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spk00: Good afternoon, ladies and gentlemen. Thank you for joining us for TherapeuticsMD's first quarter 2022 financial results conference call. I will now turn the call over to Investor Relations for TherapeuticMD's Lisa Wilson. You may begin.
spk01: Thank you, Operator. Good afternoon, everyone. and thank you for joining today to discuss our first quarter financial results and business update. This afternoon, TherapeuticsMD issued a press release announcing its first quarter 2022 financial results. The press release and accompanying presentation are available on the company's website, TherapeuticsMD, in the Investors and Media section. On today's call from TherapeuticsMD are Chief Executive Officer Hugh O'Dowd, Interim Chief Financial Officer Michael Donegan, and Chief Commercial Officer Mark Glickman. I would like to remind everyone that certain statements made during this conference call may be 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 of risks, some of which are identified in our press release, and are annual, quarterly, and other reports filed with the SEC. These forward-looking statements are based upon information available to TherapeuticsMD today and the company assumes no obligation to update these 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 archived webcast, this call was held and recorded on May 16, 2022. With that, I'll turn the call over to TherapeuticMD's CEO, Hugh O'Dell.
spk03: Thank you, Lisa, and thank you, everyone, for joining our call today. Last quarter, we reviewed our 2022 priorities, including details surrounding our Antivira manufacturing supply challenges, and today, I'd like to share our progress against our goals, including key milestones, met in the first quarter of 2022. Our net product revenue for the first quarter was $19.3 million, compared to net product revenue of $18.7 million in the fourth quarter of 2021. As we discussed last quarter, our first quarter revenue performance was impacted by Antivirus manufacturing and supply challenges. As also previously communicated, We believe that our antivirus supply challenges peaked in the first quarter of 2022, and we envision incremental improvement as the year progresses. Turning to our recent $150 million VitaCare divestiture, I am quite pleased that our organization drove a rapid and successful deal conclusion just five weeks following its announcement. And finally, With regard to our pathway to achieving EBITDA break-even, we shall pause offering 2022 full-year guidance until we can provide clarity regarding our capital structure, as well as receive feedback from the FDA on our pending manufacturing supplement. And with that, I'll turn it over to our Interim Chief Financial Officer, Michael Donegan, to discuss our financial results in greater detail. Michael?
spk04: Thanks, Hugh. As previously announced in March, we agreed to sell our VitaCare prescription services business to GoodRx. In April, after the close of the first quarter, we completed the VitaCare divestiture and received a cash payment of approximately $138.5 million net of customary holdbacks. We may also receive up to an additional $7 million in earn-out consideration contingent upon VitaCare's financial performance through 2023. We used 120 million of the proceeds to pay down our outstanding loan. Now I'll address our financial results in greater detail. Slide five shows our quarterly net revenue trends. For the first quarter of 2022, our total net revenue declined 2.7% to $19.3 million as compared to 19.9 million the first quarter of 2021. Net revenue was up 600,000 or 3.5% as compared to the fourth quarter of 2021. During the quarter, sales of Anovera were $8.5 million, a decrease of 200,000 or 2.7% compared to the first quarter of 2021. The decrease was primarily due to a decline in sales volume and average sales price, which is attributable to the Anovera manufacturing challenges we experienced. However, compared to the fourth quarter of 2021, Anovera sales rose $700,000 for an 8.7% increase attributable to the higher sales volumes, partially offset by a decrease in average sale price. In VexiNet revenue for the first quarter of 2022 was $7 million, remaining flat when compared to the first quarter of 2021. Although we saw an increase in sales volume year over year, this was offset by a decrease in average sale price. Sequentially, Invexi revenues were up $300,000, or 4.5%, compared to the fourth quarter of 2021, as a result of an increase in sales volume and average sale price. Sales of Byjuva were $2.6 million for the first quarter of 2022, an increase of $100,000, or 4.7%, compared to the first quarter of 2021. The increase was primarily due to revenues associated with the Fairmex License Agreement, partially offset by a decrease in sales volume and average sale price. Byjuva sales were down $100,000 or 4.5% quarter over quarter compared to the fourth quarter of 2021, attributable to a decrease in sales volume, partially offset by an increase in average sale price. Total license and service revenue in the first quarter of 2022, which includes revenues received from VitaCare Prescription Services prior to its divestiture in April, was $400,000 compared to $200,000 in the first quarter of 2021. The entire $400,000 recognized in the current quarter represents VitaCare service revenue, whereas the total $200,000 in the prior year period represents revenue associated with milestone payments for product approvals with our out-of-US partners. On a quarter-over-quarter basis, total license and service revenue in the first quarter of 2022 increased $300,000 compared to fourth quarter 2021 due to an increase in VitaCare service unit volumes associated with an increase in new customer agreements. Our full financial results are on slide six. Gross profit for the first quarter of 2022 was $14.5 million, a decrease of $.7 million or 4.7% compared to the first quarter of 2021 as a result of the aforementioned decrease in product revenue combined with a decrease in overall product gross margin. Compared to the fourth quarter of 2021, our gross profit rose $500,000, or 3.8%, driven by an increase in net product sales, partially offset by a slight decline in product gross margin. Selling and marketing costs were $18.9 million for the first quarter of 2022, a decrease of $5.1 million, or 21.3%, compared to the first quarter of 2021. The decrease was a result of lower overall advertising and marketing spend and lower product sample costs, partially offset by other sales and marketing investment. Quarter over quarter, selling and marketing decreased $3.1 million, or 14.1% compared to the fourth quarter of 2021 due to a decrease in brand spending for both Anovera and Invexi products. General and administrative costs were $20.4 million in the quarter, an increase of 2 million or 11% compared to the first quarter of 2021. In general, we saw temporarily reduced G&A expenditures during 2021 due to our COVID-related cost saving measures but expect to maintain higher levels going forward to support our commercialization efforts. Quarter over quarter, our general and administrative costs declined 5.5 million, or 21.2%, due to certain severance-related expenses incurred during the fourth quarter of 2021. R&D expense was 1.4 million during the first quarter, a decrease of $700,000, or 31.7%, compared to the first quarter of 2021. a result of lower compensation and employee benefit expense and lower lab research costs. Over the past few years, our R&D expenses gradually declined as we refocused our efforts on the commercialization of our products. On a sequential basis, our R&D expense remains unchanged compared to the quarter ended, December 31, 2021. For the first quarter, our non-operating expenses were $22.8 million, an increase of $12.7 million compared to the first quarter of 2021. This change is due to the March 2022 amendment to our financing agreement, which caused us to incur higher amortization of deferred financing costs and a loss on the extinguishment of debt. This increase was partially offset by lower interest expense associated with a lower average debt balance during the quarter and lower interest prepayment fees due to elimination of prepayment fees with the March 2022 amendment to the financing agreement. When compared to Q4 2021, this increase was $15.2 million, mainly due to higher amortization of deferred financing costs and a loss on the extinguishment of debt as interest expense remained constant for both quarters. More details regarding the amendment and our debt and financing arrangements can be found in our 10-Q. Net cash used in operating activities was $29.5 million for the first quarter, and as of March 31, 2022, we had $30.4 million in cash. I'll now turn the call over to our Chief Commercial Officer, Mark Glickman, to provide more detail around our commercial progress. Mark?
spk02: Thanks, Mike. For the past few months, we've worked diligently on optimizing our sales targeting and maintaining discipline in our approach so we can effectively leverage all three of our assets instead of one product at a time. Key to this has been retargeting potential customers to address the top prescription riders for each product, ensuring our representatives are focusing on the right areas. Already, we are starting to see results. Slide 8 shows our call activities. which is the best we've recorded in terms of calls per day and targets reached. These efforts are reflected in product demand. Slide 9 demonstrates how we're meeting the demand for Anavera despite inventory challenges. We're selling as many rings as we can manufacture, and upon receiving a shipment, the rings are immediately sold. The team is doing a phenomenal job in managing demand and getting the product into the hand of customers despite inventory shortages. We believe we will see improvement in the manufacturing situation throughout the second quarter. Building inventory is important because demand for Anavera has been brisk and growing. As shown on slide 10, total quarterly prescriptions were up 27% over the first quarter of 2021, with both new and existing prescribers continuing to write. Though the aforementioned manufacturing and supply challenges hampered our ability to meet demand in the first quarter, and grow total prescriptions in the first quarter, we believe our efforts to combat the supply challenges will improve throughout the second quarter. Slide 11 shows the momentum in Anavera prescribers, and we expect the base to continue to expand. As the only long-lasting, procedure-free, patient-controlled option for women, Anavera is positioned to play a significant role in the contraceptive market. We are also observing early improvement in demand for Invexi following our strategic realignment in February. With our failed force now calling on the right physicians, prescriptions improved in March, as you can see on slide 12. Invexi is the only ultra-low-dose vaginal insert that works as early as two weeks for the treatment of VVA dyspareunia, and we expect continued growth in this area. As with Invexi, Bijuva experienced a similar uptick in March, as demonstrated on slide 13. Bijuva is the only one-dose FDA-approved bioidentical therapy to treat vasomotor symptoms, and we found this product to be very commercially responsive to field force efforts. It's also sticky. The women who take Bijuva tend to stay on it long-term. As you've seen today, Thank you. Thank you.
spk00: Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.
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