TherapeuticsMD, Inc.

Good morning, ladies and gentlemen. Thank you for joining us for a TherapeuticsMD fourth quarter 2020 financial results conference call. Following prepared remarks from the company, we will open the call for questions. I would now like to turn the call over to TherapeuticsMD's Vice President of Investor Relations, Nicole Oshner. Nicole?

Thank you. Good morning, everyone. Thank you for joining today to discuss our fourth quarter financial results and business update. This morning, TherapeuticsMD issued a press release announcing our fourth quarter financial results. The press release is available on the company's website, therapeuticsmd.com, in the Investors and Media section. On today's call from TherapeuticsMD are Chief Executive Officer Robert Fenizio, Chief Financial Officer James Durecka, Chief Commercial Officer Don Halkoff, and Chief Strategy and Performance Officer Mitchell Crafton. I would like to remind everyone that certain statements made during this conference call may contain 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 some of which are identified in our press release and our annual, quarterly, and other reports filed with the SEC. These forward-looking statements are based on information available to TherapeuticsMD today, and the company assumes no obligation to update 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 may be listening to the replay or archive webcast, this call was held and recorded March 2nd, 2021. With that, I'll turn the call over to Therapeutics MD CEO, Robert Fenizio.

Good morning. On today's call, we will review our fourth quarter and full year performance. Progress made on strengthening our capital structure and our commercial plans. We delivered a strong year. and a strong quarter with record total net product revenue for our company. We successfully executed our multiple priorities demonstrating operational agility while maintaining a strict focus on commercial execution and financial discipline. We've lowered our operating expenses, updated our net revenue covenants for the remainder of the term of our loan, and strengthened our balance sheet through equity capital raises as we reduce our debt. Before I turn the call over to James to give you the detail on the transformative progress we've recently achieved, I'd also like to mention that the VitaCare divestment process is still moving forward and has multiple interested parties. I will now turn the call over to James.

Thanks, Rob. Before reviewing our fourth quarter financial results, I would like to discuss our balance sheet and elaborate on updates with our lender. Turn to slide five. We have strengthened the balance sheet by raising over $180 million in net proceeds since last November, which, after the recently completed offering earlier this month, brought our cash balance to over $200 million. Our strong cash position has enabled us to work with our lender to reduce our future covenants for the remaining life of the loan, gain their consent on the terms on which we can divest of VitaCare prescription services, and pay down $50 million of debt. by the end of March. Paying down debt allows us to reduce interest expense as we move forward, and we believe it will also facilitate the refinancing of our remaining debt at more favorable terms in the future that will reflect the advancing stage of commercialization of our key products. As Rob mentioned, we have agreed with our lender to update our aggregate revenue covenants for Anavera, Invexi, and Byjuva. Our first quarter revenue covenant is now $17 million. Second quarter is now $20 million. Third quarter is $23 million. Fourth quarter is $26.5 million. And first quarter 2022 is $30 million. After that time, it increases $5 million per quarter. While not formal guidance, we believe these revenue covenants have been set at minimum levels that are sufficiently below our revenue expectations given the current state of the COVID-19 pandemic and provide sufficient headroom to avoid further adjustment. We believe our deleveraging, along with our updated net revenue covenants, is transformational, and we are now poised to focus solely on executing our commercialization efforts. Let's move on to a review of our financial results and key metrics from the fourth quarter. Turning to slide seven, our overall net revenue for the fourth quarter increased to $22.6 million. which satisfied our fourth quarter revenue covenant. This was a 30 percent increase in product net revenue from the third quarter. This increase was driven most significantly by the 42 percent increase in net revenue from Anavera, with the average net revenue per unit remaining in line with prior quarters at $1,336 per unit. Additionally, as you can see on the chart, Invexi and Byjuva also increased by 29 percent and 36 percent, respectively. compared to the previous quarter on a net revenue basis. The average net revenue per unit increased to $54 for Invexi and $52 for Byjuva. As of your end, wholesaler inventory levels for our products were within normal levels of three to five weeks. Moving on to slide eight, let's review some key financial statement items. Our product gross margin of 75 percent in the fourth quarter decreased six percentage points over the third quarter. Our fourth quarter gross margin was adversely affected by write-offs of finished goods inventory for Anavera of 800,000 and 500,000 each for Invexi and Bijupa, which were attributable to the pandemic. The results of our previously announced cost savings initiatives and our focus on strict cost discipline allowed us to reduce operating expenses and to achieve our goal of $80 million $80 billion in OPEX for the second half of 2020, excluding non-cash items and a performance incentive of $6 million to enhance employee retention across the organization. Net cash used in operating activities decreased by $3.7 million, from $34 million for the third quarter to $30.3 million for the fourth quarter. While we plan to maintain an efficient cost base that can be leveraged as revenue grows, We expect to make investments this year to improve our supply chain, enhance marketing, and strengthen digital capabilities related to commercial initiatives. With these investments, we expect our cash OPEX per quarter to average 45 to 48 million in 2021. Turn to slide nine. In conclusion, I have been pleased with our financial and operational accomplishments over the previous two quarters since I joined TXMD. Over this short time, We have reduced operating expenses and cash burn by successfully meeting our goal of $80 million in cash outbacks for the second half of 2020, strengthened our balance sheet by raising $180 million in cash and committing to pay down $50 million in debt, revised our revenue covenants to what we believe are minimum levels given the current state of the COVID-19 pandemic. We believe we are well positioned to execute on our commercial plans and poised for continued growth in 2021. I'd now like to turn the call over to Dawn to discuss our payer progress and commercial plans.

Thanks, Shane. I will start with a quick overview of payer status and then review the performance seen across our product portfolio in this quarter. Let's start with payer access and updates on slide 11. We have maintained all major payers across the product portfolio. Improvement in commercial unrestricted coverage moved Anavera to 70%, Invexi to 76%, and Bijuva to 75%. Let's move to Anavera performance on slide 13. Quarterly total prescriptions filled by patients is on the left-hand side. As you can see, Anavera continued to grow with total prescriptions increasing 15% over the third quarter, coming in at approximately 6,000 total prescriptions for the fourth quarter. Net revenue per unit remained strong at 1336 and net revenue grew 42% quarter over quarter. Turning to slide 14. To provide a bit more understanding of our progress, let's look at leading indicators across prescriber and consumer metrics. I'll start with prescribers. Growth in the prescriber base for Anavera is a key level for launch trajectory. As we have mentioned, prescriber access has been limited during COVID. But we are navigating this and continue to see growth in the total number of prescribers writing as indicated by the green bars and growth in depth of prescribing as seen by the total prescription shown on the blue line growing faster than the total number of writers. Turning to slide 15. We have leaned into consumer activities given that 60% of birth control decisions are made by the consumer. In December, we launched our celebrity spokesperson portion of the consumer campaign with Whitney Cummings. The program is called Just Say Vagina. The interest has been significant. The 2.7 billion impressions generated and placement in multiple significant media outlets, as shown in the column on the left. In addition, the early impact results are encouraging. Click-through rates from our advertising to the website are above industry norms, Traffic to the website is growing with over 10,000 visits to the website a day, and in live tests on multiple platforms after seeing our advertising, intent to request Anavera rises significantly to 60%. In other words, all leading indicators show the consumer strategy is working, and we believe it will increase the trajectory of Anavera prescriptions in 2021. Turning to slide 17. As you can see, we have figured out how to affordably attract consumer interest in Anavera. Where we need to improve and create the next step is converting this consumer interest to fill prescriptions. This progression from interest to conversion is a typical learning process during launch, and we believe we are on the right track to improve the conversion over the next months and quarters. Turning to slide 17. Now I would like to talk about the value of each patient for Anavera. Each woman on therapy creates a significant amount of revenue value for TXMD because a full year of revenue is 13 cycles and is earned when the product is dispensed. As you can see by the slide, the cumulative value of Anavera continues to grow with almost 16,000 women on therapy. In addition, we believe our strong refill rates of approximately 50% will create a strong compounded future revenue opportunity. Now let's move to the larger future opportunity for Anavera on slide 18. Anavera fills a void in the marketplace, and we believe it can create a new segment in birth control. It is well understood that IUDs and implants are not for everyone. Close to half of women reject the offer of an IUD or implant because they do not want to undergo a procedure. In addition, almost half of OBGYNs don't conduct procedures, and therefore, are in need of a long-acting option to provide their patients. The solution to both of these issues is Anavera. Turn to slide 19. A growing trend in the marketplace is procedure-free at-home solutions. One successful example of this is Cologuard, a procedure-free at-home solution for colorectal cancer screening. It removed the barriers to entry for many people reluctant to undergo a procedure. Of the 3 million people screened with Cologuard, half of them had been previously untested. We believe Anavera can expand the long-acting segment for the birth control category in the same way, removing the barrier to entry for those that want a long-acting product but are reluctant to undergo a procedure. Turning to slide 20. Let's look at the contraceptive continuum. On the left-hand side of the chart are daily and monthly options that are procedure-free but short-acting and declining, and on the right are options that provide the benefit of long-acting but require a medical procedure and are growing. Anavera, to the left of the long-acting segment, fills the market void of a long-acting product that does not require a procedure. In filling that market void, we believe Anavera will create a new segment in birth control as Cologuard did for colorectal cancer screening. Turning to slide 21. And the evidence for Anavera to become a new segment in the marketplace is in the data. On the left-hand side of the chart are the main segments of birth control. Moving to the middle column, here you see actual patient data from VitaCare and which birth control women were on prior to switching to Anavera. Moving to the right-hand column, This is survey data on where prescribers claim they switched patients from, given the multiple benefits of Anavera. The main takeaway from both sets of data is the same. Over half of prescriptions are coming from products that are not NuvaRing, as the benefits of Anavera are more than the birth control form. Moving to slide 22. Before closing on Anavera, let's spend a few minutes grounding us in the larger financial opportunity. Birth Control is a large market with 18 million women and 28 million new prescriptions annually. To put Anavera's opportunity in perspective, traditionally leading products in this category over time have achieved 4% to 5% market share. As you can see in the middle column, Lolo Western launched in 2011 and achieved this share in approximately four years. Cologuard, which is in a different market but offers the procedure-free at-home benefits, achieved the same share of 5% of the screening market in five years. If Anavera achieved this level of success seen in the column on the right, it would mean approximately 720,000 prescriptions annually. Now let's review our menopausal products. Turning to slide 24. INVEX-E quarterly total prescriptions filled by patients is on the left-hand side. Total prescriptions decreased 5.6% to approximately 123,000, a result of NRX decline in previous quarters, which was attributable to the pandemic. In good news, new prescriptions have begun to recover and increased 2.5% for the fourth quarter over the third quarter. Net revenue per unit improved to $54, and net revenue improved 29% Q4 over Q3. Moving to slide 25. Our primary goal for Invexi in 2021 is to improve the gross to net. To support net revenue per unit growth, effective January 1st, our cash pay program and high deductible patients copay increased from $50 to $75. The expected positive impact on Invexi's gross to net is significant. The cash pay program change was expected to put pressure on volume, but that same time we rolled out the cash pay program change, we also gained preferred status for Invexi with a top PBM that covers approximately 20% of lives to counterbalance. In January, the PBM removed key branded competitors, including Premarin, which currently has 17% total prescription market share. In addition, we are continuing to focus on patient adherence through retail partnerships to drive higher refill rates across distribution channels. Turning to slide 26. Performance in January based on the combination of changes is as expected. In January, we saw a short-term impact on volume. However, early indicators for February show that volume is beginning to recover. In addition, we are seeing improvements in adjudication rate, net revenue, and net revenue per unit. To date, an approximately $17 improvement in cost per fill is being realized for those who use the co-pay program. Turning to slide 27. Finally, a driver of growth is consumer demand. During the first quarter, we launched patient testimonials to help women better understand that symptoms of menopause are common and normal. Moving into the second quarter, we plan to launch a new consumer campaign grounded in self-care that is designed to educate menopausal women on their overall vaginal health and encourage them to take charge during this new life stage with Mvexi. Moving to slide 29. I'd like to quickly touch on Byjuva. Even with our decision to de-emphasize Byjuva, and with only seven sales representatives promoting Byjuva in the field, we continue to see slight growth in TRX for the quarter at 3.3% while maintaining NREX. For the fourth quarter, net revenue per unit improved to $52, and net revenue increased 36% over the prior quarter. I would now like to turn it over to Rob for closing remarks.

Thanks, Dawn. Let's move to slide 30. We've transformed our capital structure. We've improved our balance sheet, updated our revenue covenants, and have the framework in place to accelerate both Anavera and Invexia adoption throughout 2021. Last but not least, our VitaCare divestiture is moving forward, and we believe we're very well positioned to continue our growth to anticipated EBITDA breakeven in the first half of 2022. Thank you all for joining the call today, and we'll now open up the call for questions.

Ladies and gentlemen, if you have a question or a comment at this time, please press the star, then the one key on your touch-tone telephone. If your question has been answered or you wish to move yourself from the queue, please press the pound key. Our first question comes from Louise Chatham-Scanter.

Hi. Congratulations on the quarter, and thanks for taking my questions here. So first question I had for you is on VitaCare. Any update about how you think about valuation? You had given us some thoughts before. And then the timing of the sale, could we see something this year? Is that what is anticipated? And then the second thing is, how should we think about gross margins in 2021? You gave us some good metrics for sales and op-ex. And then last thing is, how much of an impact do you anticipate COVID to have in 2021? And the reason I ask is, as we think about 2022, should we expect a step up in sales? Thank you.

Yep. Hey, Luis. It's Rob. So, as far as VitaCare goes, yeah, absolutely, I would expect something this year. Assuming it divests, which we have multiple parties interested in, and things are progressing very nicely there, I would definitely expect it this year. As far as gross margins go, we tried to put out at the JPM presentation very clear expectations around NETs for the first time, even including in backseat. So what we did with Anavera is we had 1050 to 1200. And that was based on the back half of the year, the government channels opening up and additional rebates related to government or commercial related to Anavera. And that's obviously assuming COVID lifts. I know we stayed ahead in 2020. I know we were going down to about 1,200 and we closed the year at 1,336. So again, it's that government channel starting to open up, Medicaid, DOD, and places like that. I think for Invexi, we put a clear quarterly progression out there. And then by Juva, I think we gave a little bit of color as well. As far as COVID goes, we actually put a step up in scale where the first half of the year is vaccines begin to take hold. There's certainly a headwind for our sales force in getting into new offices that we believe in the back half of the year will start to lift and be, you know, getting whatever to this new normal will be in 2022. So we expect strong revenue growth throughout this year and next year. And we think it will accelerate quarter over quarter with COVID lifting. But the other big thing, and I'll turn it over to Don, you know, this procedure-free long-acting product, as you can see, We have over 10, two quarters ago, we were just starting to learn. But now, you know, the marketing department has over 10,000 women coming to Antivirus site a day. And the ability to get, you know, a lot of volume moving at low cost with interest, that they've just knocked it out of the park. The next step is the conversion initiatives that she's working on. And that also will bring a strong revenue stream with it that we're just starting on right now. Dawn, anything to add?

Yeah, and maybe I'll just, maybe I'll just, you know, add about the COVID impact. I mean, I think what's really interesting here is that, you know, what we're seeing despite COVID is Anavera growing quarter over quarter at 15%, and, you know, net revenue increasing 42% quarter over quarter. And, you know, what's really nice about Anavera, and if we could go to slide 17, is that, you know, during this environment, what's fantastic is that The value of every script, the realized value of every script for Anavera and the aggregate amount of women on therapy creates a lot of value for us for TXMD, which is really nice in this COVID environment as we navigate it. So essentially, you know, we're an annual product living in this monthly data world. And so what that means is that every time a prescription is written for Anavera, we receive a full year of revenue versus the one month of revenue for other monthly products. Every time you see an Anavera prescription, it's actually 13. And again, that's really helpful for us during this time. And as Rob said, in terms of how are we going to accelerate growth with COVID, what's the impact? Rob already mentioned the first part. When COVID recedes, the Salesforce access will normalize, which will naturally help us accelerate. And because we've generated this significant interest in Anavera, and I'll tell you that The procedure-free long-acting message resonates. It resonates with prescribers. It resonates with consumers. Right now, we're just focused on conversion, and we can reach consumers digitally in a COVID world, and so that's going to be really helpful. But, you know, ultimately, we believe that the access restrictions will lift in the back half of the year. That will allow us to accelerate.

Thank you.

Does that answer your question?

Good.

Yes, it does. Thank you.

Thanks, Luis. Our next question comes from Annabel Sammy with FIFO.

Hi, guys. Thanks for taking my question. I had first something pretty simple, simple math here. If you just take your prescriptions and multiply it by the net price that you've laid out in your press release, we're not getting to the number. So are there any other variables that we need to be thinking about? And when we think about this, where are the variables that we should think about going forward when you talk about net price ranges for both Anavera and Bexie? And then I guess the next question is if there's any update on discussion between NASM and FDA regarding hormone therapy. We haven't talked about Bajuba much, but as COVID lifts and as things stabilize for the other franchises, Are you going to plan on reinitiating marketing there? Thanks.

On the question about the difference between gross to net and the units in the channel, our demand in the channel for the quarter was very strong. And it illustrates that Symphony does not pick up all the sales from certain channels where our patients fill their prescriptions, resulting in underreporting of units. Second, we maintain better than expected net revenue per unit for all of our products. And we accomplished this growth in shales was accomplished while maintaining typical inventory levels of approximately four weeks in the channel.

Does that answer that piece of it?

I mean, the net price that you're listing and the prescriptions that you reported, are you saying that there are other prescriptions in the channel that you're reporting revenues on or reporting revenues on, rather?

What we're saying is there's a mismatch between the numbers reported by Symphony and the units in the channel versus what our sales are.

Yeah, if you take our nets on the units, you get the revenue that's reported. The reason the nets are so high is we think Symphony is reporting low.

Okay, do you have a sense of the percent that they're reporting low?

It's hard because there's so many new channels. That's something we're really working on. It's hard to say at this point. I'd hate to guess and be wrong, but we're working on that one with them.

I mean, how do you record your revenues then if you're guessing at the underreporting in the channel?

You take your revenue. Let me turn it over to finance. Go ahead.

Yes. Hi, Annabelle. So I think what you're hitting upon is, you know, our revenues are done on a gap basis. So that's when we sell onward to wholesalers. And I think the numbers that you were looking at, you were trying to take like scripts that you see being dispensed to patients and multiplying that by the average 1336, right? Is that what you were intending on doing?

Well, I mean, that's just what you reported in the press release, so I imagine that would be the accurate number. But, I mean, we can take that offline. You know, I guess if that's the case, then how should we think about, you know, net price and applying that going forward if there's variables that are unknown, I suppose? You know, how should we think about that?

So, I mean... The thing is that there's a difference between, you know, the scripts that are dispensed and what we sell at X factory, right, from us to wholesalers. So, you know, there's always going to be ebbs and flows and wholesaler buying patterns and so forth. So they will never exactly match up, you know, one for one. You know, but just in terms of an overall framework of doing it, you know, for us, I think, you know, I think you assume that that kind of normalizes over time, and that's the way I think you'd go about doing it if you wanted to model it that way.

Okay. Well, then maybe we can just move on to the next question regarding NASM and any progress there in terms of their discussion with FDA and compounding and what you're doing with BiJuva.

Yeah. So, uh, goal is to get to even a breakeven first half of 22. We're on track for doing that. And, uh, at that point we can reevaluate by Juva. Also, you know, you're right. The COVID, uh, overcast can certainly, uh, create tailwinds or headwinds, uh, as it lifts or moves forward. And then we'll see what the FDA does with NASEM on top of that. So we got to wait and see how each card flips over. Uh, but certainly it's a, it's a great product and, uh, As you see, we only have seven people behind it, and it's moving upwards. So there's definitely a market there. It's a matter of resources for us and shareholder goals. So we'll get it going, though.

All right, great. Thank you.

Thank you.

Again, ladies and gentlemen, if you have a question or a comment at this time, please press the star, then the one key on your touchtone telephone. Our next question comes from Douglas with HC Wainwright.

Hi, good morning. Thanks for taking the questions. Just On the balance sheet, just curious, you know, if, and it sounds like it's going to be more like a when, you're able to divest the viticare business, will you plan on paying down more debt? Is that an option for you? Or, you know, what are your thoughts in terms of the use of proceeds? Thank you.

Yeah, thanks for the question. Yeah, so, you know, when I first started,

When I first started, we had expensive venture debt here whose covenant package was set long before COVID. The pay down that we just did really creates optionality to keep our current debt structure or allow us to pursue lower cost debt in the future as market conditions allow. Whether or not we do further pay downs, that's I think that's subject to a bunch of different analysis here, but we like the optionality that we have. Additionally, you know, now with that consent to sell VitaCare, which you brought up, that improves our focus and allows the VitaCare business to maximize its value in which we plan to retain an interest. So I really like the setup here that we now have, and I think we're in a much better position balance sheet-wise.

Yeah, Doug, I don't think we'll be paying down any more debt in the near future to the current expectation, to answer your question.

Okay. And then just in terms of the grossing nets, we're obviously seeing some improvements, especially on BEXI. You know, sometimes things get a little squirrely in the first quarter with just deductible resets, and you see greater utilization of plans. But I know you've made some changes. So should we see further improvements in the first quarter, or will that come perhaps later in the year? Just trying to make sure we get everything straight for our modeling standpoint. Thanks.

So I'll turn it over to Don and Mitch. But, you know, the copay card and the increase in the cash pay price was an immediate impact. The next piece that you would see unfold during the year would be the high deductible plans and things meeting their goals and more insurance coverage kicking in. So I would expect it to continue throughout the year. Okay?

Does that make sense? When looking at that, I would really look at quarter over quarter. So first quarter of 2021 versus first quarter of 2020. And from that regard, typically you see a decrease in the cost of net revenue. And we may see one this year, but we don't think the impact will be as significant given the changes we made with insurance and copay cards. So, pretty positive.

Great, thank you. Our next question comes from Dana Flanders with Guggenheim Partners.

Hi, this is Devin on for Dana Flanders. I just had two quick questions. One was just regarding the new preferred PBM position for Anavera and Invexi. Just wondering how, I guess, share gains are tracking. I know it's early in the year, but You guys had got it to about 10% to 20% share gains back in January. So just seeing if you still expect that to be a tailwind into 2021. And then I just have an additional follow-up.

Yeah, we absolutely do. I'll turn it over to Don. So far, you know, it's early to track that, but we are, as we showed in the slides, ahead of pace. So when we raised the cash pay from $50 to $75 last We expected a fall-off, as we said back at JPM, through February, and then to return in March back to growth. That fall-off kind of stopped at the end of January, and we've kind of returned to growth about two or three weeks sooner than we thought. So that is trending well. We expect that to accelerate with that contract throughout the year for sure. We feel good about that.

Yeah, hi, Devin. And the only thing to add is that, as Rob said, it's early. What we would expect to see are gains more in the second quarter and forward. But as Rob said, given that we're not seeing as much of an impact from, especially with Invexi with the copay change, we're confident that some of that is because of the preferred coverage at PBM.

Yep, all set. Okay, great. Thank you. And I just had one additional one. I know there's been, I guess, a a more recent launch of NuvaRing generic at the latter half of 2021, and I know there's also a new generic launch of Zulane. Just seeing how you guys expect that to kind of impact switches for Anovera in 2021.

Yeah, so, you know, as you can see on slide 21, that if you see, if you ask the physicians, two-thirds, of the scripts aren't coming from NuvaRing. And if you go to the patients, about 40%, 44% are coming from NuvaRing. So we're just not seeing the impact. You know, what really, what Anabara was developed to be was not NuvaRing 2.0. What the population council wanted was a long-acting product that was procedure-free, that lasts for a full year. In essence, something for women that didn't want or couldn't have IUDs or implants. A lot like Dawn mentioned, Cologuard, right? They removed the procedure aspect of colon cancer screening and it worked very, very well. Well, Anavera does the same thing for IUDs and implants. It removes the need for a procedure And we're seeing that in the data. So as much supply that comes out there as we need, I think you'll see the NuvaRing contribution or previous NuvaRing users' contribution to our overall revenue shrink, not grow. I think you'll see other sources continue to grow because what we're finding is the way we're positioning it, the way the doctors see the void in the market and the void in the market that we are currently filling And that's where all of this web interest and web traffic come from with women that we've been impressed by is truly that long-acting, procedure-free, which the POC Council developed it to be. So I don't think supply, to answer your question, of NuvaRing is going to impact Antivirus trajectory at all. There is always going to be a subset of Ring users. We have that in the long run, probably 33% to 24% of the overall, whether you're looking at their market share or our ultimate market share. So we expect these numbers of NuvaRing users to go down, not up. And we'll continue to track them.

Okay? Great. Thank you very much. You got it. Thanks for the questions.

And I'm not showing any further questions at this time. I'd like to turn the call back to Rob for any closing remarks.

Thank you, everybody, for joining the call today. I'm really excited about how we're positioned for the future with the new revenue covenants, the strength in the balance sheet, our progress in the viticare situation moving forward and progressing. So thank you all. We'll see you all next quarter, and thank you for your interest.

Well, ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day. Thank you. Thank you. Thank you.

Thank you. Thank you.

Good morning, ladies and gentlemen. Thank you for joining us for a TherapeuticsMD fourth quarter 2020 financial results conference call. Following prepared remarks from the company, we will open the call for questions. I would now like to turn the call over to TherapeuticsMD's Vice President of Investor Relations, Nicole Oshner. Nicole?

Thank you. Good morning, everyone. Thank you for joining today to discuss our fourth quarter financial results and business updates. This morning, TherapeuticsMD issued a press release announcing our fourth quarter financial results. The press release is available on the company's website, therapeuticsmd.com, in the Investors and Media section. On today's call from TherapeuticsMD are Chief Executive Officer Robert Fenizio, Chief Financial Officer James Durecka, Chief Commercial Officer, Don Howcuff, and Chief Strategy and Performance Officer, Mitchell Crafton. I would like to remind everyone that certain statements made during this conference call may contain 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 and risks, some of which are identified in our press release and our annual, quarterly, and other reports filed with the SEC. These forward-looking statements are based on information available to TherapeuticsMD today, and the company assumes no obligation to update 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 may be listening to the replay or archive webcast, this call was held and recorded March 2nd, 2021. With that, I'll turn the call over to Therapeutics MD CEO, Robert Fenicio.

Good morning. On today's call, we will review our fourth quarter and full year performance. Progress made on strengthening our capital structure and our commercial plans. We delivered a strong year and a strong quarter with record total net product revenue for our company. We successfully executed our multiple priorities demonstrating operational agility while maintaining a strict focus on commercial execution and financial discipline. We've lowered our operating expenses, updated our net revenue covenants for the remainder of the term of our loan, and strengthened our balance sheet through equity capital raises as we reduced our debt. Before I turn the call over to James to give you the detail on the transformative progress we've recently achieved, I'd also like to mention that the VitaCare divestment process is still moving forward and has multiple interested parties. I will now turn the call over to James.

Thanks, Rob. Before reviewing our fourth quarter financial results, I would like to discuss our balance sheet and elaborate on updates with our lender. Turn to slide five. We have strengthened the balance sheet by raising over $180 million in net proceeds since last November, which, after the recently completed offering earlier this month, brought our cash balance to over $200 million. Our strong cash position has enabled us to work with our lender to reduce our future covenants for the remaining life of the loan, gain their consent on the terms on which we can divest VitaCare prescription services and pay down $50 million of debt by the end of March. Paying down debt allows us to reduce interest expense as we move forward, and we believe it will also facilitate the refinancing of our remaining debt at more favorable terms in the future that will reflect the advancing stage of commercialization of our key products. As Rob mentioned, we have agreed with our lender to update our aggregate revenue covenants for Anavera, Invexi, and Byjuva. Our first quarter revenue covenant is now $17 million. Second quarter is now $20 million. Third quarter is $23 million. Fourth quarter is $26.5 million. And first quarter 2022 is $30 million. After that time, it increases $5 million per quarter. While not formal guidance, we believe these revenue covenants have been set at minimum levels. that are sufficiently below our revenue expectations given the current state of the COVID-19 pandemic and provide sufficient headroom to avoid further adjustment. We believe our deleveraging, along with our updated net revenue covenants, is transformational, and we are now poised to focus solely on executing our commercialization efforts. Let's move on to a review of our financial results and key metrics from the fourth quarter. Turning to slide seven, Our overall net revenue for the fourth quarter increased to $22.6 million, which satisfied our fourth quarter revenue covenant. This was a 30 percent increase in product net revenue from the third quarter. This increase was driven most significantly by the 42 percent increase in net revenue from Anavera, with the average net revenue per unit remaining in line with prior quarters at $1,336 per unit. Additionally, as you can see on the chart, Invexi and Byjuva also increased by 29 percent and 36 percent, respectively, compared to the previous quarter on a net revenue basis. The average net revenue per unit increased to $54 for Invexi and $52 for Byjuva. As of your end, wholesaler inventory levels for our products were within normal levels of three to five weeks. Moving on to slide eight, let's review some key financial statement items. Our product gross margin of 75% in the fourth quarter decreased six percentage points over the third quarter. Our fourth quarter gross margin was adversely affected by write-offs of finished goods inventory for Anavera of 800,000 and 500,000 each for Invexi and Bijupa, which were attributable to the pandemic. The results of our previously announced cost savings initiatives and our focus on strict cost discipline allowed us to reduce operating expenses and to achieve our goal of $80 million in OPEX for the second half of 2020, excluding non-cash items and a performance incentive of $6 million to enhance employee retention across the organization. Net cash used in operating activities decreased by $3.7 million from $34 million for the third quarter to $30.3 million for the fourth quarter. While we plan to maintain an efficient cost base that can be leveraged as revenue grows, we expect to make investments this year to improve our supply chain, enhance marketing, and strengthen digital capabilities related to commercial initiatives. With these investments, we expect our cash OPEX per quarter to average $45 to $48 million in 2021. Turn to slide nine. In conclusion, I have been pleased with our financial and operational accomplishments over the previous two quarters since I joined TXMD. Over this short time, we have reduced operating expenses and cash burn by successfully meeting our goal of $80 million in cash outbacks for the second half of 2020, strengthened our balance sheet by raising $180 million in cash and committing to pay down $50 million in debt revised our revenue covenants to what we believe are minimum levels given the current state of the COVID-19 pandemic. We believe we are well positioned to execute on our commercial plans and poised for continued growth in 2021. I'd now like to turn the call over to Dawn to discuss our payer progress and commercial plans.

Thanks, James. I will start with a quick overview of payer status and then review the performance seen across our product portfolio in this quarter. Let's start with payer access and updates on slide 11. We have maintained all major payers across the product portfolio. Improvement in commercial unrestricted coverage moved Anavera to 70%, Invexi to 76%, and Bijuva to 75%. Let's move to Anavera performance on slide 13. Quarterly total prescriptions filled by patients is on the left-hand side. As you can see, Anabara continued to grow with total prescriptions increasing 15 percent over the third quarter, coming in at approximately 6,000 total prescriptions for the fourth quarter. Net revenue per unit remained strong at 1336, and net revenue grew 42 percent quarter over quarter. Turning to slide 14. To provide a bit more understanding of our progress, let's look at leading indicators across prescriber and consumer metrics. I'll start with prescribers. Growth in the prescriber base for Anavera is a key level for launch trajectory. As we have mentioned, prescriber access has been limited during COVID, but we are navigating this and continue to see growth in the total number of prescribers writing as indicated by the green bars and growth in depth of prescribing as seen by the total prescription shown on the blue line growing faster than the total number of writers. Turning to slide 15. We have leaned into consumer activities given that 60% of birth control decisions are made by the consumer. In December, we launched our celebrity spokesperson portion of the consumer campaign with Whitney Cummings. The program is called Just Say Vagina. The interest has been significant. The 2.7 billion impressions generated and placement in multiple significant media outlets as shown in the column on the left. In addition, the early impact results are encouraging. Click-through rates from our advertising to the website are above industry norms. Traffic to the website is growing, with over 10,000 visits to the website a day. And in live tests on multiple platforms, after seeing our advertising, intent to request Anavera rises significantly to 60%. In other words, all leading indicators show the consumer strategy is working, and we believe it will increase the trajectory of Anavera prescriptions in 2021. Turning to slide 17. As you can see, we have figured out how to affordably attract consumer interest in Annavera. Where we need to improve and create the next step is converting this consumer interest to fill prescriptions. This progression from interest to conversion is a typical learning process during launch, and we believe we are on the right track to improve the conversion over the next months and quarters. Turning to slide 17. Now I would like to talk about the value of each patient for Anavera. Each woman on therapy creates a significant amount of revenue value for TXMD because a full year of revenue is 13 cycles and is earned when the product is dispensed. As you can see by the slide, the cumulative value of Anavera continues to grow with almost 16,000 women on therapy. In addition, we believe our strong refill rates of approximately 50% will create a strong compounded future revenue opportunity. Now let's move to the larger future opportunity for Anavera on slide 18. Anavera fills a void in the marketplace, and we believe it can create a new segment in birth control. It is well understood that IUDs and implants are not for everyone. Close to half of women reject the offer of an IUD or implant because they do not want to undergo a procedure. In addition, almost half of OBGYNs don't conduct procedures and therefore are in need of a long-acting option to provide their patients. The solution to both of these issues is Anavera. Turn to slide 19. A growing trend in the marketplace is procedure-free at-home solutions. One successful example of this is Cologuard, a procedure-free at-home solution for colorectal cancer screening. It removed the barriers to entry for many people reluctant to undergo a procedure. In fact, of the 3 million people screened with Cologuard, half of them had been previously untested. We believe Anavera can expand the long-acting segment for the birth control category in the same way, removing the barrier to entry for those that want a long-acting product but are reluctant to undergo a procedure. Turning to slide 20. Let's look at the contraceptive continuum. On the left-hand side of the chart are daily and monthly options that are procedure-free but short-acting and declining, and on the right are options that provide the benefit of long-acting but require a medical procedure and are growing. Anavera, to the left of the long-acting segment, fills the market void of a long-acting product that does not require a procedure. In filling that market void, we believe Anavera will create a new segment in birth control as Cologuard did for colorectal cancer screening. Turning to slide 21. And the evidence for Anavera to become a new segment in the marketplace is in the data. On the left-hand side of the chart are the main segments of birth control. Moving to the middle column, here you see actual patient data from VitaCare and which birth control women were on prior to switching to Anavera. Moving to the right-hand column, This is survey data on where prescribers claim they switched patients from, given the multiple benefits of Anavera. The main takeaway from both sets of data is the same. Over half of prescriptions are coming from products that are not NuvaRing, as the benefits of Anavera are more than the birth control form. Moving to slide 22. Before closing on Anavera, let's spend a few minutes grounding us in the larger financial opportunity. Birth Control is a large market with 18 million women and 28 million new prescriptions annually. To put Anavera's opportunity in perspective, traditionally leading products in this category over time have achieved 4% to 5% market share. As you can see in the middle column, Lolo Estrin launched in 2011 and achieved this share in approximately four years. Cologuard, which is in a different market but offers the procedure-free at-home benefit, achieved the same share of 5% of the screening market in five years. If Anavera achieved this level of success seen in the column on the right, it would mean approximately 720,000 prescriptions annually. Now let's review our menopausal products. Turning to slide 24. In VEXI, quarterly total prescriptions filled by patients is on the left-hand side. Total prescriptions decreased 5.6% to approximately 123,000, a result of NRX decline in previous quarters, which was attributable to the pandemic. In good news, new prescriptions have begun to recover and increased 2.5% for the fourth quarter over the third quarter. Net revenue per unit improved to $54, and net revenue improved 29% Q4 over Q3. Moving to slide 25. Our primary goal for Invexi in 2021 is to improve the gross to net. To support net revenue per unit growth, effective January 1st, our cash pay program and high deductible patients copay increased from $50 to $75. The expected positive impact on Invexi's gross to net is significant. The cash pay program change was expected to put pressure on volume, but that same time we rolled out the cash pay program change, we also gained preferred status for Invexi with a top PBM that covers approximately 20% of lives to counterbalance. In January, the PBM removed key branded competitors, including Premarin, which currently has 17% total prescription market share. In addition, we are continuing to focus on patient adherence through retail partnerships to drive higher refill rates across distribution channels. Turning to slide 26. Performance in January, based on the combination of changes, is as expected. In January, we saw a short-term impact on volume. However, early indicators for February show that volume is beginning to recover. In addition, we are seeing improvements in adjudication rate, net revenue, and net revenue per unit. To date, an approximately $17 improvement in cost per fill is being realized for those who use the copay program. Turning to slide 27. Finally, a driver of growth is consumer demand. During the first quarter, we launched patient testimonials to help women better understand that symptoms of menopause are common and normal. Moving into the second quarter, we plan to launch a new consumer campaign, grounded in self-care, that is designed to educate menopausal women on their overall vaginal health and encourage them to take charge during this new life stage with Invexi. Moving to slide 29. I'd like to quickly touch on Byjuva. Even with our decision to de-emphasize Byjuva, and with only seven sales representatives promoting Byjuva in the field, we continue to see slight growth in TRX for the quarter at 3.3% while maintaining NREX. For the fourth quarter, net revenue per unit improved to $52, and net revenue increased 36% over the prior quarter. I would now like to turn it over to Rob for closing remarks.

Thanks, Dawn. Let's move to slide 30. We've transformed our capital structure. We've improved our balance sheet, updated our revenue covenants, and have the framework in place to accelerate both Anavera and Invexia adoption throughout 2021. Last but not least, our VitaCare divestiture is moving forward, and we believe we're very well positioned to continue our growth to anticipated EBITDA breakeven in the first half of 2022. Thank you all for joining the call today, and we'll now open up the call for questions.

Ladies and gentlemen, if you have a question or a comment at this time, please press the star, then the one key on your touch-tone telephone. If your question has been answered or you wish to move yourself from the queue, please press the pound key. Our first question comes from Louise Chatham-Scanter.

Hi. Congratulations on the quarter, and thanks for taking my questions here. So first question I had for you is on VitaCare. Any update about how you think about valuation? You had given us some thoughts before. And then the timing of the sale, could we see something this year? Is that what is anticipated? And then the second thing is, how should we think about gross margins in 2021? You gave us some good metrics for sales and op-ex. And then last thing is, how much of an impact do you anticipate COVID to have in 2021? And the reason I ask is, as we think about 2022, should we expect a step up in sales? Thank you.

Yep. Hey, Luis. It's Rob. So, as far as VitaCare goes, yeah, absolutely, I would expect something this year. Assuming it divests, which we have multiple parties interested in, and things are progressing very nicely there, I would definitely expect it this year. As far as gross margins go, we tried to put out at the JPM presentation very clear expectations around next for the first time, even including in backseat. So what we did with Anavera is we had 1050 to 1200, and that was based on the back half of the year, the government channels opening up and additional rebates related to government or commercial related to Anavera. And that's obviously assuming COVID lifts. I know we stayed ahead in 2020, I know we were going down to about 1,200. We closed the year at 1,336. So, again, it's that government channel starting to open up, Medicaid, DOD, and places like that. I think for Invexi, we put a clear quarterly progression out there. And then by Juva, I think we gave a little bit of color as well. As far as COVID goes, we actually put a step up in scale where the first half of the year is vaccines begin to take hold. There's certainly a headwind for our sales force in getting into new offices that we believe in the back half of the year will start to lift and be, you know, getting whatever to this new normal will be in 2022. So we expect strong revenue growth throughout this year and next year. And we think it will accelerate quarter over quarter with COVID lifting. But the other big thing, and I'll turn it on, you know, this procedure-free long-acting product, as you can see, We have over 10, two quarters ago, we were just starting to learn. But now, you know, the marketing department has over 10,000 women coming to Antivirus site a day. And the ability to get, you know, a lot of volume moving at low cost with interest, that they've just knocked it out of the park. The next step is the conversion initiatives that she's working on. And that also will bring a strong revenue stream with it that we're just starting on right now. Dawn, anything to add?

Yeah, and maybe I'll just, maybe I'll just, you know, add about the COVID impact. I mean, I think what's really interesting here is that, you know, what we're seeing despite COVID is Anavera growing quarter over quarter at 15%, and, you know, net revenue increasing 42% quarter over quarter. And, you know, what's really nice about Anavera, and if we could go to slide 17, is that, you know, during this environment, what's fantastic is that The value of every script, the realized value of every script for Anavera and the aggregate amount of women on therapy creates a lot of value for us for TXMD, which is really nice in this COVID environment as we navigate it. So essentially, we're an annual product living in this monthly data world. And so what that means is that every time a prescription is written for Anavera, we receive a full year of revenue versus the one month of revenue for other monthly products. Every time you see an Anavera prescription, it's actually 13. And again, that's really helpful for us during this time. And as Rob said, in terms of how are we going to accelerate growth with COVID, what's the impact? Rob already mentioned the first part. When COVID recedes, the Salesforce access will normalize, which will naturally help us accelerate. And because we've generated this significant interest in Anavera, and I'll tell you that The procedure-free long-acting message resonates. It resonates with prescribers. It resonates with consumers. Right now, we're just focused on conversion, and we can reach consumers digitally in a COVID world, and so that's going to be really helpful. But, you know, ultimately, we believe that the access restrictions will lift in the back half of the year. That will allow us to accelerate.

Thank you.

Does that answer your question?

Good.

Yes, it does. Thank you.

Thanks, Luis. Our next question comes from Annabel Sammy with FIFO.

Hi, guys. Thanks for taking my question. I had first something pretty simple, simple math here. If you just take your prescriptions and multiply it by the net price that you've laid out in your press release, we're not getting to the number. So are there any other variables that we need to be thinking about? And when we think about this, where are the variables that we should think about going forward when you talk about net price ranges for both Anavera and Bexie? And then I guess the next question is if there's any update on discussion between NASM and FDA regarding hormone therapy. We haven't talked about Bajuba much, but as COVID lifts and as things stabilize for the other franchises, Are you going to plan on reinitiating marketing there? Thanks.

On the question about the difference between gross to net and the units in the channel, our demand in the channel for the quarter was very strong. And it illustrates that Symphony does not pick up all the sales from certain channels where our patients fill their prescriptions, resulting in underreporting of units. Second, we maintain better than expected net revenue per unit for all of our products. And we accomplished this growth in sales, was accomplished while maintaining typical inventory levels of approximately four weeks in the channel.

Does that answer that piece of it?

I mean, the net price that you're listing and the prescriptions that you reported, are you saying that there are other prescriptions in the channel that you're reporting revenues on or reporting revenues on, rather?

What we're saying is there's a mismatch between the numbers reported by Symphony and the units in the channel versus what our sales are.

Yeah, if you take our nets on the units, you get the revenue that's reported. The reason the nets are so high is we think Symphony is reporting low.

Okay, do you have a sense of the percent that they're reporting low?

It's hard because there's so many new channels. That's something we're really working on. It's hard to say at this point. I'd hate to guess and be wrong, but we're working on that one with them.

I mean, how do you record your revenues then if you're guessing at the underreporting in the channel?

You take your revenue. Let me turn it over to finance. Go ahead.

Yes. Hi, Annabelle. So I think what you're hitting upon is, you know, our revenues are done on a gap basis. So that's when we sell onward to wholesalers. And I think the numbers that you were looking at, you were trying to take like scripts that you see being dispensed to patients and multiplying that by the average 1336, right? Is that what you were intending on doing?

Well, I mean, that's just what you reported in the press release, so I imagine that would be the accurate number. But, I mean, we can take that offline. You know, I guess if that's the case, then how should we think about, you know, net price and applying that going forward if there's variables that are unknown, I suppose? You know, how should we think about that?

So, I mean, that – The thing is that there's a difference between, you know, the scripts that are dispensed and what we sell at X factory, right, from us to wholesalers. So, you know, there's always going to be ebbs and flows and wholesaler buying patterns and so forth. So they will never exactly match up, you know, one for one. You know, but just in terms of an overall framework of doing it, you know, for us, I think, you know, I think you assume that that kind of normalizes over time, and that's the way I think you'd go about doing it if you wanted to model it that way.

Okay. Well, then maybe we can just move on to the next question regarding NASM and any progress there in terms of their discussion with FDA and compounding and what you're doing by Judah.

Yeah. So, uh, goal is to get to even a breakeven first half of 22. We're on track for doing that. And, uh, at that point we can reevaluate by Juva. Also, you know, you're right. The COVID, uh, overcast can certainly, uh, create tailwinds or headwinds, uh, as it lifts or moves forward. And then we'll see what the FDA does with nasum on top of that. So we got to wait and see how each card flips over. Uh, but certainly it's a, it's a great product and, uh, As you see, we only have seven people behind it, and it's moving upwards. So there's definitely a market there. It's a matter of resources for us and shareholder goals. So we'll get it going, though.

All right, great. Thank you.

Thank you.

Again, ladies and gentlemen, if you have a question or a comment at this time, please press the star, then the one key on your touchtone telephone. Our next question comes from Douglas with HC Wainwright.

Hi, good morning. Thanks for taking the questions. Just On the balance sheet, just curious, you know, if, and it sounds like it's going to be more like a when, you're able to divest the viticare business, will you plan on paying down more debt? Is that an option for you? Or, you know, what are your thoughts in terms of the use of proceeds? Thank you.

Yeah, thanks for the question. Yeah, so, you know, when I first started,

When I first started, we had expensive venture debt here whose covenant package was set long before COVID. The pay down that we just did really creates optionality to keep our current debt structure or allow us to pursue lower cost debt in the future as market conditions allow. Whether or not we do further pay downs, that's I think that's subject to a bunch of different analysis here, but we like the optionality that we have. Additionally, you know, now with that consent to sell VitaCare, which you brought up, that improves our focus and allows the VitaCare business to maximize its value in which we plan to retain an interest. So I really like the setup here that we now have, and I think we're in a much better position balance sheet-wise.

Yeah, Doug, I don't think we'll be paying down any more debt in the near future to the current expectation, to answer your question.

Okay. And then just in terms of the grossing nets, we're obviously seeing some improvements, especially on BEXI. You know, sometimes things get a little squirrely in the first quarter with just deductible resets, and you see greater utilization of plans. But I know you made some changes. So should we see – further improvements in the first quarter, or will that come perhaps later in the year? Just trying to make sure we get everything straight for our modeling standpoint. Thanks.

So I'll turn it over to Don and Mitch. But, you know, the copay card and the increase in the cash pay price was an immediate impact. The next piece that you would see unfold during the year would be the high deductible plans and things meeting their goals and more insurance coverage kicking in. So I would expect it to continue throughout the year. Okay?

Does that make sense? When looking at that, I would really look at quarter over quarter. So first quarter of 2021 versus first quarter of 2020. And from that regard, typically you see a decrease in the cost of net revenue. And we may see one this year, but we don't think the impact will be as significant given the changes we made with insurance and copay cards. So, pretty positive.

Great, thank you. Our next question comes from Dana Flanders with Guggenheim Partners.

Hi, this is Devin on for Dana Flanders. I just had two quick questions. One was just regarding the new preferred PBM position for Anavera and Invexi. Just wondering how, I guess, share gains are tracking. I know it's early in the year, but You guys had got it to about 10% to 20% share gains back in January. So just seeing if you would still expect that to be a tailwind into 2021. And then I just have an additional follow-up.

Yeah, we absolutely do. I'll turn it over to Don. So far, you know, it's early to track that, but we are, as we showed in the slides, ahead of pace. So when we wrote, when we raised the cash pay from $50 to $75 last We expected a fall-off, as we said back at JPM, through February, and then to return in March back to growth. That fall-off kind of stopped at the end of January, and we've kind of returned to growth about two or three weeks sooner than we thought. So that is trending well. We expect that to accelerate with that contract throughout the year for sure. We feel good about that.

Yeah, hi, Devin. And the only thing to add is that, as Rob said, it's early. What we would expect to see are gains more in the second quarter and forward. But as Rob said, given that we're not seeing as much of an impact from, especially with Invexi with the copay change, we're confident that some of that is because of the preferred coverage at PBM.

Yep, all set.

Okay, great. Thank you. And I just had one additional one. I know there's been, I guess, a a more recent launch of a NuvaRing generic at the latter half of 2021, and I know there's also a new generic launch of Zulane. Just seeing how you guys expect that to kind of impact switches for Anovera in 2021.

Yeah, so, you know, as you can see on slide 21, that if you see the asset positions, two-thirds, of the scripts aren't coming from NuvaRain. And if you go to the patients, about 40%, 44% are coming from NuvaRain. So we're just not seeing the impact. You know, what really, what Anabara was developed to be was not NuvaRain 2.0. What the population council wanted was a long-acting product that was procedure-free. that lasts for a full year. In essence, something for women that didn't want or couldn't have IUDs or implants. A lot like Dawn mentioned, Cologuard, right? They removed the procedure aspect of colon cancer screening and it worked very, very well. Well, Anavera does the same thing for IUDs and implants. It removes the need for a procedure And we're seeing that in the data. So as much supply that comes out there as we need, I think you'll see the NuvaRing contribution or previous NuvaRing users' contribution to our overall revenue shrink, not grow. I think you'll see other sources continue to grow because what we're finding is the way we're positioning it, the way the doctors see the void in the market and the void in the market that we are currently filling And that's where all of this web interest and web traffic come from with women that we've been impressed by is truly that long-acting, procedure-free, which the POC Council developed it to be. So I don't think supply, to answer your question, of NuvaRing is going to impact Antivirus trajectory at all. There is always going to be a subset of Ring users. We have that in the long run, probably 33% to 24% of the overall, whether you're looking at their market share or our ultimate market share. So we expect these numbers of NuvaRing users to go down, not up. And we'll continue to track them.

Okay? Great. Thank you very much. You got it. Thanks for the questions.

And I'm not showing any further questions at this time. I'd like to turn the call back to Rob for any closing remarks.

Thank you, everybody, for joining the call today. I'm really excited about how we're positioned for the future with the new revenue covenants, the strength in the balance sheet. our progress in the body care situation moving forward and progressing. So thank you all. We'll see you all next quarter, and thank you for your interest.

Well, ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.