Q1 2022 TherapeuticsMD Inc Earnings Call

Good afternoon, ladies and gentlemen, thank you for joining us for Therapeutics N V first quarter 2022 to financial result conference call I would now.

I turn the call over to Investor relations for therapeutic M D. Lisa Wilson.

You may begin.

Thank you operator, good afternoon, everyone and thank you for joining today to discuss our first quarter financial results and business update.

This afternoon Therapeutics M D issued a press release announcing its first quarter 2022 financial results.

The press release and accompanying presentation are available on the company's website therapeutics M D in the investors and media section.

On today's call from Therapeutics M D, Our Chief Executive Officer, Hugh O'dowd inch.

Interim Chief Financial Officer, Michael Dawn again.

And Chief commercial officer, Mark Glickman.

I would like to remind everyone that certain statements made during this conference call may be forward looking statements.

Such forward looking statements are based upon current expectations and there can be no assurance that the results contemplated in these statements will be realized.

Actual results may differ materially from such statements.

Due to a number of factors of risks some of which are identified in our press release and <unk>.

Annual quarterly and other reports filed with the SEC.

These forward looking statements are based upon information available to therapeutic 70 today and the company assumes no obligation to update these statements as circumstances change.

An audio recording and webcast replay for today's conference call will also be available online in the investors and media section of the company's website.

For the benefit of those who maybe listening to the replay or archived webcast. This call was held and recorded on may 16th 2022.

With that I'll turn the call over to therapeutic M DS CEO Hugh O'dowd.

Thank you Lisa and thank you everyone for joining our call today.

Last quarter, we reviewed our 2022 priorities, including details surrounding our innovator manufacturing supply challenges and today I'd like to share our progress against our goals, including key milestones met in the first quarter of 2022.

Our net product revenue for the first quarter was $19 $3 million compared to net product revenue of $18 $7 million in the fourth quarter of 2021.

As we discussed last quarter, our first quarter revenue performance was impacted by anniversary of manufacturing and supply challenges.

As also previously communicated we believe that our interviewer of supply challenges peaked in the first quarter of 2022, and we envision incremental improvement as the year progresses.

Turning to our recent $150 million vital care divestiture.

I am quite pleased that our organization drove a rapid and successful deal conclusion, just five weeks following its announcement in.

And finally with regard to our pathway to achieving EBITDA breakeven, we shall pause offering 2022 full year guidance until we could provide clarity regarding our capital structure as well as receive feedback from the FDA on our pending manufacturing supplement.

And with that I'll turn it over to our interim Chief Financial Officer, Michael Dawn again to discuss our financial results in greater detail Michael.

Thanks Hugh.

As previously announced in March we agreed to sell our vital care prescription services business to good Rx.

In April after the close of the first quarter, we completed the vital care divestiture and received a cash payment of approximately $138 $5 million net of customary hold backs.

We may also receive up to an additional $7 million in earn out consideration contingent upon by the carriers financial performance through 2023.

We used $120 million of the proceeds to pay down our outstanding loan.

Now I'll address our financial results in greater detail.

Slide five shows our quarterly net revenue trends.

For the first quarter of 2022, our total net revenue declined two 7% to $19 $3 million as compared to $19 9 million the first quarter of 2021.

Net revenue was up 600000, or three 5% as compared to the fourth quarter of 2021.

During the quarter sales of <unk> were $8 $5 million, a decrease of 200000 or two 7% compared to the first quarter of 2021.

The decrease was primarily due to a decline in sales volume and average sales price, which is attributable to the antevert manufacturing challenges we experience.

However, compared to the fourth quarter of 2021, <unk> sales Rose 700048, 7% increase attributable to the higher sales volumes, partially offset by a decrease in average sale price.

In vaccine net revenue for the first quarter of 2022 was $7 million remaining flat when compared to the first quarter of 2021.

Although we saw an increase in sales volume year over year. This was offset by a decrease in average sale price.

Sequentially <unk> revenues were up $300000 or four 5% compared to the fourth quarter of 2021 as a result of an increase in sales volume and average sale price.

Sales of by Juba or $2 6 million for the first quarter of 2022, an increase of $100000 or four 7% compared to the first quarter of 2021.

The increase was primarily due to revenues associated with the <unk> license agreement, partially offset by a decrease in sales volume and average sale price.

<unk> sales were down $100000 or four 5% quarter over quarter compared to the fourth quarter of 2021 attributable to a decrease in sales volume, partially offset by an increase in average sale price.

Total license and service revenue in the first quarter of 2022, which includes revenues received from vital care prescription services prior to its divestiture in April .

$400000 compared to $200000 in the first quarter of 2021.

The entire $400000 recognized in the current quarter represented by the care service revenue, whereas the totaled $200000 in the prior year period represents revenue associated with milestone payments for product approvals with our out of U S partners.

On a quarter over quarter basis, total license and service revenue in the first quarter of 2022 increased $300000 compared to fourth quarter 2021, due to an increase in by the care service unit volumes associated with an increase in new customer agreements.

Our full financial results are on slide six.

Gross profit for the first quarter of 2022 was $14 $5 million, a decrease of <unk> $7 million or four 7% compared to the first quarter of 2021 as a result, a result of the aforementioned decrease in product revenue combined with a decrease in overall product gross margin.

Compared to the fourth quarter of 2021, our gross profit rose $500000 or three 8% driven by an increase in net product sales, partially offset by a slight decline in product gross margin.

Selling and marketing costs were $18 $9 million for the first quarter of 2022, a decrease of $5 $1 million or 21, 3% compared to the first quarter of 2021. The decrease was a result of lower overall advertising and marketing spend and lower product sample costs.

Partially offset by other sales and marketing investment.

Quarter over quarter, selling and marketing decreased $3 $1 million or 14, 1% compared to the fourth quarter of 2021 due to a decrease in brand spending for both <unk> and <unk> products.

General and administrative costs were $24 million in the quarter, an increase of $2 million or 11%.

To the first quarter of 2021 in general we saw a temporarily reduce G&A expenditures during 2021 due to our COVID-19 related cost saving measures, but expect to maintain higher levels going forward to support our commercialization efforts.

Quarter over quarter, our general and administrative costs declined $5 5 million or 21, 2% due to certain severance related expenses incurred during the fourth quarter of 2021.

R&D expense was $1 4 million during the first quarter, a decrease of $700000 or <unk> 31, 7% compared to the first quarter of 2021, a result of lower compensation and employee benefit expense and lower lab research costs.

Over the past few years, our R&D expenses gradually decline as we refocused our efforts on the commercialization of our products.

On a sequential basis, our R&D expense remains unchanged compared to the quarter ended December 31 2021.

For the first quarter, our non operating expenses were $22 $8 million, an increase of $12 $7 million compared to the first quarter of 2021.

This change is due to the March 2022 amendment to our financing agreement, which caused us to incur higher amortization of deferred financing costs and a loss on the extinguishment of debt.

This increase was partially offset by lower interest expense associated with a lower average debt balance during the quarter and lower interest prepayment fees due to elimination of prepayment fees with the March 2022 amendment to the financing agreement.

When compared to Q4 2021, this increase was $15 $2 million, mainly due to higher amortization of deferred financing costs and a loss on the extinguishment of debt as interest expense remain constant for both quarters.

More details regarding the amendment and our debt and financing arrangements can be found in our 10-Q.

Net cash used in operating activities was $29 $5 million for the first quarter and as of March 31, 2022, we had $34 million in cash.

I'll now turn the call over to our Chief commercial officer, Mark Glickman to provide more detail around our commercial progress.

<unk>.

Thanks, Mike for the past few months, we've worked diligently on optimizing our sales targeting and maintaining discipline in our approach. So we can effectively leverage all three of our assets instead of one product at a time.

Key to this has been re targeting potential customers to address the top prescription writers for each product ensuring our representatives are focusing on the right areas.

Already we are starting to see results.

Slide eight shows our call activity, which is the best we've recorded in terms of cost per day and targets reached these efforts are reflected in product demand.

Slide nine demonstrates how we're meeting the demand for <unk>. Despite inventory challenges, we're selling as many rigs as we can manufacture and upon receiving a shipment the rings are immediately sold.

The team is doing a phenomenal job in managing demand and getting the product into the hands of customers. Despite shortages.

We believe we will see improvement in the manufacturing situation throughout the second quarter builds.

Building inventory is important because demands and Vera has been brisk and growing as shown on slide 10, total quarterly prescriptions were up 27% over the first quarter of 2021, with both new and existing prescribers continuing to write.

Though the aforementioned manufacturing and supply challenges hampered our ability to meet demand in the first quarter and grow total prescriptions in the first quarter. We believe our efforts to combat the supply challenges will improve throughout the second quarter.

Slide 11 shows the momentum in Ana Vera prescribers, and we expect the base to continue to expand as the only long lasting procedure free patient controlled option for women and <unk> is positioned to play a significant role in the contraceptive market.

We are also observing early improvement in demand from vaccine following our strategic realignment in February .

Our field force now calling on the right positions prescriptions improved in March as you can see on slide 12.

In vaccine is the only ultra low dose vaginal insert that works as early as two weeks for the treatment of VBA Dyspareunia and we expect continued growth in this area.

As within vaccine by June experienced a similar uptick in March as demonstrated on slide 13.

<unk> is the only one dose FDA approved bio identical therapy to treat diesel motor symptoms and we found this product would be very commercially responsive to field force efforts.

It's also sticky the women, who take baidu, but tend to stay on it long term.

As you've seen today, we believe the time and energy we put into our new commercial plan is paying off.

Increased sales productivity demand for <unk> continues robust growth and our menopause brands are rebounding.

With three terrific product that patients want and need and a strong effective sales organization. We believe we can grow all three into leaders in their category.

Thank you.

Ladies and gentlemen, this does conclude today's conference. Thank you all participating you may now disconnect have a great day.

[music].