Agile Therapeutics, Inc.

Good morning, and welcome to the Agile Therapeutics Third Quarter 2023 Financial Results Conference Call. Please note, today's event is being recorded. I would now like to turn the conference over to Matt Riley, Head of Investor Relations.

Thank you, Operator, and welcome to everyone joining us on today's call. With me today are Al Altamari, Chair and Chief Executive Officer, and Scott Clionty, Chief Financial Officer. Our Chief Commercial Officer, Amy Wells, will also be available for the Q&A portion of today's call. Our prepared remarks today 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 fourth quarter 2023 and first quarter 2024, management's expectations for our future financial and operational performance, including our expectations regarding the market growth of Twerla, our operating expenses, our business strategy, our partnership with AFAXIS and its ability to promote growth, our relationship with telemedicine providers and their ability to make Torella broadly available to patients, and our assessment of the combined hormonal contraceptive market generally, among other statements regarding our plans, prospects, and expectations. Such statements represent our judgments as of today. Our non-promises are guarantees and may involve risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. During today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release issued today, which can be found on the investor relations section of our website. For more information concerning risk factors that may affect the company, please refer to our filings with the SEC, which are available through the investor relations section of our website. 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. And with that, I'll turn the call over to Al.

Great. Thank you, Matt. And thank you to everyone for taking the time to join our call this morning. In the third quarter, 2023, we once again achieved all-time highs across several leading indicators, including net revenue, overall demand, factory sales, and gross margins. The combination of continued strength and execution and increasing momentum gives us confidence that we will achieve our 2023 net revenue goal of at least $25 million. And today we're announcing that we expect to generate positive cash flow from operations with our single product, Twirla, in the first quarter of 2024. It's been approximately one year since we recalibrated our business plan to emphasize partnerships that maximize growth while simultaneously managing our operating expenses or OPEX levels. In the past year, we've seen consistent quarter-over-quarter improvements across all of our key performance areas, and we believe there is room for additional growth both in the fourth quarter of 2023 as well as into the first quarter of 2024. I'll now get into some of the details of our third quarter 2023 performance that supports our confidence in achieving our 2023 net revenue goal and generating positive cash flow from operations in the first quarter of 2024. Net revenue. Third quarter of 2023, net revenue was $6.7 million. which represents a 21% increase from the second quarter of 2023. The continued increase in net revenue was primarily driven by our ability to once again accelerate twirl of demand across both the retail and non-retail channels. Twirl of demand for the third quarter of 2023 was 74,325 total cycles, a 33% increase from the second quarter of 2023, a new single quarter record. Retail demand, as reported by Symphony, was 40,196 total cycles, a 13% increase from the second quarter of 2023, also a single quarter record. Non-retail demand was 34,129 total cycles, a 71% increase the second quarter of 2023 as a reminder our non-retail demand is comprised of data from both symphony as well as our wholesalers factory sales for the third quarter 2023 as reported by our wholesalers with 74 424 cycles a 20 increase from the 61 770 total cycles that were reported in the second quarter of 2023 Gross margin. Along with our growth in sales and demand, we continue to make progress towards our goal of generating gross profit, which has become a more meaningful part of our story as we approach positive cash flow from our operations. In the third quarter of 2023, we generated gross profit of $4.2 million, or gross margin of 63%, compared to 3.2 million, or a gross margin of 58%, in the second quarter of 2023. As our net revenue levels increase and our OPEX level remains steady, we are focused on increasing both gross margin and gross profit as we expect to see continued improvement moving forward. OPEX for the third quarter of 2023 were $8.2 million, a 2% decrease from the $8.3 million reported for the second quarter of 2023. Early in the call, I alluded to recalibrating our business plan approximately one year ago. The recalibration focused on the following. Building a scalable commercial platform without adding fixed costs by driving toilet in the five key states that have strong reimbursement profiles and are estimated to reach approximately 45% of the women 18 to 24 years old. and collaborating with our partners who we believe can drive additional twirl of growth by expanding our distribution channels. Compared to the first nine months of 2022 versus the first nine months of 2023, our recalibrated business plan has delivered the following, net revenue growth 132%, twirl of demand growth 156%, OpEx reduction of 31%. The growth that our plan has delivered to date affirms our belief that our model is sustainable and we expect to see continued twirl of growth in both the fourth quarter and into 2024. We see additional growth and upside potential coming from the following areas. First, further penetration in the five key states. We believe there's room for growth through increased penetration into our prescriber base in these states, as well as focusing on converting current non-riders of Twirla. Second, additional volume from the AFAXIS customer network. While we grew non-retail demand an impressive 71% from the second quarter of 2023 to the third quarter of 2023, we estimated that we are currently reaching less than 20% of the total AFAXIS customer network and plan to tap into additional non-retail volume moving forward. Third, advancing Twirla through telemedicine platforms such as Nurex, 28 Health, and Pandia are all part of our strategy to sustain growth in the retail channel, our most profitable channel. Before we open the Q&A, Scott will comment on a few other financial results, which we believe also demonstrate continued progress for our business and fiscal discipline. We'd also encourage you to read the press statement and our Form 10-Q for a broader review of all our financial results for the third quarter of 2023. I'll turn it over to Scott.