Business Wire | Nov 9, 2020 06:55AM EST

TherapeuticsMD(r) Announces Third Quarter 2020 Financial Results

Nov. 09, 2020

BOCA RATON, Fla.--(BUSINESS WIRE)--Nov. 09, 2020--TherapeuticsMD, Inc. (NASDAQ:TXMD), an innovative, leading women's healthcare company, today reported financial results for the third quarter ended September 30, 2020.

"We delivered a strong quarter that resulted in record growth across our product portfolio in the midst of a pandemic and beat net revenue consensus estimates for the sixth quarter in a row," said Robert G. Finizio, Chief Executive Officer of TherapeuticsMD. "During the quarter, we significantly reduced our operating expenses and cash burn."

Third Quarter 2020 Summary

* Total net revenue increased 80% to $19.3 million for the third quarter of 2020 as compared to $10.7 million for the second quarter of 2020. Product net revenue from product sales to wholesalers and pharmacies increased 62% to $17.3 million for the third quarter of 2020 as compared to $10.7 million for the second quarter of 2020. License revenue of $2 million from Knight Therapeutics, Inc. was recognized in the third quarter of 2020 as a result the approval by Health Canada of IMVEXXY and BIJUVA(r) for commercial sale in Canada. * Total operating expenses, excluding non-cash items, decreased by $11.0 million to $37.1 million for the third quarter of 2020 as compared to $48.1 million for the second quarter of 2020.

ANNOVERA(r)(segesterone acetate and ethinyl estradiol vaginal system)

* ANNOVERA net product revenue increased 250% to $6.4 million for the third quarter of 2020 as compared to $1.8 million for the second quarter of 2020. Net revenue per unit, calculated from sales to wholesalers and pharmacies, was $1,339 for the third quarter of 2020. * Approximately 5,200 ANNOVERA prescriptions were dispensed during the third quarter of 2020. ANNOVERA total prescription volume increased 115% for third quarter of 2020 as compared to the second quarter of 2020. * ANNOVERA gained preferred coverage with one of the top pharmaceutical benefit managers (PBM), representing approximately 20% of commercial lives, effective in the first quarter of 2021. This PBM will include ANNOVERA as the only preferred branded contraceptive vaginal ring agent and will remove NuvaRing(r) from its 2021 formulary. * ANNOVERA was added by Medi-Cal as of November 1, 2020 and will be fully implemented across all California lives (approximately 16% of national Medicaid population) by January 1, 2020.

IMVEXXY(r)(estradiol vaginal inserts)

* IMVEXXY net product revenue increased 35% to $6.8 million for the third quarter of 2020 as compared to $5.1 million for the second quarter of 2020. Net revenue per unit, calculated from sales to wholesalers and pharmacies, was $51 for the third quarter of 2020. Strong IMVEXXY refill rates continued with patients adhering to therapy. * Approximately 131,000 IMVEXXY prescriptions were dispensed during the third quarter of 2020. IMVEXXY new prescription volume increased 32% for third quarter of 2020 as compared to the second quarter of 2020, which should positively impact total prescriptions going forward. IMVEXXY total prescriptions increased 11% for same period. * IMVEXXY gained preferred coverage with one of the top PBMs, representing approximately 20% of commercial lives, effective in the first quarter of 2021. This PBM will include IMVEXXY as the only branded pharmaceutical product on formulary for the vulvar and vaginal atrophy (VVA) class and will remove Premarin(r) Cream, Intrarosa(r), Osphena(r) and Estring(r) from the 2021 formulary.

BIJUVA(r) (estradiol and progesterone)

* BIJUVA net product revenue increased 22% to $1.6 million for the third quarter of 2020 as compared to $1.4 million the second quarter of 2020. Net revenue per unit, calculated from sales to wholesalers and pharmacies, was $47 for the third quarter of 2020. * Approximately 32,000 BIJUVA prescriptions were dispensed in the third quarter of 2020. BIJUVA new prescription volume increased approximately 59% for the third quarter of 2020 as compared to the second quarter of 2020. Total prescriptions increased approximately 16% during the same period. * Anthem (includes many Blue Cross Blue Shield plans) moved BIJUVA from non-preferred to preferred formulary status as of October 1 , 2020.

Net Revenue

Three Months Ended Three Months Ended Three Months Ended

September 30, 2020 September 30, 2019 June 30, 2020

ANNOVERA $ 6,418,990 $ 399,952 $ 1,835,460

IMVEXXY 6,841,592 4,772,354 5,085,190

BIJUVA 1,646,320 490,705 1,352,001

Prenatal vitamins 2,435,903 2,550,330 2,428,382

Licensing revenue 2,000,000 15,506,400 -

Net revenue $ 19,342,805 $ 23,719,741 $ 10,701,033

Cost of Goods Sold/Gross Margin

* Cost of goods sold decreased $1.1 million to $3.3 million for the third quarter of 2020 compared to $4.4 million for the second quarter of 2020. The second quarter of 2020 included a non-cash write-off of $1.9 million primarily related to BIJUVA inventory obsolescence as a result of the Company's reprioritization of selling resources to ANNOVERA and IMVEXXY, together with the impact of the COVID-19 pandemic on sales forecasts of BIJUVA for future quarters, which was partially offset by the increase in cost of goods related to increased unit sales for the quarter. Gross margin percentage increased to 83% for quarter ended September 30, 2020 inclusive of the license revenue of $2 million (81% when excluding license revenue), as compared to 59% for the quarter ended June 30, 2020, which was impacted by the non-cash write-off of $1.9 million.

Expense, EPS and Related Information

* Total operating expenses, excluding non-cash items, decreased by $11.0 million to $37.1 million for the third quarter of 2020 as compared to $48.1 million for the second quarter of 2020. The decrease in operating expenses was primarily a result of the Company's cost containment efforts to reduce overall spend. For the remainder of 2020, the Company anticipates that spend will focus on delivering the necessary resources to support the launch of ANNOVERA, continued ramp-up of IMVEXXY, and ongoing brand management of BIJUVA. * Net loss for the quarter ended September 30, 2020 decreased to $32.6 million, or $0.12 per basic and diluted share, compared with $52.0 million, or $0.19 per basic and diluted share, for the quarter ended June 30, 2020. Net loss per share for the second quarter of 2020 was negatively impacted by inventory and sample expense charges related primarily to BIJUVA of $0.02 per basic and diluted share.

Balance Sheet

* As of September 30, 2020, the Company's cash on hand totaled $79.6 million, compared with $113.8 million as of June 30, 2020.

Potential vitaCare Divesture

TherapeuticsMD today announced the commencement of a process to divest vitaCare Prescription Services. In recent months, the COVID-19 pandemic has highlighted the value of pharmaceutical companies being able to connect directly with patients. The Company's vitaCare Prescription Services model is designed to make a complex process of filling prescriptions simple, cost-effective, and stress free for patients. This in combination with the rise of interest and investment in other hub service and pharmacy services companies has driven outside interest in vitaCare both from pharmaceutical companies seeking to utilize vitaCare for their products and from potential partners or sponsors seeking to acquire a controlling interest in vitaCare. The Company's goal is to unlock substantial value for its shareholders by divesting vitaCare to a partner who can capitalize the business opportunity. Based on initial indications received, the Company believes the enterprise value of vitaCare with the right partner can be upwards of $100 million, and, depending on the ultimate transaction structure, could potentially generate at least $50 million in non-dilutive proceeds to the Company, while also retaining an interest in the newly-capitalized business. The Company intends that vitaCare's existing dedicated management team will continue to operate the business to ensure the current level of service to TherapeuticsMD and new customers. The Company has retained Greenhill & Co. as an advisor for the transaction.

Sixth Street Update

The Company entered into an agreement with its lender, Sixth Street Partners, to lower the minimum cash balance requirement under the Company's Financing Agreement from $60 million to $45 million through year end.

Conference Call and Webcast Details

TherapeuticsMD will host a conference call and live audio webcast today at 8:30 a.m. ET to discuss these financial results and provide a business update.

Date: Monday, November 9, 2020

Time: 8:30 a.m. ET

Telephone Access (US): 866-665-9531

Telephone Access (International): 724-987-6977

Access Code for All Callers: 7747227

A live webcast and audio archive for the event may be accessed on the home page or from the "Investors & Media" section of the TherapeuticsMD website at www.therapeuticsmd.com. Please connect to the website prior to the start of the presentation to ensure adequate time for any software downloads that may be necessary to listen to the webcast. A replay of the webcast will be archived on the website for at least 30 days. In addition, a digital recording of the conference call will be available for replay beginning two hours after the call's completion and for at least 30 days with the dial-in 855-859-2056 or international 404-537-3406 and Conference ID: 7747227.

Please see the Full Prescribing Information, including indication and Boxed WARNING, for each TherapeuticsMD product as follows:

* IMVEXXY (estradiol vaginal inserts) at https://imvexxy.com/pi.pdf * BIJUVA (estradiol and progesterone) capsules at https://www.bijuva.com/pi.pdf * ANNOVERA (segesterone acetate and ethinyl estradiol vaginal system) at www.annovera.com/pi.pdf

About TherapeuticsMD

TherapeuticsMD, Inc. is an innovative, leading healthcare company, focused on developing and commercializing novel products exclusively for women. Our products are designed to address the unique changes and challenges women experience through the various stages of their lives with a therapeutic focus in family planning, reproductive health, and menopause management. The Company is committed to advancing the health of women and championing awareness of their healthcare issues. To learn more about TherapeuticsMD, please visit www.therapeuticsmd.com or follow us on Twitter: @TherapeuticsMD and on Facebook: TherapeuticsMD.

Forward-Looking Statements

This press release by TherapeuticsMD, Inc. may contain forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to TherapeuticsMD's objectives, plans and strategies as well as statements, other than historical facts, that address activities, events or developments that the company intends, expects, projects, believes or anticipates will or may occur in the future. These statements are often characterized by terminology such as "believes," "hopes," "may," "anticipates," "should," "intends," "plans," "will," "expects," "estimates," "projects," "positioned," "strategy" and similar expressions and are based on assumptions and assessments made in light of management's experience and perception of historical trends, current conditions, expected future developments and other factors believed to be appropriate. Forward-looking statements in this press release are made as of the date of this press release, and the company undertakes no duty to update or revise any such statements, whether as a result of new information, future events or otherwise. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of the company's control. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in the sections titled "Risk Factors" in the company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as well as reports on Form 8-K, and include the following: the effects of the COVID-19 pandemic; the company's ability to maintain or increase sales of its products; the company's ability to develop and commercialize IMVEXXY(r), ANNOVERA(r), and BIJUVA(r) and obtain additional financing necessary therefor; whether the company will be able to comply with the covenants and conditions under its term loan facility; whether the company will be able to successfully divest its vitaCare business and the proceeds that may be generated by such divestiture; the potential of adverse side effects or other safety risks that could adversely affect the commercialization of the company's current or future approved products or preclude the approval of the company's future drug candidates; whether the FDA will approve the efficacy supplement for the lower dose of BIJUVA; the company's ability to protect its intellectual property, including with respect to the Paragraph IV notice letters the company received regarding IMVEXXY and BIJUVA; the length, cost and uncertain results of future clinical trials; the company's reliance on third parties to conduct its manufacturing, research and development and clinical trials; the ability of the company's licensees to commercialize and distribute the company's products; the ability of the company's marketing contractors to market ANNOVERA; the availability of reimbursement from government authorities and health insurance companies for the company's products; the impact of product liability lawsuits; the influence of extensive and costly government regulation; the volatility of the trading price of the company's common stock and the concentration of power in its stock ownership. PDF copies of the company's historical press releases and financial tables can be viewed and downloaded at its website: www.therapeuticsmd.com/pressreleases.aspx.

THERAPEUTICSMD, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS September 30, December 31, 2020 2019 (Unaudited) ASSETSCurrent Assets:Cash $ 79,633,675 $ 160,829,713

Accounts receivable, net of allowance fordoubtful accounts of $857,176 and $904,040, 24,059,095 24,395,958respectivelyInventory, net 9,932,304 11,860,716

Other current assets 8,819,239 11,329,793

Total current assets 122,444,313 208,416,180

Fixed assets, net 1,969,929 2,507,775

Other Assets:License rights, net 36,959,305 39,221,308

Intangible assets, net 5,537,885 5,258,211

Right of use assets 9,975,725 10,109,154

Other assets 403,643 473,009

Total other assets 52,876,558 55,061,682

Total assets $ 177,290,800 $ 265,985,637

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITYCurrent Liabilities:Accounts payable $ 16,109,638 $ 19,181,212

Other current liabilities 31,220,484 33,823,613

Total current liabilities 47,330,122 53,004,825

Long-Term Liabilities:Long-term debt 237,051,202 194,634,643

Operating lease liability 8,907,995 9,145,049

Other long-term liabilities 35,000 -

Total long-term liabilities 245,994,197 203,779,692

Total liabilities 293,324,319 256,784,517

Commitments and Contingencies Stockholders' Equity:Preferred stock - par value $0.001;10,000,000 shares authorized; no shares - -issued and outstandingCommon stock - par value $0.001; 600,000,000and 350,000,000 shares authorized: 272,812 271,177272,812,271 and 271,177,076 issued andoutstanding, respectivelyAdditional paid-in capital 720,551,488 704,351,222

Accumulated deficit (836,857,819 ) (695,421,279 )

Total stockholders' (deficit) equity (116,033,519 ) 9,201,120

Total liabilities and stockholders' $ 177,290,800 $ 265,985,637 (deficit) equityTHERAPEUTICSMD, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)Three Months EndedThree Months endedNine Months EndedSeptember 30,June 30,September 30,2020

2019

2020

2020

2019

Product revenue, net$

17,342,805

$

8,213,341

$

10,701,033

$

40,294,495

$

18,238,857

License revenue2,000,000

15,506,400

-

2,000,000

15,506,400

Total revenue, net19,342,805

23,719,741

10,701,033

42,294,495

33,745,257

Cost of goods sold3,278,609

1,444,308

4,400,485

10,394,145

3,455,995

Gross profit16,064,196

22,275,433

6,300,548

31,900,350

30,289,262

Operating expenses:Sales, general, and administrative38,751,250

45,126,986

48,340,628

144,018,899

121,378,519

Research and development2,027,195

4,077,738

2,742,032

8,038,056

15,359,988

Depreciation and amortization258,787

141,959

256,557

777,338

363,956

Total operating expenses41,037,232

49,346,683

51,339,217

152,834,293

137,102,463

Operating loss(24,973,036

)

(27,071,250

)

(45,038,669

)

(120,933,943

)

(106,813,201

)

Other (expense) incomeLoss on extinguishment of debt-

-

-

-

(10,057,632

)

Miscellaneous income41,405

703,662

88,858

465,745

1,878,980

Interest expense(7,679,443

)

(5,599,005

)

(7,026,853

)

(20,968,342

)

(11,717,632

)

Total other expense, net(7,638,038

)

(4,895,343

)

(6,937,995

)

(20,502,597

)

(19,896,284

)

Loss before income taxes(32,611,074

)

(31,966,593

)

(51,976,664

)

(141,436,540

)

(126,709,485

)

Provision for income taxes-

-

-

-

-

Net loss$

(32,611,074

)

$

(31,966,593

)

$

(51,976,664

)

$

(141,436,540

)

$

(126,709,485

)

Loss per share, basic and diluted:Net loss per share, basic and diluted$

(0.12

)

$

(0.13

)

$

(0.19

)

$

(0.52

)

$

(0.53

)

Weighted average number of common shares outstanding, basic and diluted272,564,635

241,261,299

271,876,238

271,968,981

241,163,994

THERAPEUTICSMD, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited) Three Months Ended Three Months Nine Months Ended ended September 30, June 30, September 30, 2020 2019 2020 2020 2019

Product $ 17,342,805 $ 8,213,341 $ 10,701,033 $ 40,294,495 $ 18,238,857 revenue, netLicense 2,000,000 15,506,400 - 2,000,000 15,506,400 revenueTotal revenue, 19,342,805 23,719,741 10,701,033 42,294,495 33,745,257 net Cost of goods 3,278,609 1,444,308 4,400,485 10,394,145 3,455,995 sold Gross profit 16,064,196 22,275,433 6,300,548 31,900,350 30,289,262

Operatingexpenses:Sales, 38,751,250 45,126,986 48,340,628 144,018,899 121,378,519 general, andadministrativeResearch and 2,027,195 4,077,738 2,742,032 8,038,056 15,359,988 developmentDepreciation 258,787 141,959 256,557 777,338 363,956 andamortizationTotal 41,037,232 49,346,683 51,339,217 152,834,293 137,102,463 operatingexpenses Operating loss (24,973,036 ) (27,071,250 ) (45,038,669 ) (120,933,943 ) (106,813,201 )

Other(expense)incomeLoss on - - - - (10,057,632 )extinguishmentof debtMiscellaneous 41,405 703,662 88,858 465,745 1,878,980 incomeInterest (7,679,443 ) (5,599,005 ) (7,026,853 ) (20,968,342 ) (11,717,632 )expenseTotal other (7,638,038 ) (4,895,343 ) (6,937,995 ) (20,502,597 ) (19,896,284 )expense, net Loss before (32,611,074 ) (31,966,593 ) (51,976,664 ) (141,436,540 ) (126,709,485 )income taxes Provision for - - - - - income taxes Net loss $ (32,611,074 ) $ (31,966,593 ) $ (51,976,664 ) $ (141,436,540 ) $ (126,709,485 )

Loss pershare, basicand diluted: Net loss per $ (0.12 ) $ (0.13 ) $ (0.19 ) $ (0.52 ) $ (0.53 )share, basicand diluted Weightedaverage numberof common 272,564,635 241,261,299 271,876,238 271,968,981 241,163,994 sharesoutstanding,basic anddilutedTHERAPEUTICSMD, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)Nine Months EndedSeptember 30,2020

2019

CASH FLOWS FROM OPERATING ACTIVITIESNet loss$

(141,436,540

)

$

(126,709,485

)

Adjustments to reconcile net loss to net cash used in operating activities:Depreciation of fixed assets576,459

223,750

Amortization of intangible assets200,879

140,206

Write off of patent and trademark costs584,509

78,864

Write off of deferred financing fees275,379

-

Non-cash operating lease expense1,050,940

711,836

(Recovery of) provision for doubtful accounts(46,864

)

95,097

Lease impairment81,309

-

Inventory obsolesence reserve5,744,464

-

Loss on extinguishment of debt-

10,057,632

Share-based compensation8,502,044

7,859,357

Amortization of intellectual property license fee2,262,002

15,998

Amortization of deferred financing fees1,370,118

582,829

Changes in operating assets and liabilities:Accounts receivable383,727

(4,354,890

)

Inventory(3,816,053

)

(7,265,174

)

Other assets2,003,079

(1,128,515

)

Accounts payable(3,071,574

)

1,389,665

Accrued expenses and other current liabilities(3,812,919

)

3,402,511

Net cash used in operating activities(129,149,041

)

(114,900,319

)

CASH FLOWS FROM INVESTING ACTIVITIESPatent costs(1,065,062

)

(1,068,542

)

Purchase of fixed assets(38,613

)

(2,089,413

)

Security deposit35,000

(20,420

)

Net cash used in investing activities(1,068,675

)

(3,178,375

)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from exercise of options and warrants271,678

108,656

Repayment of the Credit Agreement-

(81,660,719

)

Proceeds from the Financing Agreement50,000,000

200,000,000

Payment of deferred financing fees(1,250,000

)

(6,652,270

)

Net cash provided by financing activities49,021,678

111,795,667

Decrease in cash(81,196,038

)

(6,283,027

)

Cash, beginning of period160,829,713

161,613,077

Cash, end of period$

79,633,675

$

155,330,050

Supplemental disclosure of noncash investing and financing activitiesWarrant granted in relation to Financing Agreement$

7,428,179

$

-

Amount accrued for intellectual property license$

-

$

20,000,000

Supplemental disclosure of cash flow informationInterest paid$

19,172,847

$

12,446,792

View source version on businesswire.com: https://www.businesswire.com/news/home/20201109005481/en/

CONTACT: Nichol Ochsner Vice President, Investor Relations 561-961-1900, ext. 2088 Nochsner@TherapeuticsMD.com