Evofem Biosciences, Inc.

reflected within restricted cash on our balance sheet due to specific use requirements in that agreement. We closed the year with $48.9 billion in unrestricted cash and cash equivalents and $22.2 million in restricted cash related to adjuvant. Now, to remind everyone, our revenue recognition is based on unit shipments from our warehouse to distributors. In Q3, those shipments were the initial stocking orders for the FEXI launch. Q4 shipments were lower, with reorders coming mainly toward the end of the quarter to replenish inventory that was depleted by increasing shipments from the distributors to retail pharmacies during the quarter. As expected, unit shipments in Q1 2021 are on track to exceed total unit shipments last year. We believe this reflects increased market demand even before the GetFexy DTC campaign launched. and gives us confidence that gross revenues are moving firmly in the right direction for the current quarter. Also, I want to point out that we closed 2020 with approximately six months of inventory on hand, and we have ample manufacturing capacity to meet anticipated demand for the foreseeable future, including the expected impact of the GetFexy campaign. With that, I'll turn it back to Sandra.

Thanks, Jay. There are moments in time when categories change, when the culture, and the climate of a given standard changes forever because it is no longer suitable. The time for women to have to take a hormone every single day when they don't have sex every day is, quite frankly, over. More importantly, the solution puts control in the hands of women. Men have had the option to have sex on demand safely for years, but women have not had that same freedom or access to an FDA-approved on-demand method with no hormones. That's what makes this time right for sexy. There are 21 million women in the U.S. that are at risk for pregnancy who are not using hormonal birth control. They have demonstrated through their actions that they are not going to take hormones. Some women are using non-prescription contraception, such as barrier methods, withdrawal, or periodic abstinence. Others are using no contraception at all, despite the fact that they have an 85% relative risk of getting pregnant within one year if they continue to have unprotected sex. We believe that a very conservative acquisition percentage of these 21 million women makes this potentially a billion-dollar opportunity. And in addition to these 21 million women, there's another 19 million currently using a prescription contraceptive, some of whom, particularly pill users, may already be considering moving to a hormone-free, on-demand method. Factoring conservative levels of uptake from this segment as well, we believe that Sexy's peak revenue potential could be as high as $1.4 billion to $2.3 billion. And again, this is based on only single-digit acquisition percentages of women in each of these groups. Sexy sales from wholesalers to pharmacies have established a very strong growth trend since launch. On average, we've seen greater than 20% unit growth in the last three months. This is the best leading indicator of demand. And I want to point out, February was a short month, hampered by weather events across the country that shut down several states. But despite that, it was our strongest sales volume month to date. We reached a new high for weekly sales the last week in February following the launch of the Get Sexy ad on television. Pepsi prescriptions continue to grow despite COVID-19, despite the holidays and the recent polar vortex. Since the Pepsi launch in September of last year, our marketing efforts have been growing and setting a strong foundation with a strong footprint with consumers. But it was crucial that we escalate those efforts to ensure that we drive the mass reach needed to break through. In 2021, our focus and goal is to rapidly increase awareness and to drive demand. In doing this, we'll bring more women to the top of the funnel, then actively work to move them through the funnel all the way to conversion. We estimate every 1% increase in sexy awareness translates to approximately $30 million in gross revenue. As of today, we have IQVIA data through the week ending February 12th. Total sexy prescriptions hit new weekly highs in each of the first two weeks of the month. leading into the launch of our DTC campaign on Valentine's Day, which we anticipate will have a very significant impact on the SEXI growth curve. As you know, we launched SEXI in September of 2020, and we launched it with a hybrid commercial team. We have 59 FOSM representatives in the field, working with 11 regional managers and calling on roughly the top 3,500 accounts and 10,000 healthcare provider targets. They're complemented by a telesales team contracted with Archer Healthcare that we're using to reach HCP targets in remote geographies or where in-person access has been rendered impossible during the COVID lockdown. Both our EvoFem and Archer reps are focusing specifically on healthcare providers who are likely to write sexy based on their contraceptive prescribing history and attitudinal segmentation. I am very pleased to say that our well-trained, focused, and committed sales organization continues to deliver impressive results. As of February 12th, more than 2,650 healthcare providers have prescribed FEXI. Jay and I both mentioned the Get FEXI campaign and its impact already several times, but I want to take a step back. I want to make sure that you understand what we're referring to exactly. This high-impact, dynamic campaign is designed to reach women in a purposeful and a targeted manner. It encompasses television, streaming, and digital channels, and leverages influencers and partnerships with the ultimate goal of driving demand for fexes. The GetFexy ad highlights some of the struggles that women face when they choose among the many available methods of contraception, whether it's the lack of control of condoms, constant daily use of the pill, or abstinence required for cycle tracking. the women featured in the commercial represent real-life drawbacks that FEXI can help eliminate as a hormone-free, on-demand birth control method. In just the first two weeks after GetFEXI launched, our ads generated 115 million views and impressions across all media channels. FEXI brand awareness doubled from January. To put this in perspective, we were tracking at about 4% and it was literally like flipping a switch. We went, boom, immediately to 8% in one month. Organic searches for Sexy have increased 362% since launch, and direct web traffic, meaning people typing in Sexy.com in their browsers, is up 200%. Actions on Sexy.com have also increased dramatically. telehealth booking and fulfillment by our third party mail order pharmacy reached new weekly highs for both weeks ending February 19th and February 26th. For the week ending February 26th, over 300 telehealth appointments were booked and 100% of those were completed and Sexy was prescribed and dispensed to 100% of these women. And again, we're not even really seeing the impact of the Get Sexy DTC campaign on prescribers or total prescriptions yet because we only had data through February 12th. So stay tuned. Another initiative we expect that will positively impact Sexy Uptake is our collaboration with ENCODA. Our collective goal is to support female cancer patients as they decide which contraceptive option best meets their unique individual needs. There are more than 800,000 new cases of cancer reported in women in the U.S. every single year. Many cancer treatment protocols require female patients of reproductive age to use birth control while they undergo treatment, and the vast majority of oncologists will not permit their patients to use hormonal birth control. If you just look at breast cancer alone, the American Society of Reproductive Medicine recommends that all women who are suspected or known to have breast cancer or who have had it in the past should avoid hormonal contraception. So, if you consider the anticipated impact of the DTC campaign on FEXI uptake, as well as the heightened awareness that we aim to build among oncology pharmacy teams and the patients they serve, we expect the FEXI uptake curve will increase dramatically from where it was in December and January. Market access remains a priority. We're proud to have 55% of commercial lives covered and additional coverage to the Medicaid National Drug Rebate Program that covers 17 million women aged 19 to 49. And already, we have multiple plans with FECSI at zero copay. We continue to offer our copay support program to women whose plans don't yet cover FECSI or that have it on formulary with a copay of over $30 for FECSI, because access is our near-term priority. Meanwhile, we're working diligently through multiple channels to achieve our goal of affordable access to Sexy for all women. This includes advocating for the Office of Women's Health to update and expand its contraceptive categories to include a new category, vaginal pH modulator, to reflect Sexy's unique mechanism of action. We believe this mandate will increase coverage for women of reproductive age under ACA. contraceptive choice should not be a luxury available just to some women. Every woman deserves to choose the method that's right for her individual health and her unique circumstances. So now I quickly want to pivot and just talk to you briefly about our STI prevention program. Our next asset in development is EVO 100 for the prevention of the two most common STIs, chlamydia and gonorrhea. This is a late-stage program and a near-term opportunity And STI prevention is another potentially large market with a clear unmet medical need. STI prevention is critically important now more than ever because rates of chlamydia and gonorrhea have climbed in 2018 for the fifth consecutive year in a row in the United States with 1.8 million cases of chlamydia and 600,000 of gonorrhea. But here's why it matters. Many STIs are asymptomatic. They go undiagnosed. They go untreated, and that's very problematic for two reasons. One, there are serious health consequences for infected people. If it's left untreated, some infections will cause pelvic inflammatory disease, infertility, or severe complications in pregnancy and for newborns. And the infected person can unknowingly infect sexual partners. That's why the CDC says, Anyone who's sexually active can get gonorrhea or chlamydia. And in the U.S. alone, there are 78 million sexually active women, and they are all potentially at risk for STIs. So in October, we initiated our pivotal phase three trial for EVO 100. This trial will enroll 1,730 women at 90 U.S. study sites, and 59 of these sites have already been activated. We continue on track to complete our enrollment by the end of this year, and we expect to report top line results in the first half of 2022. This will keep us on schedule to file the NDA for these potential indications by the end of next year. And again, I want to say it again, there are 78 million women at risk for these STIs in the U.S. alone. So we believe this makes this a significant market opportunity. So I'd like to end with the word that I started with, execution. Yes, the pandemic is making our efforts challenging, but I want to assure you that we are an organization that continues to find solutions to create access to FEXI no matter what. We're just getting started. And if you have any doubt about whether this is the right time for FEXI, I want to remind you, in just two weeks of our Get FEXI campaign, The search for FEXI is up 362%. So with that, I'd like to open the call for questions.

Thank you. As a reminder, to ask a question, you would need to press star then 1 on your telephone. To withdraw your question, please press the pound key. Our first question comes from the line of Jeff Hung with Morgan Stanley. Your line is now open.