This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk00: Good afternoon everyone and welcome to the EBOFEM Biosciences results call for the second quarter of 2022. If you haven't done so already, I encourage you to access the presentation that accompanies this call and the press release we issued after market, both of which may be found at EBOFEM.com under the industry tab. Before we begin, I would like to remind you that remarks on this call will contain forward-looking statements, which are made only as of today, August 4, 2022. For a more detailed description of important risk factors that could cause our actual results to differ materially, please refer to our annual report on Form 10-K and our most recently filed 10-Q. Also, we will discuss estimates and other statistical data made by independent parties and by the company relating to the market size and growth and other data about our industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. With that, I'll turn the call over to MOFM CEO, Sondra Pelletier.
spk01: Thank you, Amy, and thank you to everyone for joining us today. Today, we are reporting another strong quarter of improved operating results, highlighted by a 42% increase in SEXI net product sales. We reduced our total operating expenses by 8%, we narrowed our loss from operations by 16%, and we expect further growth in Q3 and beyond, driven by ongoing penetration of the $7.9 billion U.S. contraceptive market. For those of you that are new to EvoFem, and as an important reminder, our innovative non-hormonal contraceptive product, Phexy, is the first and the only FDA-approved woman-controlled product that does not impact a woman's ovaries in any way, nor does it prevent implantation of a fertilized egg. With the growing awareness of Phexy and the concerns amongst women about sustainable access to contraception, EvoFem is poised to capitalize on the current environment. With that, I will ask our CFO, Jay Files, to review the financial results. Jay?
spk09: Thank you, Sandra. Today, I'm going to focus on the second quarter of 2022 results relative to the first quarter of 2022. Net product sales increased 42% to $6 million, driven by higher ex-factory sales. Our gross to net was 40% for the second quarter of 2022, and we continue to expect GTN will remain about this level or better. Total operating expenses decreased 8% to $30.5 million. This was mainly driven by lower R&D costs, which were $7.7 million in Q2. The decrease reflects lower costs of the Phase III EpiGuard trial as participants completed and exited the study. We expect R&D costs to come down in the third quarter since the last patient visit was completed in late July. R&D costs should be significantly lower in Q4 and beyond. Selling and marketing costs were $400,000 lower in Q2, while G&A costs were up $100,000 due to legal fees. As a result of the higher revenue and lower operating expenses, our loss from operations improved 16% to $24.4 million. We continue to expect 2022 net product sales will be in the range of $30 to $35 million, with momentum building in the second half of the year. This represents 264% to 325% growth year over year. We expect gross to net will be 40% or better, trending lower in the second half of the year. We remain on track to reduce costs by 50 million in 2022. Our total operating expenses were 25.3 million lower in the first half of the year versus the same period of 2021. Finally, we still expect to be cash flow breakeven on a quarterly basis no later than the end of 2023. During the second quarter, we raised net proceeds of $18.1 million from an underwritten public offering and $2 million from our equity line of credit, which we terminated in May. Through August 3, 2022, we received $22.4 million from the exercise of common warrants that were issued in the May public offering. At the close of Q2, we had $19.9 million in unrestricted cash and $1.6 million in restricted cash. Based on our current expected operations, we believe we have sufficient cash to fund operations into Q4. This does not include potential non-dilutive capital for commercial alternatives we are exploring and evaluating to enhance shareholder value, like U.S. co-marketing and co-promotion partnerships. We continue our efforts to regain compliance with the NASDAQ capital market minimum bid requirement. In May, we closed above a dollar for 10 consecutive trading days as required by the NASDAQ listing panel. However, the panel took the unexpected step of disregarding FFM's achievement of this compliance milestone. Ultimately, the panel granted our request for continued listing of our shares on the NASDAQ capital market without requiring a second reverse stock split provided the company is able to evidence a closing bid price of at least a dollar per share for at least 10 consecutive trading days by August 22nd. Given our solid Q2 results, we hope for strong support from investors who see our ongoing growth in the 7.9 billion contraceptive market and the upside opportunity at SCI prevention and believe FFM is a smart investment, especially at the current share price. And with that, I'll turn it back over to Sandra.
spk01: Building on what Jake said, Since April 1st, we have announced 16 positive developments that will all favorably impact our go-forward business and enhance our ability to deliver long-term shareholder value. We have presented and published four new data sets on PheXy to the medical community. The most important of these was data demonstrating that PheXy prevented 99% of pregnancies per act of sex in the phase three Empower Clinical Trial. which is resonating with healthcare providers and women alike. This should increase uptake, translating into prescription growth. As an organization, we proactively developed and launched a new educational birth control chart covering all available methods to assist providers in patient contraceptive counseling. It replaces a far outdated chart many OBGYNs still had on their wall which was developed before new contraceptive methods like FEXI came to the market. It assists healthcare providers to deliver patient-centered care. Better and more informed counseling should increase utilization, translating to prescription growth of FEXI. Media coverage of Avofem and FEXI spiked dramatically since June, including features in People Magazine, NBC News, CNN, and more. We partnered with A360 Media, placing FEXI branded content in their widely read entertainment and lifestyle magazines on every shelf, as well as online media. We forged a FEXI manufacturing partnership that's expected to decrease our cost of goods up to 45%. The FDA extended FEXI's shelf life to four years. A new patent was allowed covering FEXI's composition of matter and providing protection through at least 2033, and we also strengthened our leadership team and our board of directors. We continue to secure coverage for FECSI with payers. Our largest win is a long-term contract with one of the largest PBMs in the nation that added FECSI to its national template formulary with no restrictions. This is significant. and we look forward to increased FECSI prescriptions among this PBM's 28 million participants. This agreement is also expected to save us upwards of $1 million a year by removing prior authorizations from FECSI prescriptions for this PBM. Each prior authorization was costing us $35 to process, and we're delighted to remove this cost from our operating expense. Our approved claim rate has continued to increase through 2022, and currently more than 70% of FEXI prescription claims are being approved. Every new agreement means more women are able to fill and refill their FEXI prescriptions, and we look forward to the positive impact this will have on FEXI growth. The biggest catalyst that the market responded to was the Supreme Court ruling on Roe versus Wade on June 24th. The media focus on contraception in the wake of this decision provided a tailwind to EvoFem by increasing visibility among investors as well as consumers. This has created a tremendous opportunity for our company. Many of you who are new to the stock since that date, I want to welcome those of you. And for those of you that have been with us for a while, I want to thank you for your continued support as we build on these accomplishments. Q2 was another consecutive quarter of increasing net product sales and improved operating loss. We are consistently delivering growth quarter over quarter. This directly reflects the heightened recognition of FECSI's innovative attributes among women and prescribers and growing traction with insurers. We expect another strong quarter in Q3 based on the current trends and the indicators. And as Jay mentioned, we remain on track to achieve our 2022 revenue guidance of 30 to 35 million. Last week, following President Biden's executive order on ensuring access to reproductive healthcare, the U.S. Departments of Health and Human Services, Labor, and the Treasury released guidance clarifying that group health plans and insurers must cover contraceptives at no cost to individuals. The ACA guarantees coverage of women's preventative services including free birth control and contraceptive counseling for all individuals and covered dependents with reproductive capacity. This encompasses all contraceptives like Phexxi that are approved, granted, or cleared by the FDA. So what does this mean for Avosem? It means more plans covering Phexxi at no cost to women. And it means them doing that sooner with no restrictions. It means less money that goes to copay programs that increases our profitability of every VEXI prescription. FFM's market access team is having renewed discussions with insurers and PBMs that were previously noncompliant with these guidelines to advance the removal of impermissible barriers such as death edits, claim denials, and prior authorization letters to ensure that women have access to VEXI at no out-of-pocket cost. As a reminder, there are 42.2 million potential FEXI users in the United States. The total contraceptive market is estimated to be $7.9 billion. Every 1% market share of the 42.4 million women in our addressable market represents significant net product sales for Avofim. Those of you who are looking at this slide, it is one of my favorite. At our current WAC of $294 per box of 12 FEXI applicators, applying the Q2 growth to net of 40%, we net $176.40 per box. If we're being conservative and women only get four boxes of FEXI per year, each 1% market share equals $298 million in FEXI sales. However, the reality is that most providers write a six-month prescription. So when women get six boxes of FEXI per year, each 1% market share equals $447 million in VexyNet sales. And when our growth to net improves to 35%, the economics are even more favorable, and we also know a number of women are getting far beyond six-month prescription. Contraception is a profitable business, period. Especially, though, for a company with an FDA-approved proprietary product with no generic competition or equivalent. Moving on to the program that we expect to double our market opportunity, providing significant upside for shareholders and women, is our Avogad study, because every sexually active woman is at risk for STI infection. On Monday of this week, We announced the last patient visit in our Registrational Phase 3 clinical trial evaluating Phexxi for the prevention of chlamydia and gonorrhea in women. Success in STI prevention would expand our market opportunity beyond women in their reproductive years. Research has indicated that two-thirds of current lubricant users would replace their lubricant with Phexxi if approved for the prevention of chlamydia and gonorrhea. An additional study found that 49 million Americans use personal lubricants in 2022. Twenty percent of people in the United States had an STI on any given day in 2018. The CDC estimates 4 million and 1.6 million new cases of chlamydia and gonorrhea, respectively, and all of those occurred last year. Infected people are often unaware of and don't seek treatment for their infections. Chlamydia is the most frequently reported bacterial infection in the U.S. Almost 60% of women infected with chlamydia have no symptoms, yet it's one of the leading causes of infertility in the U.S., which we know is emotionally and financially daunting. There are no FDA-approved, woman-controlled prophylactics to prevent these STIs. The CDC states that all sexually active people are at risk. The need here is enormous. Regardless of the contraceptive product women are choosing, they are still at risk. This widens the market opportunity for shareholders and women significantly. We're on track to report our top line phase three study data in October. We expect positive outcomes would enable us to submit regulatory applications to the FDA in the first half of 2023. These will be S&DA filings seeking to add prevention of chlamydia and gonorrhea in women to FEXI's label. We have fast-track designation for both potential new indications, so we could receive FDA approval for these indications in 2023. I'd like to point out that we believe our current valuation does not reflect the opportunity we are addressing with FEXI in the $7.9 billion U.S. contraceptive market. It does not factor in the near-term upside potential in STI prevention. We believe this presents an incredible opportunity for the right investor, and we hope that we can count on your support. With that, operator, please open the call to questions.
spk03: Sure. Ladies and gentlemen, if you'd like to ask a question, please press star 1. Again, to ask a question, please press star 1. One moment while we wait for questions. And we do have a question coming in now. This first one is from David Anselm Piper Sandler.
spk04: Hi, David. David, are you muted? We can't hear you.
spk07: Maybe your line is muted. Hey, can you hear me now?
spk06: Yeah, we can hear you now.
spk07: Okay, my apologies. I was on mute. So I joined late, but I, you know, so you may have adjusted, Sandra, but, you know, the first question I had is, you know, since the, you know, the overturning of Roe v. Wade, what are you hearing in the field in terms of just level of interest and, you know, not just from, you know, practitioners, but also from patients? That's number one. And then number two, different question. This is on the gross net, which I feel like I always ask, but I need to. And that is, with the contracting and with the environment being what it is, for the better, of course, how should we think about steady state beyond this year? Thanks. Yeah.
spk01: Thank you for the question. So I will start and then I'll have Jay to talk about Chris and Annette. So here's what we're hearing in the field. I mean, as you would expect, there is a heightened sense of urgency since the Supreme Court decision on abortion. We are hearing more and more interest from health care providers in wanting to meet with our sales team and wanting to know and understand the entire offering that EVOFEM has. We also are actually having a lot of HCPs, depending on their state, talking about what might end up being less choices that they will have available to offer to women. And so rolling out this educational birth control chart, and I don't know if you were on at that point, David, but one of the things that's happened for more than 10 years, there has been no update to this patient counseling chart. And when you're in a waiting room and you're, frankly, news from the waist down waiting for your doctor to come in and you're, you know, staring at the wall or the ceiling, oftentimes, you know, these charts really show women what are their choices, what is the myriad of choices, and what choice is best for them. So we took proactively upon ourselves, in fact, our chief commercial officer was in the field and repeatedly saying that Look, these are outdated charts. If anybody wants to counsel a woman, they're so busy in their day, isn't it better? So the charts have been effective. As an example, we have reps calling in and saying that they brought in one or two charts. We have offices calling us constantly saying, we have eight exam rooms. We need at least eight charts. So we're hearing that counseling women has become much more pervasive than before. We really weren't, you know, of course some doctors counsel patients, but now even the ones that weren't counseling as much are counseling more because women are nervous and they want to know about sustainable access. We've heard a lot of people coming in saying they're worried about maybe what they're using might not be available and should they start to switch to something else. But one of the biggest things that we have heard is that as physicians understand that our product does not do anything to negatively impact a woman's ovaries, there has been an interesting focus. The doctors who are writing FEXI perhaps for breastfeeding women or for cancer patients or for women who just can't use hormones are now expanding their mind to say, you know what, I need to broaden who I think the FEXI woman is. And the biggest lever for that was this analysis we did that showed that based on acts of sex, that 99% of the time, FEXI prevented pregnancy. So I would say that for us, it is bittersweet. I mean, you know, come on, I run a women's healthcare company. Obviously the SCOTUS decision was tough. We expected it though. But I would tell you that the increase in interest for FEXI has been very significant. And so that's what we're hearing. But the final thing I would say is that we are hearing though a lot of trepidations depending on where the states are. where some of these representatives are, where people are starting to brace themselves. You know, they're hoping that it doesn't go further than just the decision on abortion, but people are already starting to, you know, brace themselves and be skeptical about what might be next.
spk09: You want to talk about GTN? Sure. How's it going, David? To follow up on your GTN question, still always valid, so keep on asking it. We were very pleased, obviously, to see GGN maintain its consistency as we believed it would at the end of Q1 in that 40% range. We are reaffirming guidance that we do anticipate that continuing through the end of the year and a very strong possibility to see it lower as the year goes on. That is largely attributable to not only the new PBM contract, but Some of the other wins that you saw reported on some of our press releases obviously during the quarter and then we get summarized here. Why those are important is because you start seeing them come through with less utilization of our copay programs. And why that is so significant is of that 40%, a little less than half of that is attributable to our copay programs. So anytime you can obviously start chipping away at that, that's going to have a direct benefits to our net revenue number on every sale of FEXE as it goes forward. Now, there's always going to be costs associated with distributor and other administrative costs that flow through. Those are never going to go away. With volume increases in the next few years, we do anticipate we could probably negotiate down some distributor costs, but in lieu of that, We do know that ultimately, you know, a good 20 to 25 percent is probably here to stay for the time being. It's the cost of doing business. But we do think that ultimately over the next few years, we can get down to 35 percent. And 30 percent is a reality at some point in the near future. And then some of it, you know, I do expect us to give updated guidance at the time next year when we see full ACA mandate coming through. We get a little bit of headwind and actuals coming through and see just how significant that impact is. We'll always have public-private mix. We'll always have plans that are exempt from ACA. That's always going to be there, but we don't think those will have a negative impact on GTN, and we do see continued improvement as we move forward.
spk04: Does that address your questions, David?
spk03: All right. We do have another question coming in from Yale, Jen, Slade Law & Company.
spk10: Good afternoon. And thanks for taking the questions. The first question is that it's certainly a great quarter, last quarter. Are you guys going to review some what's the script numbers in the last quarter? Does not have a follow-up question.
spk01: Well, here's what we can tell you. We can tell you that we have had, you know, quarter over quarter, we have seen a 11 and 12% growth. So, we've seen an increase. And, you know, 1 of the things that we have done as we shared on the call is, for example, when we rolled out the a 360 media rollout, it drove a 16% spike in demand just after the, after the initial 2 weeks. And. So, what we, what we have been seeing is that we are seeing growth. We've actually seen a lot of people and distributors and wholesalers getting ready for the rollout that just happened. We did a whole series of interviews with Annie Murphy that's gotten a lot of media attention. There's a lot more media rollout to come as a result of those interviews. So, particularly also July 1st was the day that this largest PBM came on board with no restrictions. we really feel like, you know, we're actually now not just continuing growth, but you'll see, I think, much more growth and momentum, you know, as time goes on over the next few weeks.
spk10: Okay, great. That's very helpful. And one more question here is that the third quarter is already roughly a month and a few days, and you anticipate and you've probably seen that the revenue growth is increasing Any colors you can sort of share for this brief month outcomes or any kind of trends you can indicate? I'll take it. Okay.
spk09: Okay. Yeah. So, yeah, I won't give you too much insight, obviously, just to not give too much guidance going forward in the details. But what, you know, kind of reiterate the guidance we gave. Obviously, 30 to 35, we are still firmly holding onto this for guidance for the year. That means some sequential growth quarter over quarter, obviously, as it gets there. Second half of the year, we always knew that was going to be the stronger half of our year, just building on the first half. And things are falling into place very nicely as far as getting this large PBM win and having ACA mandate coming on. Both of those, we believe, are going to be strong headwinds heading into the second half of the year. So I would look to see some good sequential growth, as we've shown already, quarter over quarter for the first half of the year, continue through the second, and, you know, we'll fall in between that 30 and 35 when we get to year end.
spk10: Okay. Maybe squeezing one more question, what you mentioned about the GTN improvements, and what do you see that the reason ACA regulation will be mandated? And would that be any impact you could see change over the second half of this year, or even small changes on the RTT end?
spk09: Yeah. I don't know if you saw the press release we put out. It was at last week, just about the very recent final push where it basically implied that you need to follow ACA. It could be interpreted as immediately. You know, guidance earlier in the year came out this January 1st. So there's a bit of question as to if they just meant we're done hearing complaints and you guys need to comply immediately. But, you know, that's why we think the timing of it will continue to roll out as the second half of the year goes on. And we will start to see those, you know, continued improvement in the copay utilization program. And ultimately, it will come down to enforcement from the government agencies that have direct oversight over the payers and PBMs. And we think the current administration and the key members on committees are taking this extremely seriously. You know, coupled with Sandra's continued relentless pursuit of them, I can't say I blame them. They're fortunate.
spk01: Well, and the one thing, you know, just to add is that We have heard from a lot of these offices that we have consistently been talking to and reaching out that there is a huge push from certainly the Democratic side to make sure that they are leaning in and stepping up for women. And in the past, although they didn't want to know specifics, all of these offices of Congress people and senators are now asking us for specific examples when women are getting denied. so they can reach out directly in hopes that they will be seen as the halo effect of being the ones that are advocating for and standing up for women. What's been refreshing is that we have seen the kind of action, should have happened sooner, but we are seeing very serious and deliberate action, i.e. enforcement occurring. It's optimistic, you know, so at least when women are being denied, you know, safe access to abortion, they will get more and more readily get access to contraception.
spk10: Okay, great. Thanks a lot for the detailed information. And again, congrats on the performance of this quarter.
spk01: Thanks very much. Yeah, thanks for your question.
spk03: Okay, our next question is coming from Annabelle Samimi of Stifel.
spk05: Hi, this is Stacy calling in for Annabelle. Congrats on a really great quarter. Just two questions on our end. Can you give us some metrics around the VitaCare partnership and how that's been helping with prescription fulfillment? And secondly, we're really excited to see the last visit having occurred for the EVOGAR trial. You know, in light of the latest development with Roe versus Rade being repealed and the increased focus in contraceptions, you know, more the need to protect it, Is there any further thought to how you will treat the STI profile of EVA 100 if successful? Is it protective as an addition, or is it better to remain its own product? I know the last iteration was that it would be a profile enhancer to contraception.
spk01: Yeah, thanks for the question. Jay, do you want to start?
spk09: Sure. Yeah, I'll jump in on VitaCare. So, just a little bit of specifics for the quarterly activities. We did do a pilot-style rollout with them, and it was extremely successful right from the get-go. We are very happy to see that. Obviously, a fairly complex process with the new platform going out, so we wanted to make sure that the pilot program was effective and well-received and any kinks were worked out. Subsequent to that, we've actually rolled that out fully to the field starting August 1st. And we're already seeing our exes come in from that process feedback from the sales reps, doctor's office, all across the board and patient experiences have been extremely favorable. And as a reminder, this is, you know, we thought on the term white glove. But really, this is truly what this experience is and beyond that, and really integrating patients with a service that really follows them through the entire process. all the way through ensuring that they get their refills on a timely basis, the process itself is fully integrated and it doesn't come in from multiple sources and other multiple vendors. So this is truly a one-stop shopping porthole for us to really fall back on and our patients to use. And we're extremely excited about the initial results. And I think for sure we'll have definitely much more insight as to how that's been rolled out from the initial launch on August 1st when we talk for Q3 results.
spk01: And, you know, our Chief Commercial Officer, Catherine Atkinson, is also with us on the line. Catherine, is there anything you want to add just to, you know, fully color the VitaCare situation?
spk04: Catherine? Oh, maybe she just can't get unmuted.
spk00: Oh, technical difficulties. They happen to all of us. Yeah. We can follow up. We will follow up.
spk03: Catherine's line is now open.
spk06: Catherine, would you like to add anything? Yes. I'm sorry. I was talking. They may have muted me. But yeah, we've seen some great success. So as Jay said, we kind of beta tested it and slowly rolled it out. Of all the prescriptions that came in, which were many, we've had 53% already approved and VitaCare continues to work on the remainder. We rolled it out to the field on August 1st and we had about 20 already go in. And so we're really excited about it. So we'll have far more color coming after this quarter for you, but really great performance up through that point, you know, in our previous program, we were below the 50% and we're not even finished with those first ones that came in. So already off the bat, really great numbers.
spk01: And then I want to address your question regarding EvoGuard and the STI indications. And I just want to make sure that the question, so can you just frame it again? So you want to know whether or not the expanding the label we think will be as advantageous as being a separate product? Yes, that's correct. Okay. So one thing, so in the work that we have done around diligence with providers and diligence with payers, We're looking at a couple of different things, and the short answer is expanding the label we have concluded will allow us the same opportunity as if it were a separate NDA. The financial positive is that the SNDA submission will be no cost to us, which is fabulous from a financial standpoint, but even if there was a cost and we thought it was going to be better for shareholders and women, we certainly would have incurred that cost. Where we are now is when you look at a product that, as you may or may not remember, those of you on the call, we were able to actually get a publication in a sexual satisfaction journal. When you look at a product that has lubricating properties and you have a product that will prevent pregnancy with no systemic activity and no hormones and not negatively impacting your ovaries or your ability to get pregnant down the road and prevent from chlamydia and gonorrhea. I will tell you that in all of my years I've been in women's health my entire life, we used to do these think tanks where we would say to global leaders, women, all kinds of influencers, let's just talk about Nirvana. What would be the most amazing product? And consistently people would say something that you wouldn't suffer from side effects, something that you only used when you needed it, and something that would protect you from getting sexually transmitted infections. Well, let me introduce you to Fexy. And I mean that. And of course, I would say that as the CEO of this company, but I was attracted to this company because of this asset. After spending my full life looking at Me Too products in crowded categories, understanding that when generics come to a market, they erode a brand by 50 to 60%, but recognizing most importantly that women don't have sex every day. And men have had condoms for 150 years. And it is far time that women have a product where they can have sex on demand, with pleasure, without hormonal side effects, the timing could not be better for fexy. And it is really important to know that how our product works, as a vaginal pH modulator, women intuitively understand it. Doctors intuitively understand it. And so it's simple, and it's easy to use, and women feel really good about it. The short answer is we feel very good that this NDA submission and expanding this label. Now, down the road, we may decide with this sort of trifecta of all of these wonderful things that maybe we want to do a relaunch down the road. But what I would tell you is we feel that the market opportunity is so significant because, as we said, whether you're on a pill, a patch, or an IUD, you are still at risk. And chlamydia is now so pervasive, 4 million cases, And final comment I want to say is after being in women's health my whole life, I have to shamefully admit that I didn't even recognize that chlamydia was one of the top reasons for infertility. And when we start to talk to young women, they're already thinking about their ability to get pregnant when they want to, even though it might be five or six or ten years down the road. So if you're protecting yourself from getting pregnant and you're also worried about your ability to get pregnant, why would you not use a product like Vexxie?
spk05: That was extremely helpful. Thank you so much.
spk03: Yeah.
spk04: Thank you for your question.
spk03: Okay. Our next question is coming from Ram Silvaju of HC Wainwright.
spk08: Thanks so much for taking my questions. Just three relatively quick ones. First of all, I was wondering if you could comment at all on any emergent trends you are seeing in sort of private pay or non-reimbursed demand for FEXI, particularly in the wake of the Supreme Court ruling? Secondly, I was wondering if you have sort of an updated take on returning to the concept that was mooted early in Fexby's commercial trajectory regarding the population of women who are undergoing cancer treatment of specific categories that would lead them to be ineligible for hormonal forms of birth control. And then lastly, I was wondering if you have updated thoughts on assuming positive readout in STI prevention, how you would go about strategically optimizing the value of the drug in that indication and whether that would involve any kind of business development activity, particularly in the context of the U.S. commercial opportunity. Thanks.
spk01: Thank you very much for your questions. I would like to start backwards if that's all right. I'm going to start with the last one, meaning the STI opportunities. And the short answer is definitely. And why I'm saying definitely is that when we expand the label to add on prevention of chlamydia and gonorrhea, we want to provide much broader access to a much wider population. And so we, as you heard from Jay's comments, we are looking at co-promotion and co-marketing partners. We believe that, yes, certainly OBGYNs will be the top prescribers, but we do think that it will expand beyond that, frankly. So we are trying to be very strategic and wise about finding a partner that has a footprint and that is looking for another opportunity to tell an additional story. So we're actively doing that right now. I will tell you that I know Those of you who've been with us for a while, when we talk about business development, we are a little trepidatious because we could get a distribution agreement tomorrow. Yes, we have waited so that we can get the right partners, but for STI, the strategic partnerships are multiple and our head of business development Full-time, 100% focus on these partnerships has said that now with Roe versus Wade, what's been fascinating is that the people contacting us is so constant and continuous. So we are going to look to align with somebody in the U.S. to expand our reach, still obviously controlling the branding and the messaging, but to see if there's an appropriate partner. And we are continuing our efforts outside of the U.S. to bring in non-dilutive capital. Then your second question. Yeah, encode it. And so one of the things that we have tried to see if we can identify out of the 800,000 women that are cancer patients is, is there a way to see if there are carve outs that we could identify who they are? What I will tell you is from feedback from our sales organization, And we also have our head of sales, a gentleman who spent his career in oncology, by the way. He's the one that helped us align with ENCODA for this important relationship that we have. What's happening is that as time passes, and even though Roe versus Wade, and you would think, what does that have to do with cancer patients? What has been extraordinary to see is that regardless of the physician type, but oncologists are continuing to open their eyes up that one, they certainly don't want their cancer patients to become pregnant during treatment. They don't want estrogen cancers to grow. And the only other product, which is a copper IUD, has side effects that are oftentimes far too challenging for these patients in a vulnerable state. Phexy is the obvious choice. So we have been seeing being asked to continuously go and Provide products to hospitals to do all kinds of grand rounds conversations to continue to elevate and escalate the conversation. So, I would say that it is growing. We have not had a way to actually segment that specific population. However, when we're talking to doctors. They are part of bigger practices. And so we are always making sure that our sales organizations, some of whom are cancer survivors themselves, by the way, are making a deliberate effort to go to those hospitals and talk to those clinics and those centers. And we think that's been boosting our business. The first question, I don't know if our chief commercial officer or Jay Files might want to address it. Jay Files, do you?
spk09: Yeah, no, we do. Okay, perfect. Go ahead, Katherine.
spk06: Well, I think one thing that we could mention, and I think this could actually help, is in spite of whether some of these small private payers are moving this way, we are being, again, proactive in doing something that helps women. So we have a cash card program that we're going to be rolling out in the next few weeks.
spk04: So even if payers aren't moving to increased access immediately, we're going to do what we can. Ron, does that address your question?
spk08: Yeah, that was very helpful, but I think just to clarify, you know, I was also asking about, you know, those folks who are prepared to pay out of pocket. If you're seeing sort of an increased level of interest in doing that since the Supreme Court ruling or not.
spk09: Yeah, I think to expand on that, you know, we are always, you know, about two weeks behind on script data. And to get it to that level, obviously, it's just starting to come in. I will say that traditionally, the self-pay category, as we trended, is not a very significant number of our sales. It is there, which is why we also did implement that cash card program that Catherine is referring to. And that is just being recently rolled out. Actually, it was kind of Great timing on our part, because we rolled that out in advance of. RV RV wave decision coming out, but I think we'll get better clarity to see if that is truly an issue to that degree. But I think ultimately speaking anecdotally, I think the majority of the sexy prescriptions that are coming through, you're still going to see them either 1 come through some sort of payer assistance program, right? They've got their own insurance and or. a governmental support program that they'll have coverage through state or federal means. So a true uptake on someone who doesn't have either and is paying straight out of pocket, they'll definitely be there. We put in steps ahead of time to potentially assist them. But I think we'll truly see, we'll follow up on that in Q3. I think we'll have much better visibility on that. to see if it truly is something that is trending up and something that we've timed right with our cash rebate card.
spk04: Thank you very much. Thanks very much, Ron.
spk03: All right, that's all the time that we have for today. I'll turn the call back over to Sandra Pelletier for closing remarks.
spk01: Thank you. We continue to grow SexyNet product sales quarter over quarter in the multi-billion dollar U.S. contraceptive market. We are on track to meet our guidance for 2022. With the Supreme Court ruling on Roe versus Wade in June, women are increasingly motivated to protect themselves from unintended pregnancies. The recent guidelines from the U.S. government on contraceptive access should catalyze access to FEXI at zero cost to women with no barriers to access. Additionally, there is significant upside potential from our late-stage program developing PheXy for the prevention of chlamydia and gonorrhea in women. In closing, I want to reiterate that we remain focused on execution of our business strategies to deliver long-term shareholder value. The time for PheXy is now. The need is greater than ever, both for hormone-free contraception and for prevention of STIs. We are excited about our future. And we are very, very happy to have you on this journey with us. As you look to organizations that are delivering innovation, but continuing to execute, when I started this call, I said, since April, we have been able to share 16 value drivers to deliver on our business and deliver shareholder return. Those were not announcements that were fluffed. There wasn't a whole lot of gray in there. These are very deliberate, intentional milestones that we continue to deliver on to prove that this product deserves to not only grow, but the attributes of this in a time that we are in today, it makes it such an obvious investment. And the value inflection that's forthcoming in October when we share our readout for our STI study is very significant. So I want to thank all of you that have been with us for a while, and I'd love to, again, welcome the people that are new, and I really want to thank you for your ongoing support. Have a great rest of your day.
Disclaimer