TherapeuticsMD, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Financial statements are unaudited; dollar amounts below are in millions unless noted. TherapeuticsMD is a women’s healthcare company selling ANNOVERA, IMVEXXY, BIJUVA, and prescription prenatal vitamins.
Financial performance and position
| Metric | Q1 2021 | Q1 2020 / comparison |
|---|---|---|
| Total revenue | $19.9 | $12.3; up 62.2% |
| Gross profit | $15.2 | $9.5; up 59.2% |
| Product gross margin | 76.1% | 77.8% |
| Operating expenses | $44.5 | $60.5; down 26.5% |
| Operating loss | $(29.3) | $(50.9) |
| Net loss / loss per share | $(39.4) / $(0.11) | $(56.8) / $(0.21) |
| Cash used in operations | $(38.4) | $(39.1) |
| Cash and cash equivalents at period end | $137.6 | $80.5 at December 31, 2020 |
| Term debt outstanding, gross | $200.0 | $250.0 at December 31, 2020 |
Product revenue was $19.6 million, with ANNOVERA at $8.8 million, IMVEXXY at $7.0 million, BIJUVA at $2.4 million, and prescription vitamins at $1.4 million. License revenue was $0.2 million. The company had a $60 million minimum unrestricted-cash covenant and reported compliance with its debt covenants at March 31.
Material changes versus the prior-year quarter
- Revenue growth was led by ANNOVERA, up 285%, and BIJUVA, up 119.9%; IMVEXXY increased 9.7%. Vitamin sales declined 42.4%.
- Operating expenses fell $16.0 million, mainly due to lower selling and marketing costs, including reduced advertising, sample, and outsourced-sales costs. Compensation and employee benefits increased $1.9 million.
- Net loss narrowed by $17.5 million, while operating cash use improved by only $0.7 million. The company attributed cash-flow movements partly to working-capital changes.
- Financing included $150.9 million of net proceeds from common-stock sales and $50 million of debt repayment. Shares outstanding rose from 299.8 million at year-end to 393.2 million at quarter-end.
- Debt expense increased to $10.2 million, including a $2.5 million prepayment premium and $1.3 million of financing-fee amortization.
Outlook, risks, and contingencies
- Management expects operating losses to continue in the near term and says future success depends on commercializing IMVEXXY, BIJUVA, and ANNOVERA. The filing gives no specific revenue or earnings guidance.
- Management believed cash and potential financing under the $100 million 2021 at-the-market equity program would support ordinary-course needs and covenant compliance for the next 12 months. It cautioned that weaker or delayed product commercialization, or a worse-than-expected pandemic impact, could accelerate cash use and threaten liquidity or covenant compliance.
- Amendments to the term loan revised revenue requirements and repayment terms. Scheduled principal payments begin in 2022; specified prepayments may incur substantial fees. A breach of cash, revenue, or other covenants could make debt immediately payable.
- COVID-19 continued to create uncertainty around demand, healthcare-provider access, insurance coverage, collections, and supply chains. The company reported product supply was uninterrupted and believed near-term inventory was sufficient.
- Teva and Amneal challenged patents covering IMVEXXY and BIJUVA in separate generic-drug litigations. No trial date had been set for the IMVEXXY case; BIJUVA proceedings were temporarily stayed. The company had capitalized $1.9 million of related legal costs, which could be expensed if it does not prevail.
- Other exposures include reliance on third-party manufacturers and suppliers, minimum purchase commitments, customer and supplier concentration, and the potential dilution from further equity sales. FDA approval of the lower BIJUVA dose remained uncertain despite a favorable resolution of the company’s formal dispute request; an FDA meeting was scheduled for May 2021.
Important facts for investors to verify
- Whether product sales growth continues, particularly for ANNOVERA and BIJUVA, and whether payer coverage and prescription access improve.
- Cash burn, remaining cash-covenant headroom, compliance with quarterly product-revenue covenants, and any subsequent ATM share sales.
- Debt repayment schedule, interest costs, and the impact of prepayment premiums and financing fees.
- Developments in the Teva and Amneal patent cases and the FDA pathway for the lower BIJUVA dose.
- Effects of COVID-19, manufacturing concentration, and purchase commitments on product availability, costs, and margins.