Q1 2022 Agile Therapeutics Inc Earnings Call
Operator: Good afternoon and welcome to the Agile Therapeutics First Quarter 2022 Financial Results Conference
Okay.
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Sure.
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Good afternoon, and welcome to the agile Therapeutics first quarter 2022 financial results Conference call. Please note today's event is being recorded.
Operator: Call. Please note today's event is being recorded.
I'd now like to turn the conference over to Matt Riley head of Investor Relations.
Operator: I would now like to turn the conference over
Hello, everyone and welcome to today's conference call to discuss our first quarter 2022 financial results and corporate update.
Matthew Riley: to Matt Riley, Head of Investor Relations.
Matthew Riley: Hello everyone and welcome to today's conference call to discuss our first quarter 2022 financial results and corporate updates.
Before we start I remind you that today's call will include forward looking statements based on current expectations, including statements concerning our financial outlook and Tri net fee prospects for the future our outlook for the second quarter of 2022 management's expectations for our future financial and operational performance, including our.
Matthew Riley: 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 and financing prospects for the future, our outlook for the second quarter of 2022, management expectations for our future financial and operational performance, including our expectations regarding the growth of 12S, our business strategy, and our assessment of the combined hormonal contraceptive market, among other statements regarding our plans, prospects, and expectations.
<unk> regarding the growth of our business strategy and our assessment of the combined hormonal contraceptive market.
Matthew Riley: Such statements represent our judgments as of today, are not promises or guarantees, and may involve risks and uncertainties that may cause actual results to differ from the results discussed in the
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 the results discussed in the forward looking statements.
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.
The information on today's call is not intended for promotional purposes and not sufficient for prescribing decisions.
Joining me on today's call Tomorrow, Agile Therapeutics, Chairman and Chief Executive Officer, Dennis <unk>, Chief Financial Officer.
Operator: Officer.
Following our prepared remarks, we'll open the call to your questions I will now turn the call over to Doug.
Operator: Following our prepared remarks, we'll open the call to your questions.
Thank you Matt.
Thank you all for joining us on the call. This afternoon.
I will review the key areas of our financial performance for the first quarter 2002, and then.
Dennis: Al, turn the call over to Dennis.
An update on our cash position and plan to finance the company.
I will then hand, the call over to al for an update on our 2022 business plan.
Dennis: Thank you, Matt, and thank you all for joining us on the call this afternoon.
Dennis: I will review, the key areas of our financial performance for the first quarter of 2022, and then provide
In the first quarter of 'twenty two.
We realized net product sales revenue of $1 8 million, which is near the middle range of our guidance.
Our cost of product revenues totaled $1 5 million, which consists of direct and indirect costs related to the manufacturing a squirrel lots sold during the first quarter.
We had no charges for obsolescence during the first quarter of 'twenty, two and we remain focused on managing our inventory levels to meet the demand of our customers while avoiding oversupply.
Accordingly, we are working closely with corium, our contract manufacturer and supplier of gorilla.
The revised the structure.
And application of the contract minimums for the years 2022 and beyond under our supply agreement.
Our operating expenses were $15 8 million in Q1 2022.
Within our guidance of 15, five to $16 $5 million.
We communicated in April 22.
And down from the $18 $2 million of operating expense for the fourth quarter 2021.
We continue to focus on disciplined spending approach and making the right investments to encourage strategic growth.
While implementing what we believe to be impactful partnerships and agreements.
We plan to continue to optimize our spending by engaged in targeting focused spending.
Support of growing <unk>, while seeking a reduction in the other areas of our operation.
Based on this plan, we anticipate future 2022 quarterly operating expenses to be lower than those experienced in the first quarter of 2022.
For example, our management team has decided to voluntarily forego the annual bonuses for 2021 performance that were awarded in January of 2022.
Which is estimated to be a result in savings of approximately $700000 and that will be used for general corporate purposes.
We're examining other areas with our operations that can be reduced in a sensible way that we will not compromise our plan to grow <unk>.
We closed out the first quarter of 2022 with a net loss of $11 8 million or $3 78 per share compared to a net loss of $17 $1 million or $8 per share for the comparable period in 2021.
Dennis: an update on our cash position and plans to finance the company.
As of March 31, 2022, we had cash and cash equivalents of $3 7 million compared.
Dennis: I will then hand the call over to Al for an update on our 2022 business plan.
Compared to $19 $1 million of cash and cash equivalents as of June .
December 31 2021.
Decrease in cash on hand in Q1, 'twenty two reflects our working capital burn during the quarter and a $5 million paydown of our debt with perceptive advisors in January .
Offset by proceeds from our 485 million registered direct offering of preferred stock with a single healthcare focused institutional investor.
In April of 2022, we added cash of $4 7 million from the sale of our New Jersey net operating loss.
For which a receivable was recorded in the first quarter.
Financing update.
We continue to explore financing options to support the growth of 12.
As we discussed on last quarter's call our plans to finance the company is focused on three quarters.
One.
Work down our debt facility with perceptive advisors in exchange for the financial Covenant.
We currently have no plans to further leverage the company and therefore will not add additional funds under our debt facility with perceptive and.
In January 22, we paid back $5 million to perceptive, reducing our debt to $15 billion.
In the second quarter 2022, we plan to make another payment of $5 million in principal perspective in exchange for further release. This payment is tied to our ability to raise additional capital.
Art to regain compliance with NASDAQ.
As we have previously reported we were notified by NASDAQ that we are out of compliance with their minimum bid price requirement.
To that purpose, we believe we have taken the necessary steps to regain compliance with the NASDAQ stock market, and then which in turn will put us in a better position to finance the company.
Part III raised additional capital.
We've been transparent that we will require additional capital to achieve our goal of being cash flow positive.
We acknowledge that the capital markets recently have been unpredictable in general and especially in our sector.
Our plan is to remain flexible and continue to evaluate all options available to us to finance the company, including.
The ATM, we recently established.
Further equity offerings, and various business development and partnership opportunities to accelerate our past profitability.
We remain committed to our plan to grow revenue, while reducing burn with a goal to shorten the time to become cash flow positive.
Al will now provide an update on the business plan designed to help do exactly that now over to you.
Thank you Lucy Thank you to everyone for joining us today and continuing to follow our story.
In the fourth quarter 2021 earnings call, we referenced our belief that in 2021, we began to build momentum for <unk> and we believe we saw that momentum carry into the first quarter of 2022.
Dennis: In the first quarter of 2022, we realized net product sales revenue of $1.8 million, which is near the middle range of our guidance. Our cost of product revenues totaled $1.5 million, which consists of direct and indirect costs related to the manufacturing of squirrels sold during the first quarter.
Dennis: We had no charges for obsolescence during the first quarter of 2022, and we remained focused on managing our inventory levels to meet the demands of our customers while avoiding oversupply. Accordingly, we are working closely with Quorium, our contract manufacturer and supplier of, squirrels, to revise the structure and application of the contract minimums for the years 2022 and beyond under our supply agreement.
As we announced on April 14, 2022 for first quarter 2022 prescription data for <unk> seven.
Dennis: Our operating expenses were $15.8 million in Q1 2022. Within our guidance of $15.5 to $16.5 million, we communicated in April 22, and down from, the $18.2 million of operating expense for the fourth quarter of 2021.
<unk> strong double digit growth in all key performance areas.
This is the third consecutive quarter, where we saw consistent and meaningful growth and we expect to see this trend continue throughout 2022.
Additionally, we are encouraged with the grief and momentum we are now seeing.
In the second quarter of 2022.
Beginning in the third quarter of 2021, we starting to see steady demand growth and we believe the three part business plan. We introduced on our fourth quarter call of 2021 is contributing to the continued momentum in the early stages of 2022.
Dennis: We continue to focus on disciplined spending approach and making the right investments, to encourage strategic growth, while implementing what we believe to be impactful partnerships and agreements.
Dennis: We plan to continue to optimize our spending by engaging in targeting focused spending in support of growing TORLA, while seeking reductions in other areas of our operations. Based on this plan, we anticipate future 2022 quarterly operating expenses to be lower than those experienced in the first quarter of 2022. For example, our management team has decided, to voluntarily forego the annual bonuses for 2021 performance that were awarded in January of 2022, which is estimated to be a result in savings of approximately $700,000, and that will be used for general corporate purposes.
I'd like to provide you a brief update on each of these three key initiatives.
First our partnership with the faxes.
Dennis: We are examining other areas within our operations that can be reduced in a sensible way that will not compromise our plan to grow TORLA.
As a reminder, in January of 2022, we launched our co promotion partnership with effective.
<unk> group purchasing organization, which primarily provide service for non retail channel.
And in fact, this pharma, which has the potential access to over 25000 accounts, including College and University student Health Center.
And the planned Parenthood network.
Dennis: We closed out the first quarter of 2022 with a net loss of $11.8 million, or $3.78 per, share, compared to a net loss of $17.1 million, or $8 per share, for the comparable period in 2021. As of March 31st, 2022, we had cash and cash equivalents of $3.7 million, compared to $19.1 million of cash and cash equivalents as of December 31st, 2021. The decrease in cash on hand in Q1 2022 reflects our working capital, burn during the quarter, and a $5 million pay down of our debt with Perceptive Advisors in January.
Dennis: Offset by proceeds from a $4.85 million registered direct offering of preferred stock, with a single healthcare-focused institutional investment.
During the first quarter of 2022, we focused on initiating and mobilizing the fact with partnership and we believe we are beginning to see the positive results.
April and May of 2022.
The graph you see here provides insight into the impact that the non retail channel is starting to have all of our business and.
And we believe a factor can drive non retail growth as contribution from this channel continues to ramp throughout 202018.
The second component of our plan is the continued focus on the state of California.
As previously highlighted California is the largest U S market for contraceptives.
Well as the largest Medicaid program in the United States with roughly one third of the existing contracts of the cash market coming from Medicaid.
Dennis: In April of 2022, we added cash of $4.7 million from the sale of our New Jersey net operating, loss, for which a receivable was recorded in the first quarter. Financing updates. We continue to explore financing options to support the growth of, TORLA.
You can read the beginning of the first quarter of 2022, we began prioritizing adoption.
Dennis: As we discussed on last quarter's call, our plan to finance the company is focused on three parts.
Adoption and awareness in the state of California.
Dennis: Part one, work down our debt facility with Perceptive Advisors in exchange for relief on financial cover.
Dennis: We currently have no plans, to further leverage the company, and, therefore, will not add additional funds under our debt facility with Perceptive. In January 22, we paid back $5 million to Perceptive, reducing our debt to $15 million. In the second quarter, 2022, we plan to make another payment of $5 million in principle to Perceptive in exchange for further relief. This payment is tied to our ability, to raise additional capital.
Dennis: Part two, regain compliance with NADSA.
Thus far we are pleasantly surprised with the results we're seeing for two reasons.
Dennis: As we have previously reported, we were notified by NASDAQ that we are out of compliance with their minimum bid price requirement.
Dennis: To that purpose, we believe we have taken, the necessary steps to regain compliance with the NASDAQ stock market, and in which, in turn, will put us in a better position to finance the company.
We're seeing an uptick in <unk> market share in California, and also an uptick in its forward prescribers in California.
We believe these results are attributable to our existing sales team amplified by both general and targeted digital media spending.
The last initiative is a total direct to consumer commercial on connected TV.
Also known as CTV.
Our fourth quarter call in 2021, we announced our new patch in play.
Television commercial with the objective of prompting patients after doctors about it.
The end of March 2022, we deployed the commercial with a highly targeted efficient focus for women in our target market of 18 to 24 years old and the states that have the large market for contraceptive and potentially strong commercial coverage for <unk>.
While the commercial has always been in the market for a little over one month.
First month's data suggests that our target consumers are efficiently being exposed.
At a frequency of approximately twice per week.
And that a significant majority of the viewers are not dipping to really add.
For those who are interested in viewing the add on it.
A new target demographics.
It is available and poorly Youtube channel.
We continue to execute on our plan for 2022 and focus on building upon the momentum we established through 2021 and now into the first quarter of 2022.
Dennis: Part three, raise additional capital.
As a reminder.
Dennis: We've been transparent that we will require, additional capital to achieve our goal of being cash flow positive. We acknowledge that the capital markets recently, have been unpredictable in general, and especially in our sector. Our plan is to remain flexible, and continue to evaluate all options available to us to finance the company, including the ATM we recently established, further equity offerings, and various business development and partnership opportunities to accelerate our past profitability.
Each of these three truly truly became activated in the first quarter of 2022.
Dennis: We remain committed to our plan to grow revenue, while reducing burden, with a goal to shorten the time to become cash flow positive.
With the CTV commercial launching at the very end of the quarter and we expect to continue to contribute.
Toward demand growth throughout 2022.
Dennis: Al will now provide an update on the business plan designed to help do exactly that.
So now let me briefly talk about Acorn before we open up the call for Q&A I wanted to touch on our recent presentation for its first year post marketing pharmacovigilance at the 2022 annual clinic and scientific meeting of a card that was held in San Diego.
Alfred Altomari: Al, over to you.
Alfred Altomari: Thank you, Dennis, and thank you to everyone, for joining us today and continuing to follow our story. On the fourth quarter 2021 earnings call, we referenced our belief that in 2021, we began to build momentum for Torla, and we believe we saw that momentum carry into the first quarter of 2022. As we announced on April 14th, 2022, our first quarter 2022 prescription data for Torla demonstrated strong double-digit growth in performance areas. This was the third consecutive quarter, where we saw consistent and meaningful growth, and we expect to see this trend continue throughout 2022.
For the first year frozen launch we received no reports against embolic events of ETE.
And two reports of serious adverse events or aes.
Which is consistent with the safety profile reported in the secure clinical trial.
This was the first big hug meeting that was lie with the pandemic started and we welcome the opportunity to present these data and interact with the contraceptive thought leaders and prescribers in general.
Personally thrilled to be in California, our nation's biggest market withdrawal and I saw firsthand the physician excitement about our product.
Alfred Altomari: Additionally, we're encouraged with the growth and momentum, we're now seeing in the second quarter of 2022. Beginning in the third quarter of 2021, we started to see steady demand growth, and we believe the three-part business plan we introduced on the fourth quarter call of 2021 is contributing to the continued momentum in the early stages of 2022.
As a reminder, our cumulative prescribers count grew approximately 26% from the end of the fourth quarter in 2021.
Alfred Altomari: I'd like to provide you a brief update, on each of these three key initiatives.
<unk> ended the first quarter of 2022, and we consistently gained roughly 100, new prescribers each week during that period.
Alfred Altomari: First, our partnership with Afaxis. As a reminder, in January of 2022, we launched our co-promotion partnership with Afaxis through their group purchasing organization, which primarily provides services to non-retail channels. Afaxis Pharma, which has a potential access, to over 25,000 accounts, including college and university student health centers and the Planned Parenthood Network.
Alfred Altomari: During the first quarter of 2022, we focused on initiating and mobilizing the FACSIS partnership, and we believe we're beginning to see the positive results into April and May of 2022.
We believe having the opportunity to present, the post marketing data and speak to physicians face to face.
With prescribers from all around the country will have a positive impact on our prescription growth.
In summary.
We had another solid first quarter of 2022, evidenced by our growing quarterly prescription data.
And that we have a good base from which to continue to build a healthy growing brands.
Based on the prescription data trends, we are now seeing so far in this quarter too.
And the advancement of our toilet business plan. We currently expect to report our fourth quarter of consecutive growth and strong demand growth for the second quarter of 2022 and provide further proof points that our business plan is now delivery.
We also believe that an important part of our plan moving forward.
Explore all of our strategic options to grow or transformer business.
We'd like to now give our covering analysts the opportunity to ask any questions.
Operator, you May now open the line for Q&A.
Ladies and gentlemen at this time the Q&A session.
Asked a question you will need to press star and the number one on your telephone keypad.
Please standby, while we compile the Q&A roster.
Your first question comes from Orin Glib, Matt at H C Wainwright.
Hi, Jeremy.
Hi, Thanks for taking the question.
I have a few.
Thanks for that graph fastest im not sure. If that's the first time, we've shown that or not thats really interesting you can see that.
Alfred Altomari: The graph you see here provides insight into the impact that the non-retail channel is, starting to have on our business, and we believe that FACSIS can drive non-retail growth as contributions from this channel continue to ramp throughout 2022.
Alfred Altomari: The second component of our plan is to continue to focus on the state of California. As previously highlighted, California is the largest U.S. market for contraceptives, as, well as the largest Medicaid program in the United States, with roughly one-third of the existing contraceptive tax market coming from Medicaid. For these reasons, beginning in the first quarter of 2022, we began prioritizing TORLA, adoption and awareness in the state of California.
It looks like.
<unk>.
Growing, albeit small cell trended non retail volume there and so I have a couple of questions.
First of all what kind of economics do you see on that business is substantially different or not from your retail business and going forward does that.
Like it will be.
Consistent.
Business for you on a week to week or month to month basis, or should we expect or hope for sort of huge bolus orders like we saw last year early in the launch from one center.
I'm just curious now that you have a more formalized relationship with the fact that if that will be lumpy or steady steady grower and then I have a couple of follow ups.
Alfred Altomari: Thus far, we are pleasantly surprised with the results we're seeing for two reasons.
Alfred Altomari: First, we're seeing an uptick in TORLA market share in California, and also an uptick in, the TORLA prescribers in California.
Okay.
Alfred Altomari: We believe these results are attributable to our existing sales team amplified by both, general and targeted digital media spending.
Alfred Altomari: The last initiative is the TORLA Direct-to-Consumer Commercial on Connected TV, also known as, CTV. On the fourth quarter call in 2021, we announced our new patch-and-play CTV commercial with, the objective of prompting patients to ask their doctors about TORLA. At the end of March 2022, we deployed the commercial with a highly targeted, efficient, focus on women in our target market of 18 to 24 years old in the states that have the large market for contraceptives and potentially strong commercial coverage for TORLA.
Yes. This is the first time, we're putting in public.
So I think.
Hopefully a couple but first of all back in May of last year. When you see that big order, we alluded to that on a call, but if you remember way back when we were talking about that the prescription data. This is what caused the algorithms in the prescription data and get a little crazy. So we got a big order as you can see in May and that was the kind of.
A wakeup call for US came from a single state not a planned parenthetic hole for the state and County organization that bought a lot of product in one day.
Without abaxis by the way that was just.
You called it and we were delighted to take the order Oregon.
And then you can see on an ongoing basis, hopefully you start getting an appreciation that we get a smidgen of it so.
Every month or so without so much activity put against it. So we werent marketing in that channel, we're going on the Onesies and Twosies.
We make our product available to state and county organizations Ornette, a while 340 <unk> pricing so the Medicaid pricing. So some hospital buys a little little businesses by.
And then in January we announced a relationship when we started going after in earnest with the fact that.
And you see a little bit.
Smith of a bump hopefully in March.
We started getting into some orders a couple of planned Parenthood.
I think to your question about how to think about this business is almost like a hospital business, we start saying how many accounts. The wheel. So these are a couple of planned paranoid accounts a couple of state organizations.
And then my script that we're seeing a lot more.
The volume going forward. So I think on this graph I really want to emphasize that our retail channel look at the path.
Workers March March was a super month for us in the retail channel, we've got a preview of kind of what the non retail channel can be.
I'll tell you going forward that April Basel the April data.
On both channels.
And so on.
We're bullish on our growth going forward in both channels Youll see in this channel the non retail channel.
Pretty big that bought that little deep purple is going to grow substantially.
Substantially in April so, we're just starting to see a factor.
Now to your question about how do you get your head around this I wish I could tell you that we see it every week. This is lumpy it's lumpy EBIT for us.
That sounds come in they place big orders someplace small orders.
We just don't have.
A steady flow of business yet so it's even profits either we're going to leave and think of it as lumpy. So I think the best way, we can communicate that to you as this show you kind of the business like we are doing show you both channels.
I think as Dennis and Jason's and enrollment.
You might have to start reporting that separately.
So, but we're not quite there yet.
The economics look great we make money in this child. These are profitable for 14 for us.
If it comes from our norm.
Our non GPO customer they basically get the product that.
340, <unk> pricing, which is really pretty good about it.
If this extends its not that big of a discount.
Yes.
So the.
True faxes GPO customer gets a bigger discount.
That we haven't revealed yet, but as they're pretty substantial but profitable I want to emphasize by profitable we are not in the business of putting unprofitable business out there.
As Scott will have a marginal product throw off cash.
So we're pretty excited as you could see we start bending that curve on cycles based on what we're doing them and we get paid for cycles. We talk a lot about payer access we get paid for cycles.
I'd like to see the cycle just to jump in.
We are clearly going forward I mean, it's part of light up we had.
We came out of sheets in January February kind of a little bit of floor at all of those data the market was a little soft and we popped in March April looks great and May may four I'm, saying, it's going to be.
Still silicones. So we think going forward, we are going to grow both of these channels. So it's lumpy are and we're trying to get ahead founded when I could figure it out I communicated to you, but right now we'll take the business.
Okay and on the focus on California, I'm not sure if I totally understand are you.
What's the concurrent sort of cost consciousness or required cost consciousness. You have at the moment are you exclusively focused on California or just.
Prioritizing, California.
Not necessarily I think now the other territory.
Now I'll ask our sales team, we're looking at cost across the whole company I mean, we've been at this a while I think we really understand what drives the business kind of what are what's important to spend to make it as Dennis alluded in his talk kind of what are the bright tend to make Filipino we're looking at our sales force and saying we've been adding a while territories on productive meaning youre not.
Making money.
It's taken economy put on hold so we're looking at our sales footprint in general, but looking at our G&A spend but in California, California, we have a decent sales footprint and then Amy sitting in the room with me right now doubled down on E Commerce, and we're putting our consumer spend with <unk>.
TV spend only in five states.
You mentioned before California, Texas, Florida.
New York, and Illinois, So thats double Downing those dates are and so we're not spending our money in consumer across the nation for double down so we're.
California has again been hit with the Salesforce pretty good footprint and double down with <unk>.
Consumer spent so.
So we're not exclusive but we're having enough I think of it as a habit.
And a lot of exclusive.
And then just lastly, and sorry for taking so much time.
Upfront clearly aren't hiding from the.
Resource constraints that you're facing at the moment.
And you mentioned that BD or partnership opportunities there clearly something youre looking at certainly given the current market condition. So I'm just curious just philosophically alright.
Everything on the table in terms of <unk>.
Buying selling merging.
Or is there something specific that you're thinking about as far as.
And as far as specific targets, but just.
A type of transaction that would make sense for a company like yours and your current situation.
Sure I mean, the answer to your first question and Everything's on the table. So I mean, I think the state of the sector and the broader take.
Not saying that all the table, there's probably not been true themselves. So it's all the table I mean, clearly what we're looking to do is to accelerate our revenue and or take down our burn significantly. So while we were they hug aiming in the room with me.
We talked about the ways the co promote with other people. We've got a one product sales force is there an efficient way to do can lead to lighten the load.
We've taken down costs and G&A areas.
And then also potentially in the marketing areas. So we.
Reducing our burn as <unk> grown our revenue was missing missing critical.
The strategic moves that can happen, we're not afraid of that either so everything's on the table, but we're laser focused on the top line in <unk> and reducing our cost structure ultimately lighten up lighten the requirement.
Burning money if you will.
We're all on the table.
Alright, thanks, so much.
Thanks for the questions.
Just a reminder to ask a question you will need to press star one on your telephone keypad.
There are no further questions at this time I would like to turn the call back to al Al.
I do apologize al Tomorrow for closing remarks.
You've got an operator that was good.
Alfred Altomari: While the commercial has only been in the market for a little over one month, the first, month data suggests that our target consumers are efficiently being exposed to the ad at a frequency of approximately twice per week, and that a significant majority of the viewers are not skipping through the ad.
Yes. Thank you I know I know, we just we're trying to be not too long ago with our year end, so and we tried to be very descriptive in our payments. So that's I'd like to thank everybody for joining us today, and we have a little bit of good news that we were able to disclose on our press statement, but we couldnt get in our script SaaS monopoly, we did receive a letter from NASDAQ.
Alfred Altomari: For those who are interested in viewing the ad who aren't in target demographics, it is, available on TORLA's YouTube channel.
Alfred Altomari: We continue to execute on our plan for 2022 and focus on building upon the momentum we, established through 2021 and now into the first quarter of 2022. As a reminder, each of these three programs truly became activated in the first quarter, of 2022 with the CTV commercial launching at the very end of the quarter, and we expect each to continue to contribute to our demand throughout 2022.
Letting us know that we're backing down in compliance and the minimum bid price requirement.
And that's really important to us.
So that's off the table as Dennis described in his comments that was a big part of our plan. So we move forward. So that's.
A step in the right direction I would say beyond that news I wanted to reiterate a couple of things in today's call.
We currently expect to report a fourth consecutive quarter of demand growth. So we're signaling to you right now, but we think the second quarter strong.
We've seen about roughly half of the second quarter can we get obviously the demand data a little bit earlier. So we're really confident that we can deliver to you another strong quarter of growth, which will put up a year of growth in our fourth quarter I think about it as a year of solid growth and so we're really excited about that which tells us the good work that Amy.
And her team is doing is really kicking in.
So we expect.
So Dennis talked about on the 2022 quarterly Opex.
We're going to be burning less money than we burned in the first quarter. So.
So we're trying to set the company up.
That our top line is growing and then our opex burn going the other direction. So we think thats a good position to be in.
We're proud of that and we're at it.
Ben to partnership that Orange question to me, but I think that's the right question. The non retail channel. We are bullish we're starting to see and wake up and were starting to see that becoming we think an important part of our business.
But we don't want to lose sight of the retail business. The retail business is our core.
The most profitable business.
That's the business we've got to deliver we think are the factors Park partnership augmenting novel, placing retail volume.
And then we expect to have data that our larger footprint is orange crush again. It asked me about the state of California looked at we think it's a big idea.
Really the biggest market we have got winning there is important to us winning and the other big five states that we've identified also is very important to us. So we want them, we want to win in those states with approximately slightly under 50% of the volume of 5% say bring in and we think we can leverage the business smartly like that and we can guide our mall.
And again their efforts so very targeted area. That's the beauty of CTV, we could put it where we want it.
Alfred Altomari: So now let me briefly talk about ACOG.
Alfred Altomari: Before we open up the call for Q&A, I want to touch on our recent presentation at TORLA's, first year post-marketing pharmacovigilance at the 2022 annual clinic and scientific meeting of ACOG that was held in San Diego. When the first year of Squirrel has launched, we received no reports of venous symbolic, events, or VTEs, and two reports of serious adverse events, or SAEs, which is consistent with the safety profiles that were reported in the SECURE clinical trial.
Based on what we see and what we can control we believe our strategy work in the <unk> brand is healthy as we described and growing we're determined on executing our plan that we have in place to keep the brand growing and then Dennis we're in good hands with Denison financing the company.
Alfred Altomari: This was the first ACOG meeting that was live since the pandemic started, and we welcome, the opportunity to present these data and interact with the contraceptive thought leaders and prescribers in general.
Alfred Altomari: I was personally thrilled to be in California, our nation's biggest market for Squirrel, and I saw firsthand the physicians' excitement about our product.
Alfred Altomari: As a reminder, our cumulative prescriber count grew approximately 26 percent from the end, of the fourth quarter in 2021 to the end of the first quarter in 2022, and we consistently gained roughly 100 new prescribers each week during that period. We believe having the opportunity to present the post-marketing data and to speak to physicians, face-to-face with prescribers from all around the country will have a positive impact on our prescription growth.
We look forward to giving you future updates on our progress.
But we're excited we feel great coming out of the shoots in 'twenty two.
Alfred Altomari: In summary, we had another solid first quarter of 2022, evidenced by our growing quarterly, prescription data, and that we have a good base on which to continue to build a healthy, growing brand.
Alfred Altomari: Based on the prescription data trends we are now seeing so far in the quarter two and the, advancement of our total business plan, we currently expect to report a fourth quarter of consecutive growth and strong demand growth for the second quarter of 2022 and provide further proof points that our business plan is now delivering.
Like the first quarter a lot.
Alfred Altomari: We also believe that an important part of our plan moving forward is to explore all, of our strategic options to grow or transform our business.
Oren Livnat: Your first question comes from Oren Libnat at AC Wainwright.
Operator: We'd like now to give our covering analysts the opportunity to ask any questions.
Oren Livnat: Hi, thanks for taking the question.
Seems like a lot like the second quarter, even a lot more and if we can continue to work on our expense structure at the same time I think we're setting the company up nicely for the.
Operator: Operator, you may now open the line for Q&A.
Oren Livnat: I have a few.
Operator: Ladies and gentlemen, at this time we'll do the Q&A session.
Oren Livnat: Thanks for that graph.
Operator: To ask a question, you will need to press star and the number one on your telephone, keypad.
Oren Livnat: I'm not sure if that's the first time you've shown that or not.
Operator: Please stand by while we compile the Q&A roster.
Oren Livnat: That's really interesting.
Oren Livnat: You can see that it looks like a growing, albeit small, still trended non-retail volume, there.
Oren Livnat: Then I have a couple of follow-ups.
Oren Livnat: I have a couple questions.
Alfred Altomari: Hi, Oren.
Oren Livnat: First of all, what kind of economics do you see on that business?
Alfred Altomari: Yes, this is the first time we're putting it in public.
Oren Livnat: Is it substantially different or not from your retail business?
Alfred Altomari: So I think, you know, it's next to hopefully a couple dots.
Oren Livnat: Going forward, does that seem like it will be a consistent business for you on a week, to week or month to month basis, or should we expect or hope for sort of huge bolus orders like we saw last year early in the launch from one center?
Alfred Altomari: You know, first of all, back in May of last year, when you see that big order, we alluded to that on a call.
Alfred Altomari: And, you know, and then you see on an ongoing basis, hopefully you start getting an appreciation that we get a smidgen of it.
Following year end.
Oren Livnat: I'm just curious now.
Alfred Altomari: But if you remember way back when we were talking about the prescription data, this is what caused the algorithms and the prescription data to get a little crazy.
Alfred Altomari: So, you know, maybe a month or so without much activity put against it.
Oren Livnat: Do you have a more formalized relationship with the facts as to if that will be lumpy, or a steady grower?
Alfred Altomari: So we got a big order, as you can see, in May.
Alfred Altomari: So we weren't marketing in that channel.
What we want to take this company, which ultimately leads to cash flow positive as Dennis mentioned in his comments. So thanks again I know this call neurons off each other I appreciate you keeping track of our business and good night everybody.
Alfred Altomari: And that was the kind of a wake-up call for us.
Alfred Altomari: You know, we're going to onesies and twosies.
Alfred Altomari: It came from a single state, not a, Planned Parenthood.
Alfred Altomari: We make our product available to state and county organizations, Oren, at a 340B pricing, so the Medicaid pricing. So some hospitals buy, some little businesses buy.
Alfred Altomari: You know, accounts come in, they place big orders, some place small orders.
Alfred Altomari: It came from a state and county organization that bought a lot of product in one day, you know, without a fax, by the way.
Alfred Altomari: And then in January, we announced our relationship and we started going after it in earnest, you know, with the faxes.
Alfred Altomari: You know, we just don't have, you know, a steady flow of business yet.
Alfred Altomari: That was just, they called it in.
Alfred Altomari: And you see a little bit of a, you know, smidgen of a bump, hopefully in March, you know, that we started getting in some orders, a couple Planned Parenthoods.
Alfred Altomari: So it's even, you know, for us, it's, you know, we're going to leave and think of it as lumpy.
Alfred Altomari: Is there an efficient way to do?
Alfred Altomari: We were delighted to take the order, Oren.
Alfred Altomari: Oren, I think to your question about how to think about this business, it's almost like a hospital business.
Alfred Altomari: So I think the best way we can communicate that to you is to show you kind of the business like we're doing, show you both channels.
Alfred Altomari: Can we delight in the load, you know, so I'm taking down from the cost, You know even goes into the GNA areas, you know, and then also potentially in the marketing areas, you know So so reducing our burn is you know, and or growing our revenue is mission mission critical, But there's a strategic move that can happen, you know, we're not afraid of that either So everything's on the table or and but we're laser focused on the top line and and or the reducing our cost structure ultimately, Lighten them lighten the requirement to burning money if you will So it's all on the table, All right.
Alfred Altomari: We start saying how many accounts do we own?
Alfred Altomari: I think Dennis and Jason's in the room and, you know, we might have to start reporting this separately.
Oren Livnat: Thanks so much That's why the thanks for questions on, Just a reminder to ask a question you will need to press star one on your telephone keep in You, There are no further questions at this time, I would like to turn the call back to al al
Alfred Altomari: So these are a couple Planned Parenthood accounts, a couple state organizations.
Alfred Altomari: So, but we're not quite there yet, you know, but the economics look great.
Operator: I do apologize, Al Altomari, for closing remarks.
Alfred Altomari: So, we're really confident that we can deliver to you another strong quarter of growth, which will put up a year of growth in our fourth quarter. Think about it as a year of solid growth.
Alfred Altomari: And I mentioned in my script that we're seeing a lot more of the volume going forward.
Alfred Altomari: We make money in this channel.
Alfred Altomari: You got it, operator.
Alfred Altomari: And so, we're really excited about that, which tells us the good work that Amy and her team are doing is really kicking in.
Alfred Altomari: So I think on this graph, I really want to emphasize that our retail channel, look at the pot.
Alfred Altomari: These are profitable for us.
Alfred Altomari: That was good.
Alfred Altomari: So, we expect, you know, also as Dennis talked about, on the 2022 quarterly OPEX, you know, we're going to be burning less money than we've burned in the first quarter.
Alfred Altomari: I know these calls were on top of each other.
Alfred Altomari: Look at March.
Alfred Altomari: You know, if it comes from a non-GPO customer, they basically get the product at, you know, 340B pricing, which is really pretty good.
Alfred Altomari: So, thank you.
Alfred Altomari: So, you know, so we're trying to set the company up, you know, that our top line is growing and our OPEX burn is going the other direction.
Alfred Altomari: I appreciate you, you know, keeping track of our business.
Alfred Altomari: March was a super month for us.
Alfred Altomari: You know, it's substantial.
Alfred Altomari: I know we were in front of you not too long ago with our year-end show, and we tried to be very descriptive in our press statement.
Alfred Altomari: So, we think that's a good position to be in.
Alfred Altomari: And good night to everybody.
Alfred Altomari: And the retail channel, we've got a, you know, a preview of kind of what this non-retail, channel can be.
Alfred Altomari: It's not that big of a discount, you know.
Alfred Altomari: So, I'd like to thank everybody for joining us today.
Alfred Altomari: We're proud of that and we're at it.
Operator: This concludes today's call.
Alfred Altomari: I will tell you, going forward, that the April data is on both channels.
Alfred Altomari: So, you know, a true Faxus GPO customer gets a bigger discount, you know, that we haven't revealed yet.
Alfred Altomari: We have a little bit of good news that we were able to disclose on our press statement, but we couldn't get it into our script fast enough.
Alfred Altomari: Then the partnership, you know, that Orin's question to me I think was the right question, the non-retail channel, we are, you know, bullish.
Operator: You may now disconnect.
Alfred Altomari: We're lighting up. So we're bullish on our growth going forward in both channels.
Alfred Altomari: So, but it's pretty substantial, but profitable. I want to emphasize but profitable.
Alfred Altomari: We did receive a letter from NASDAQ letting us know that we're back again in compliance, you know, on the minimum bid price requirement.
Alfred Altomari: We're starting to see it wake up and we're starting to see that it's becoming, we think, an important part of our business.
This concludes today's call you may now disconnect.
Alfred Altomari: You'll see in this channel, the non-retail channel, some pretty big, that little deep purple is going to grow, you know, substantially in April.
Alfred Altomari: We are not in the business of putting on profitable business out there.
Alfred Altomari: And that's really important to us.
Alfred Altomari: But we don't want to lose sight of the retail business.
Alfred Altomari: So we're just starting to see a factor kick in, Oren.
Alfred Altomari: You know, it's got to have a margin.
Alfred Altomari: And, you know, so that's off the table.
Alfred Altomari: The retail business is our core.
Alfred Altomari: Now to your question about how do you get your head around this?
Alfred Altomari: It's got to throw off cash, you know, and so we're, pretty excited.
Alfred Altomari: As Dennis described in his comments, that was a big part of our plan. So, we moved forward.
Alfred Altomari: That's the most profitable business.
Alfred Altomari: I wish I could tell you it's steady.
Alfred Altomari: And, you know, like you can see, we start, we start bending that curve on cycles based on what we're doing.
Alfred Altomari: So, that's a step in the right direction, I would say.
Alfred Altomari: That's the business we've got to deliver.
Alfred Altomari: We see it every week.
Alfred Altomari: I mean, we get paid for cycles.
Alfred Altomari: Beyond that news, I want to reiterate a couple things we saved calls.
Alfred Altomari: We think of the DeFax partnership augmenting, not replacing retail volume.
Alfred Altomari: This is lumpy.
Alfred Altomari: We talk a lot about TRX and we get paid for cycles.
Alfred Altomari: We currently expect to report a fourth consecutive quarter of demand growth. So, we're signaling to you right now that we think the second quarter is strong.
Alfred Altomari: And then we expect, you know, that our larger footprint, there's Orin's question again, it asked me about the state of California.
Okay.
Alfred Altomari: It's lumpy, even for us.
Alfred Altomari: So boy, I'll tell you, it's nice to see the cycles just, jump and then, you know, you'll see us going forward.
Alfred Altomari: We've seen about roughly half of the second quarter, you know, so we've hit obviously the demand data a little bit earlier.
Alfred Altomari: Look, we think it's a big idea.
Yes.
Alfred Altomari: I mean, it's starting to light up.
Alfred Altomari: I mean, it's singularly the biggest market we've got.
Okay.
Alfred Altomari: You know, we had, you know, we came out of shoots in January, February, kind of a little, bit slow as all of us did. The market was a little flop and we popped in March.
Alfred Altomari: Winning there is important to us.
Alfred Altomari: April looks great in May.
Alfred Altomari: Winning in the other big five states that we've identified also is very important to us.
Okay.
Alfred Altomari: May, from what I'm seeing, is going to be, you know, still going.
Alfred Altomari: So we want to win in those states.
Alfred Altomari: So we've been going forward.
Alfred Altomari: It's approximately slightly under 50% of the volume those five states bring in.
Yes.
Alfred Altomari: We're going to grow both these channels.
Alfred Altomari: And we think we can leverage the business smartly like that.
Alfred Altomari: So it's lumpy orange.
Alfred Altomari: And we can guide our marketing efforts to a very targeted area.
Alfred Altomari: We're trying to get our heads around it.
Alfred Altomari: That's the beauty of CTV.
Alfred Altomari: When I can figure it out, I'll communicate it to, you.
Alfred Altomari: We could put it where we want it.
Okay.
Alfred Altomari: But right now, we'll take the business.
Alfred Altomari: So based on what we see and what we can control, we believe our strategy is working. The Twirler brand is healthy, as we described, and growing.
Alfred Altomari: Okay.
Alfred Altomari: We're determined on executing our plan that we have in place to keep the brand growing.
Yes.
Oren Livnat: And on the focus on California, I'm not sure if I totally understand, are you, you know, with the concurrent sort of cost consciousness or, you know, required, you know, cost consciousness you have at the moment, are you exclusively focused on California or just in, you know, prioritizing California, you know, not necessarily of other territories?
Alfred Altomari: And we're in good hands with Dennis in financing the company.
Okay.
Alfred Altomari: Now our sales, you know, we're looking at cost across the whole company.
Alfred Altomari: We look forward to getting you future updates on our progress.
Alfred Altomari: I mean, we've been at this a while, I think we really understand what drives the business and kind of what are what's important to spend and making It's not as though losing his cost, you know, kind of what are the right spend to make so look, you know, We're looking at our sales force and saying, you know, we've been at it a while territories aren't productive meaning You're not making money.
Alfred Altomari: But we're excited.
Alfred Altomari: You know, they've got to be put on hold.
Alfred Altomari: You know, we feel great coming out of this shoot in 2022.
Yes.
Alfred Altomari: So we're looking at our sales footprint in general, We're looking at our G&A spend but in California, California We have a decent sales footprint and then Amy who's in the room with me right now double down and owners, We're putting our consumer spend the CTV spend only in five states.
Alfred Altomari: Liked the first quarter a lot.
Alfred Altomari: You know, we mentioned before California, Texas, Florida New York and Illinois, so that's we're double down in those states Orin, So we're not spending our money consumer across the nation. We're double down.
Alfred Altomari: It seems like I'm going to like the second quarter even a lot more.
Alfred Altomari: So we're We're, California, you know getting getting hit with a sales force, you know, pretty good footprint and you know double down with Amy's Consumer spend so we're not exclusive, but we're having enough.
Alfred Altomari: And if we can continue to work on our expense structure at the same time, I think we're setting the company up nicely, you know, for the following year.
Okay.
Oren Livnat: I think of it as a happy up for you not exclusive, And then just lastly and sorry for taking so much time You know up front, you know, you clearly aren't hiding from the you know, Resource constraints that you're facing at the moment and you mentioned that you know BD or partnership Opportunities there, you know clearly something you're looking at, Certainly given the current market condition.
Alfred Altomari: And, you know, where we want to take this company, which ultimately is to cash flow positive, as Dennis mentioned in his comments.
Yes.
Alfred Altomari: So I'm just curious just philosophically are It's everything on the table in terms of buying selling merging, or there's something specific that you're thinking about as far as I don't mean as far as specific targets, but just a type of Transaction that would make sense for a company like yours in your current situation, Sure.
Alfred Altomari: So thanks again.
Alfred Altomari: I mean the answer to your first question everything's on the table, you know So, I mean, I think you know the state of the sector and the broader take with anybody, Who's not saying it's all on the table is probably not being true to themselves.
Alfred Altomari: So it's all the table I mean clearly what we're looking to do is to accelerate our revenue and or take down our burn significantly, So while we were a cog Amy's in the room with me, you know, we talked about you know, With other people, you know, we've got a one product sales force.