cream in the grocery store. This is serious and these samples.
Can it be given with the expectation that prescriptions, followed now and I didn't know like do you have to understand that there's not a lot of companies. There's a lot of companies until their salesforce to stay home during COVID-19 literally stay home, while we weren't one of them I can assure you and so one of the very few companies are still in those offices the risks are.
Going in and.
Q aggressive way, but in an appropriate way to expect that prescriptions go hand, and it's really working.
Giving them different messages and different styles of personality type, but I would tell you the effectiveness of the prescription selling team.
Samples has been very very encouraging.
And I don't know if perhaps you wanted to go.
The only thing I'll say is that we did we did launch the sample program in May So we only had about half of the quarter of which there were actually samples in the field. So it's been a little bit too early to say, we think that that's resulting in a certain number of scripts being filled but we can say just to add to saunders.
Comment.
This is a little bit more anecdotal, but I have been out of it.
Doctors offices talking to them and talking about what how the samples to it and I've got to tell you that almost without exception.
By them that they that they have that because at this point in time, there are really only one other contraception, Jim there cover that has a sample to offer to women's or are they really appreciated that we came up with this for them and quite honestly many of them never actually physically has seen.
Our unit outside of.
Outside of.
The pictures and this allows them to start touching and feeling and handling and so it's been a it's been a really tremendous response on that and we would anticipate as we watched this over the next quarter that we're going to we're going to see it's definitely translate into a great return on our investment and you know what just a final note is that I think we'll see different everybody is now.
And if they arent actually given out by the revenue because the Doctor is ordered them on the iPad and then they get shipped directly to notice. So it is a second opportunity for direct to go into the office to verify the samples gave us every input. So it's just yet another opportunity for them to have an additional call with the doctor. The rents don't have to have storage facilities. They don't have to count inventory.
None of that extra expenditure it just goes right to the Doctor's office.
Okay. Thanks, and then back in March you indicated that it would take about five to seven months to get a better sense of the refill real refill rates can you talk about what youre seeing or when do you think that you would have a better sense of the refill rate.
We are seeing what we would say it looks like the trend up as we're looking at two things that ITV is turning it into us and showing US one is.
Those refill rates are going up not as the rate that you would typically expect of a monthly method, where you can start tracking over months over months.
Well, we never anticipated that would be the case, but the other thing that we're seeing is and we've talked about this the units that are dispensed and now are starting to increase at a rate that's a little bit higher than what you would say the prescription that's going out there, indicating that a lot of physicians are now starting to say rather than making a prescription in box.
12, theyre, making a prescription two boxes of 12 that in itself again extend the length of time that is going to happen between that original and initial script and the <unk>.
Refill. So we're doing two things Geoff one is trying to get a handle on it with <unk> to be able to track. This in a way that allows us to really quantify where and how these are going out.
Yes.
The second part is recognizing that with the great number of women, who actually started using our product in March of <unk>.
And since March.
It needs to be four or five or six months to get to a feeling of where thats going to fall out.
Irrespective <unk> remember, we did our market research, we've projected six to seven fold in a year.
But again that was off of a category Thats brand new so we were assuming based on what we heard from <unk>.
Women and positions in our market research frequently they would use it and we watched our utilization during the clinical trial, we think we're pretty close to that number, but we will probably need to have.
Again, a few months out from that time, where really we started with a bolus of our users in March.
Alright, Thanks, and if I can ask one last question.
For the upcoming marketing campaigns that Youre, starting next month, what would you want to see to consider the campaign success and how quickly can you see the impact and how long do you think it would take to it.
The greater numbers of scripts and sales just how should we be thinking about that thanks.
Yes.
Yeah. So.
So the campaign, that's kicking off in September.
Would you say.
Conservatively, if you look at other endorsements and other campaigns. So this is an ear campaign and it really is multi level and so.
I would say the conservatively, we're saying that we expect a 25% lift on the campaign conservatively.
Now we're launching in September I would tell you that by if the data that we are going to get by the end of October early November when we anticipate we would see that kind of a movement and again, that's really looking at.
The tough part is.
With all the other parameters in this moment in time.
The country and are things going to maintain the way. They are now and so we're thinking end of October beginning of November we will see the positive push from the campaign kicking off in September.
So if you get a <unk>.
We also fine tuned to that is keep in mind, the lag, we havent scripts and and then and.
So we would expect to start seeing it.
For the first four to six weeks some of that take off the one thing I will say Jeff is that.
When we did this in February we saw a pretty quick response within a few weeks.
And we had virtually 4% awareness before the campaign kicked off as we see.
Triple or even four times higher awareness, we enter into this camp game, we would anticipate that the response will be fairly fairly quick.
And keep moving.
I'm not going to be quite as great as saundra, although I am very very <unk>.
Bullish on the fact that if you look back at the trends you saw happen in the first few weeks post.
DTC campaign in February I think we can expect that a more as we move into this new campaign, because it's just the quality of the message that will go out with a familiar voice and a higher awareness to start with.
And also can you Jeff just to add one more thing I do think the thing that all of US internally fine theory of refreshing your method is.
Is that it really does speak to the fact that.
Women don't have sex every day.
And if they're not feeling it shouldn't take shape and they really want a healthier choice and they want to manage their fertility.
Can you control of that.
That fee is an opportunity for them.
Feel good for them to have a good quality of life for them to not have to worry about visible or invisible side effects that are occurring and should they decide they want to get once you start taking a backseat.
It's out of your system you can get for you tomorrow with Youtube retail flesh out period.
You are Greg seating you don't want to have four months of your breath, if youre walking your dog right. Your child's recycled do you really need to <unk> session.
Yes.
So the great thing about the campaign is that it really speaks to the real world practicality, and what's really going on with women's line.
I think youre also going to find the messaging.
Yes, it's a little humorous, but really the intention is to talking about meeting women, where they are and really talking about the real things that women Barry.
Any little secrets about the side effects that really happened that no one talks about.
I just wanted to say just because something has been down one way it does.
Let me get right and for too long women have been asked to suck it up and can be quite NTT monitors and just suffered through link and sexy now allows them to say I'm not going to do that anymore and so this campaign I think it's going to appeal to a variety of different women and in theory meaningful way and so we're excited about it.
And so yes, I think we really believe that women are going to leave looking at some of the disease.
Messages thing.
I have a better option.
Alright, thank you.
Yes.
Okay.
Thank you.
That concludes the question and answer period I will now turn the back the call back to Saundra Pelletier for closing remarks.
Well. Thank you everybody for joining us today, we really appreciate it. We appreciate your ongoing support we have a lot of levers that we're going to continue to execute on and we look forward to Shanghai with you at the September equity conferences and on our Q3 call in November so have a great rest of your day and thank you again for your time.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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