Part I [Business](index=3&type=section&id=Item%201.%20Business) The company transitioned to a pharmaceutical royalty model in December 2022, generating revenue from licensed products like IMVEXXY and BIJUVA through partners such as Mayne Pharma after divesting its vitaCare business and downsizing operations - In December 2022, the company shifted its business model to a pharmaceutical royalty company, primarily collecting royalties from licensees and ceasing research, development, and commercial operations[15](index=15&type=chunk) - A significant transaction with Mayne Pharma granted them exclusive U.S. commercialization rights for IMVEXXY, BIJUVA, and prenatal vitamins, and assigned the ANNOVERA license[15](index=15&type=chunk) Mayne Pharma Royalty and Milestone Terms | Royalty/Milestone | Terms | | :--- | :--- | | **Royalties** | 8.0% on the first $80 million in annual net sales, 7.5% on sales above $80 million. Rate decreases to 2.0% upon patent expiration or generic launch | | **Minimum Annual Royalty** | $3.0 million per year for 12 years, adjusted for inflation | | **Sales Milestones** | Up to $30 million in one-time payments: $5 million at $100 million annual net sales, $10 million at $200 million, and $15 million at $300 million | | **Upfront Consideration** | $140.0 million cash at closing, plus ~$12.1 million for net working capital and ~$1.0 million in prepaid royalties | - On April 14, 2022, the company divested vitaCare Prescription Services, Inc., receiving **$142.6 million** in net proceeds and recognizing a **$143.4 million** gain, with a potential additional earn-out of up to **$7.0 million**[24](index=24&type=chunk) - Post-transformation, the company terminated all employees except the CEO, operating as a virtual entity with one full-time employee and external consultants[23](index=23&type=chunk)[109](index=109&type=chunk) - The company holds **54** issued domestic and **47** issued foreign patents, with key BIJUVA and IMVEXXY patents expiring between **2032** and **2034**[82](index=82&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20factors) The company faces significant risks from its royalty-based model, including dependence on licensee sales, going concern doubts, reliance on third-party manufacturers, market acceptance, pricing pressures, and intellectual property challenges - The company's revenue is entirely royalty-based, making it vulnerable to licensees' sales performance[115](index=115&type=chunk) - Substantial doubt exists regarding the company's ability to continue as a going concern, as noted by its independent auditor, due to liquidity and potential capital needs[119](index=119&type=chunk) - Dependence on third-party CMOs like Catalent and Sever Pharma Solutions for product supply poses risks of manufacturing or compliance disruptions[122](index=122&type=chunk)[123](index=123&type=chunk) - A Paragraph IV notice from Teva Pharmaceuticals challenging IMVEXXY patents could lead to generic competition and reduced royalty revenue if litigation is adverse[98](index=98&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Future legislation, including the Inflation Reduction Act of 2022, may adversely affect reimbursement and pricing for licensed products, potentially reducing royalty income[158](index=158&type=chunk) - Nasdaq issued a deficiency notice for failing to hold a 2022 annual stockholder meeting, with potential delisting if compliance is not met by June 29, 2023[213](index=213&type=chunk)[214](index=214&type=chunk) [Unresolved Staff Comments](index=43&type=section&id=Item%201B.%20Unresolved%20staff%20comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None [Properties](index=43&type=section&id=Item%202.%20Properties) The company's Boca Raton headquarters, leased for approximately 62,748 square feet, is being subleased following the business model shift to a royalty company and employee terminations - The company leases **62,748 square feet** for its headquarters in Boca Raton, Florida[253](index=253&type=chunk)[254](index=254&type=chunk) - As a pharmaceutical royalty company, the company is in the process of subleasing its headquarters[254](index=254&type=chunk) [Legal Proceedings](index=44&type=section&id=Item%203.%20Legal%20proceedings) The company is involved in patent infringement litigation against Teva Pharmaceuticals over IMVEXXY, with management responsibility transferred to Mayne Pharma, while previous litigation with Amneal over BIJUVA was settled - In February 2020, Teva Pharmaceuticals submitted an ANDA to the FDA for a generic IMVEXXY version, alleging patent invalidity or non-infringement[255](index=255&type=chunk) - The company filed a patent infringement lawsuit against Teva in April 2020, which is currently stayed, extending the 30-month statutory stay on FDA approval of Teva's ANDA[255](index=255&type=chunk) - As of December 30, 2022, responsibility for patent enforcement, including the Teva litigation, transferred to Mayne Pharma[255](index=255&type=chunk) [Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20safety%20disclosures) This item is not applicable to the company - Not applicable[257](index=257&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=45&type=section&id=Item%205.%20Market%20for%20registrant%27s%20common%20equity%2C%20related%20stockholder%20matters%2C%20and%20issuer%20purchases%20of%20equity%20securities) The company's common stock trades on the Nasdaq Global Select Market under symbol "TXMD", with no history or future plans for cash dividends, as earnings are retained for operations - The company's common stock trades on the Nasdaq Global Select Market under the symbol **"TXMD"**[259](index=259&type=chunk) - The company has never paid dividends and does not plan to in the foreseeable future, intending to retain earnings for operations[261](index=261&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%207.%20Management%27s%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) The company's 2022 financial results reflect its royalty-based transformation, with continuing operations showing a **$1.1 million** net income driven by **$70.0 million** in license revenue, and discontinued operations generating **$110.9 million** net income from divestitures, despite ongoing going concern doubts Results of Operations from Continuing Operations (2022 vs 2021) | (In thousands) | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | **Total revenue, net** | $69,963 | $2,573 | | Gross profit | $68,566 | $1,171 | | Total operating expenses | $67,375 | $80,748 | | **Income (loss) from operations** | $1,191 | $(79,577) | | **Net income (loss) from continuing operations** | $1,074 | $(79,305) | - The significant increase in 2022 revenue from continuing operations is due to recognizing **$70.0 million** in license revenue from the Mayne License Agreement[294](index=294&type=chunk) - Discontinued operations generated **$110.9 million** in income in 2022, primarily from a **$143.4 million** gain on vitaCare's sale and a **$62.0 million** gain on ANNOVERA assets to Mayne Pharma[301](index=301&type=chunk) - The company's cash position was **$38.1 million** as of December 31, 2022, with all Financing Agreement obligations repaid and terminated[302](index=302&type=chunk)[315](index=315&type=chunk) - Management concluded substantial doubt exists about the Company's ability to continue as a going concern for the next twelve months, citing potential licensee sales delays, working capital adjustments, and future financing needs[322](index=322&type=chunk) - Critical accounting policies include allocating Mayne transaction proceeds between ANNOVERA asset sale (ASC 610-20) and other product licenses (ASC 606), recognizing minimum guaranteed royalty payments as fixed consideration at present value[334](index=334&type=chunk)[335](index=335&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%207A.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) As a "smaller reporting company," the company is not required to provide this information - The company is not required to provide this information as it qualifies as a "smaller reporting company"[346](index=346&type=chunk) [Financial Statements and Supplementary Data](index=56&type=section&id=Item%208.%20Financial%20statements%20and%20supplementary%20Data) This section incorporates by reference the company's audited consolidated financial statements, accompanying notes, and the independent auditor's report, commencing on page F-1 - Refers to the financial statements, notes, and auditor's report commencing on page F-1[347](index=347&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=56&type=section&id=Item%209.%20Changes%20in%20and%20disagreements%20with%20accountants%20on%20accounting%20and%20financial%20disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None [Controls and Procedures](index=56&type=section&id=Item%209A.%20Controls%20and%20procedures) Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes in the most recent fiscal quarter, and no auditor attestation report is included due to filing status - Management concluded the company's disclosure controls and procedures were effective as of December 31, 2022[349](index=349&type=chunk) - Management assessed internal control over financial reporting using the COSO framework and concluded it was effective as of December 31, 2022[354](index=354&type=chunk) - No material changes were made to the internal control over financial reporting during the most recent fiscal quarter[350](index=350&type=chunk) [Other Information](index=57&type=section&id=Item%209B.%20Other%20information) The company reports no other information for this item - None Part III [Directors, Executive Officers and Corporate Governance](index=58&type=section&id=Item%2010.%20Directors%2C%20executive%20officers%20and%20corporate%20governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[359](index=359&type=chunk) [Executive Compensation](index=58&type=section&id=Item%2011.%20Executive%20compensation) Executive compensation information is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[360](index=360&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=58&type=section&id=Item%2012.%20Security%20ownership%20of%20certain%20beneficial%20owners%20and%20management%20and%20related%20stockholder%20matters) Security ownership and related stockholder matters information is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[361](index=361&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=58&type=section&id=Item%2013.%20Certain%20relationships%20and%20related%20transactions%2C%20and%20director%20independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[362](index=362&type=chunk) [Principal Accountant Fees and Services](index=58&type=section&id=Item%2014.%20Principal%20accountant%20fees%20and%20services) Principal accountant fees and services information is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[363](index=363&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=59&type=section&id=Item%2015.%20Exhibits%20and%20financial%20statement%20schedules) This section lists financial statements and exhibits filed with the Form 10-K, including material contracts and certifications, with financial statements commencing on page F-1 and no separate schedules included - This section lists all exhibits filed with the 10-K report, including material contracts like the License and Transaction Agreements with Mayne Pharma[365](index=365&type=chunk) - The financial statements are listed in the Index to Financial Statements on page F-1[366](index=366&type=chunk) [Form 10-K Summary](index=64&type=section&id=Item%2016.%20Form%2010-K%20summary) The company reports no Form 10-K summary - None

Part I – Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20statements) The financial statements reveal a net income driven by a one-time business sale, which masks ongoing operating losses and significant 'going concern' risks Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $27,080 | $65,122 | | Total current assets | $87,478 | $119,468 | | Total assets | $133,907 | $169,472 | | **Liabilities & Stockholders' Deficit** | | | | Debt, net | $93,602 | $188,269 | | Total current liabilities | $174,071 | $252,891 | | Total liabilities | $182,178 | $263,093 | | Total stockholders' deficit | $(48,271) | $(93,621) | Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue, net | $20,917 | $25,406 | $68,811 | $68,273 | | Loss from operations | $(20,747) | $(39,921) | $(65,817) | $(104,378) | | Gain on sale of business | — | — | $143,384 | — | | Net (loss) income | $(28,965) | $(47,420) | $34,295 | $(129,455) | | (Loss) earnings per share, basic | $(3.13) | $(5.62) | $3.86 | $(16.68) | Consolidated Statement of Cash Flows Highlights (Nine Months Ended Sep 30, in thousands) | Cash Flow Category | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(63,850) | $(103,135) | | Net cash provided by (used in) investing activities | $142,316 | $(709) | | Net cash (used in) provided by financing activities | $(105,258) | $128,199 | | Net (decrease) increase in cash and restricted cash | $(26,792) | $24,355 | - The company completed a **50-for-1 reverse stock split** of its Common Stock on May 6, 2022, with all historical share and per-share data adjusted accordingly[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 1. Business and Going Concern](index=7&type=section&id=Note%201.%20Business%2C%20basis%20of%20presentation%2C%20new%20accounting%20standards%20and%20summary%20of%20significant%20accounting%20policies) The company divested its vitaCare business while facing substantial doubt about its ability to continue as a going concern due to operating losses - On April 14, 2022, the company completed the divestiture of vitaCare Prescription Services, receiving net proceeds of **$142.6 million** and recognizing a gain on sale of **$143.4 million**[18](index=18&type=chunk) - The company's financial condition raises **substantial doubt about its ability to continue as a going concern**, having incurred a loss from operations of **$65.8 million** for the nine months ended Sep 30, 2022[25](index=25&type=chunk)[32](index=32&type=chunk) - To address capital needs, the company is pursuing various strategic alternatives, including the possibility of filing for **Chapter 11 protection** if these alternatives fail[31](index=31&type=chunk) [Note 8. Debt](index=12&type=section&id=Note%208.%20Debt) Debt was significantly reduced using proceeds from a divestiture, though the maturity date required multiple extensions Debt Balance (in thousands) | | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Financing Agreement | $94,432 | $200,000 | | Less: deferred financing fees | $830 | $11,731 | | **Debt, net** | **$93,602** | **$188,269** | - In April 2022, the company used **$120.0 million** of net proceeds from the vitaCare Divestiture to make a prepayment on its loans[55](index=55&type=chunk) - The maturity date of the Financing Agreement was extended multiple times, with the date as of September 30, 2022, being **October 31, 2022**, and subsequently extended to **November 30, 2022**[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Note 9. Commitments and Contingencies](index=14&type=section&id=Note%209.%20Commitments%20and%20contingencies) The company has minimum purchase commitments, is involved in patent litigation, and recorded significant executive severance expenses - The company has **minimum purchase commitments** with third-party manufacturers for its products ANNOVERA, IMVEXXY, and BIJUVA[67](index=67&type=chunk) - The company is involved in a **patent infringement lawsuit** against Teva Pharmaceuticals concerning a generic version of IMVEXXY[70](index=70&type=chunk) - Following the separation of the former CEO in September 2022, the company recorded executive severance expenses of **$4.8 million**[72](index=72&type=chunk) [Note 10. Mandatory Redeemable Preferred Stock and Stockholders' Deficit](index=15&type=section&id=Note%2010.%20Mandatory%20Redeemable%20Preferred%20Stock%20and%20Stockholders'%20Deficit) The company raised capital through private placements of Mandatory Redeemable Preferred Stock, which is classified as a current liability - In July and September 2022, the company raised capital through private placements with **Rubric Capital Management LP**, issuing Mandatory Redeemable Preferred Stock and Common Stock[73](index=73&type=chunk)[74](index=74&type=chunk) - The company received aggregate gross proceeds of **$15.0 million** in July and **$7.0 million** in September, with the Preferred Stock classified as a current liability due to its mandatory redemption date[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) [Note 11. Revenue](index=18&type=section&id=Note%2011.%20Revenue) Net product revenue decreased in the third quarter but remained stable for the nine-month period, led by sales of ANNOVERA Disaggregated Revenue by Product (in thousands) | Product | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | ANNOVERA | $10,415 | $11,807 | $37,196 | $30,112 | | IMVEXXY | $6,947 | $8,016 | $20,583 | $24,866 | | BIJUVA | $2,663 | $3,298 | $7,877 | $7,899 | | Prescription vitamin | $892 | $1,335 | $2,671 | $4,162 | | **Product revenue, net** | **$20,917** | **$24,456** | **$68,327** | **$67,039** | [Note 16. Subsequent Events](index=21&type=section&id=Note%2016.%20Subsequent%20events) Following the quarter's end, the company raised additional capital and further extended its debt maturity date - On October 28, 2022, the company sold an additional 7,000 shares of Preferred Stock for gross proceeds of **$7.0 million**[94](index=94&type=chunk) - In connection with the October financing, the company issued additional Lender Warrants and extended the maturity date of its Financing Agreement to **November 30, 2022**[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management's discussion highlights the critical 'going concern' risk from impending debt maturity, decreased quarterly revenue, and the urgent need for new capital [Going Concern](index=23&type=section&id=Going%20concern) Management acknowledges substantial doubt about the company's ability to continue as a going concern due to its debt obligations - Management states that operational losses and upcoming debt maturity raise **substantial doubt** about its ability to continue as a going concern for the next twelve months[109](index=109&type=chunk)[118](index=118&type=chunk) - The company is actively pursuing strategic alternatives but warns that a **Chapter 11 filing** is a possibility if these efforts fail before the debt matures[117](index=117&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20operations) Quarterly revenue declined due to lower product sales, though operating expenses were significantly reduced, and nine-month net income was solely due to a one-time gain Revenue Comparison (in thousands) | Period | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Three Months Ended Sep 30 | $20,917 | $25,406 | -17.7% | | Nine Months Ended Sep 30 | $68,811 | $68,273 | +0.8% | - The **17.7% decrease in Q3 2022 revenue** was primarily driven by lower sales of ANNOVERA (-11.8%) and IMVEXXY (-13.3%)[127](index=127&type=chunk)[128](index=128&type=chunk) - Total operating expenses **decreased by 36.9% in Q3 2022** and **23.5% in the first nine months of 2022**, reflecting cost reduction efforts and the vitaCare divestiture[134](index=134&type=chunk)[148](index=148&type=chunk) - For the first nine months of 2022, the company reported net income of **$34.3 million**, which was entirely due to the non-recurring gain of **$143.0 million** from the vitaCare divestiture[154](index=154&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20capital%20resources) The company's liquidity is strained with low cash reserves, though cash used in operations improved year-over-year - As of September 30, 2022, the company had cash totaling **$27.1 million**[155](index=155&type=chunk) - Net cash used in operating activities for the first nine months of 2022 was **$63.9 million**, a **38.1% improvement** from the $103.1 million used in the same period of 2021[159](index=159&type=chunk) - Net cash used in financing activities was **$105.3 million**, primarily due to a **$125.0 million repayment of debt**[14](index=14&type=chunk)[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) The company is exempt from providing market risk disclosures as it qualifies as a "smaller reporting company" - The company is exempt from providing quantitative and qualitative disclosures about market risk because it qualifies as a **"smaller reporting company"**[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Based on an evaluation, the company's Chief Executive Officers and Interim Chief Financial Officer concluded that **disclosure controls and procedures were effective**[171](index=171&type=chunk) - **No material changes** in internal control over financial reporting occurred during the third quarter of 2022[173](index=173&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20proceedings) The company's primary legal matter is an ongoing patent infringement lawsuit related to its product IMVEXXY - The company's primary legal proceeding is the **patent infringement case against Teva** concerning a generic version of IMVEXXY, as detailed in Note 9 of the financial statements[174](index=174&type=chunk)[70](index=70&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20factors) The company's substantial indebtedness and impending debt maturity create a significant 'going concern' risk that may impede its ability to raise capital - The company's level of indebtedness, with **$94.4 million outstanding** maturing in November 2022, raises substantial doubt about its ability to continue as a **going concern**[176](index=176&type=chunk) - **Current cash on hand is not sufficient** to pay the amounts due under the Financing Agreement upon maturity, requiring the company to raise additional capital[180](index=180&type=chunk) - The **'going concern' opinion** from the independent auditor could materially limit the company's ability to raise additional funds[180](index=180&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) The company reported no unregistered sales of equity securities during the period - **None reported** for the period[182](index=182&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including financing amendments and officer certifications

Financial Performance - The company reported a loss from operations of $45.1 million and interest expense of $26.1 million for the six months ended June 30, 2022[104]. - Total revenue for Q2 2022 was $28.6 million, an increase of $5.6 million, or 24.2%, compared to Q2 2021[119]. - ANNOVERA sales were $18.3 million for Q2 2022, an increase of $8.7 million, or 91.2%, compared to Q2 2021[120]. - IMVEXXY sales were $6.7 million for Q2 2022, a decrease of $3.2 million, or 32.2%, compared to Q2 2021[121]. - BIJUVA sales were $2.7 million for Q2 2022, an increase of $0.5 million, or 23.1%, compared to Q2 2021[122]. - Gross profit for Q2 2022 was $23.8 million, an increase of $5.0 million, or 26.2%, compared to Q2 2021[125]. - Total operating expenses for Q2 2022 were $42.7 million, a decrease of $11.4 million, or 21.1%, compared to Q2 2021[126]. - Net income for Q2 2022 was $112.3 million, or $12.83 per basic common share, including a non-recurring gain of $142.8 million from the vitaCare divestiture[131]. - Total revenue for the first six months of 2022 was $47.9 million, an increase of $5.0 million, or 11.7%, compared to the first six months of 2021[132]. - IMVEXXY sales for the first six months of 2022 were $13.6 million, a decrease of $3.2 million, or 19.1%, compared to the first six months of 2021[133]. - BIJUVA sales for the first six months of 2022 were $5.2 million, an increase of $0.6 million, or 13.3%, compared to the first six months of 2021[134]. - Prescription vitamin sales decreased to $1.8 million for the first six months of 2022, down $1.0 million or 37.1% compared to the same period in 2021[137]. - Total product sales increased to $47.4 million for the first six months of 2022, an increase of $4.8 million or 11.3% compared to the first six months of 2021[137]. - Gross profit for the first six months of 2022 was $38.3 million, an increase of $4.2 million or 12.5% compared to the same period in 2021[139]. - Total operating expenses decreased to $83.4 million for the first six months of 2022, a decrease of $15.1 million or 15.4% compared to the first six months of 2021[140]. - Net income for the first six months of 2022 was $63.3 million, or $7.29 per basic common share, including a non-recurring gain of $142.8 million from the sale of the vitaCare business[146]. Cash Flow and Liquidity - Net cash used in operating activities was $44.9 million for the first six months of 2022, a decrease of $20.0 million or 30.8% compared to the same period in 2021[151]. - Net cash provided by investing activities was $142.3 million for the first six months of 2022, an increase of $142.9 million or 27110.8% compared to the first six months of 2021[152]. - Net cash used in financing activities was $125.0 million for the first six months of 2022, a change of $221.4 million or 229.7% compared to the same period in 2021[153]. - As of June 30, 2022, the company had cash totaling $26.3 million[147]. - The company had $90.8 million in term loans outstanding under its Financing Agreement as of June 30, 2022, down from $200.0 million as of December 31, 2021[157]. Divestiture and Strategic Actions - The company completed the divestiture of vitaCare Prescription Services, receiving net proceeds of $142.6 million and recognizing a gain on sale of $143.4 million[96]. - The company may receive up to an additional $7.0 million in earn-out consideration from the vitaCare divestiture, contingent on vitaCare's financial performance through 2023[96]. - The company has a long-term services agreement with vitaCare to utilize its platform for product support post-divestiture[98]. - The company is pursuing various equity and debt refinancing options to address capital needs, including potential Chapter 11 protection if financing fails[105]. Product Development and Market Conditions - ANNOVERA, a contraceptive product, is expected to meet future demand with increased manufacturing capacity following FDA approval of a supplemental NDA[114]. - The company has implemented significant cost-saving measures in response to the COVID-19 pandemic, including reducing marketing expenses and hiring restrictions[101]. - The company continues to face uncertainties related to the COVID-19 pandemic, which may impact financial condition and liquidity[102]. - The company’s product portfolio includes IMVEXXY, BIJUVA, and ANNOVERA, with ongoing commercialization efforts since their respective launches[111]. Financial Position - Current liabilities exceeded current assets by $65.4 million, and total liabilities exceeded total assets by $26.1 million as of June 30, 2022[104]. - The company qualifies as a "smaller reporting company" under Rule 12b-2 of the Securities Exchange Act of 1934[160]. - The company is not required to provide quantitative and qualitative disclosures about market risk due to its reporting status[160].

Financial Data and Key Metrics Changes - Total net revenue for Q2 2022 was $28.6 million, an increase of 24% compared to Q2 2021 [6] - Total operating expenses decreased by $11.4 million or 21% during the quarter [6][16] - Gross profit rose by 26% to $23.8 million [6][15] Business Line Data and Key Metrics Changes - Sales of ANNOVERA reached $18.3 million, an increase of 91.2% compared to Q2 2021, primarily due to increased sales volume [12] - IMVEXXY sales were $6.7 million, a decrease of 32.2% compared to Q2 2021, attributed to lower sales volume and average sales price [13] - BIJUVA sales increased to $2.7 million, up 23.1% compared to Q2 2021, driven by a Theramex license agreement and increased sales volume [13] - Prescription vitamin sales decreased to $0.9 million, down 35.5% compared to Q2 2021, due to lower sales volume and average sales price [14] Market Data and Key Metrics Changes - ANNOVERA prescriptions grew 28% compared to Q2 2021, reaching an all-time high of 901 prescriptions in the last week of the quarter [22] - New prescribers for ANNOVERA increased to 12,000, indicating strong demand and growth potential [23] - IMVEXXY added 1,606 new prescribers, exceeding 30,000 since launch, despite a slight decline in total prescriptions [25] Company Strategy and Development Direction - The company completed the divestiture of the vitaCare business unit, allowing for a more focused business strategy [7] - The FDA approved a supplemental new drug application for ANNOVERA, expected to reduce manufacturing batch rejections and increase product supply [8] - The company is evaluating options for refinancing current debt and pursuing strategic alternatives to support operations and growth [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the ambiguity in the operating environment but expressed confidence in the team's performance and commitment [32] - The company is optimistic about the demand for ANNOVERA and believes the recent revenue performance reflects genuine end demand [34][36] - Management addressed concerns about rejection rates for ANNOVERA, stating that root causes have been identified and resolved [42][43] Other Important Information - The company recognized a gain of $143.4 million from the sale of the vitaCare business [20] - Net cash used in operating activities was $15.4 million for the quarter, with $26.3 million in cash as of June 30, 2022 [21] Q&A Session Summary Question: Employee retention rates in the sales force amid uncertainty - Management remains encouraged by the commitment of the field force despite ambiguity, with turnover rates being reasonable [31][33] Question: Revenue performance of ANNOVERA and demand reflection - Revenue performance is primarily based on demand, with a restocking of channels occurring due to previous inventory concerns [36] Question: Concerns about rejection rates affecting long-term product opportunity - Management confirmed that rejection rates for ANNOVERA have been addressed and do not expect them to impact long-term opportunities [42][43] Question: Vision for the company post-tender process - The company is focused on maintaining operations and meeting demand while evaluating all options for long-term financial strength [46]

TherapeuticsMD® | --- | --- | --- | |-------------------------------------------------------------------------------|-------|-------| | | | | | Building the Premier Women's Health Company Q2 2022 Earnings August 15, 2022 | | | | FOR INVESTOR PRESENTATION PURPOSES ONLY. | | | Forward-Looking Statements This presentation by TherapeuticsMD, Inc. may contain forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to TherapeuticsMD's objectives, plans and s ...

Financial Data and Key Metrics Changes - The company's net product revenue for Q1 2022 was $19.3 million, a slight increase of 3.5% compared to $18.7 million in Q4 2021, but a decrease of 2.7% from $19.9 million in Q1 2021 [8][12] - Gross profit for Q1 2022 was $14.5 million, down 4.7% from Q1 2021, but up 3.8% from Q4 2021 [18] - Selling and marketing costs decreased by 21.3% year-over-year to $18.9 million, and general and administrative costs increased by 11% to $20.4 million compared to Q1 2021 [19][20] Business Line Data and Key Metrics Changes - ANNOVERA sales were $8.5 million in Q1 2022, down 2.7% from Q1 2021, but up 8.7% from Q4 2021 [13][14] - IMVEXXY net revenue remained flat at $7 million compared to Q1 2021, but increased by 4.5% from Q4 2021 [14] - BIJUVA sales increased by 4.7% year-over-year to $2.6 million, but decreased by 4.5% quarter-over-quarter [15] Market Data and Key Metrics Changes - Total quarterly prescriptions for ANNOVERA increased by 27% compared to Q1 2021, despite supply challenges [29] - The company is seeing early improvements in demand for IMVEXXY and BIJUVA following strategic realignments [30][32] Company Strategy and Development Direction - The company is focused on optimizing sales targeting and leveraging all three product assets effectively [26] - There is an emphasis on building inventory for ANNOVERA to meet growing demand, with expectations of improved manufacturing in Q2 2022 [28][29] - The management believes that the new commercial plan is yielding positive results, with increased sales productivity and robust demand for products [33] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that ANNOVERA supply challenges peaked in Q1 2022 and expects incremental improvement as the year progresses [8] - The company has paused offering full-year guidance for 2022 until clarity on capital structure and FDA feedback is received [9] Other Important Information - The company completed the $150 million divestiture of vitaCare, receiving approximately $138.5 million in cash [11] - Net cash used in operating activities was $29.5 million for Q1 2022, with $30.4 million in cash as of March 31, 2022 [25] Q&A Session Summary Question: What are the expectations for ANNOVERA's supply challenges? - Management believes that supply challenges peaked in Q1 2022 and anticipates improvements in manufacturing throughout Q2 [8][29] Question: How is the company addressing sales productivity? - The company is focusing on optimizing sales targeting and leveraging all three product assets effectively, which has already shown positive results [26][33]

```markdown Part I – Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20statements) This section presents TherapeuticsMD's unaudited consolidated financial statements for Q1 2022, detailing balance sheets, operations, equity, and cash flows, along with explanatory notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $133.38 million, liabilities increased, and stockholders' deficit worsened to $140.58 million by March 31, 2022 Key Balance Sheet Metrics | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | | Total Assets | $133,381 | $169,472 | $(36,091) | | Total Liabilities | $273,961 | $263,093 | $10,868 | | Total Stockholders' Deficit | $(140,580) | $(93,621) | $(46,959) | | Cash | $30,384 | $65,122 | $(34,738) | | Current Maturities of Debt | $202,857 | $188,269 | $14,588 | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2022 net loss increased to $49.02 million due to higher other expenses, despite slightly lower revenue and reduced operating expenses Key Operations Metrics | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | YoY Change (%) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------------- | | Total Revenue, net | $19,333 | $19,866 | $(533) | -2.7% | | Total Gross Profit | $14,473 | $15,179 | $(706) | -4.7% | | Total Operating Expenses | $40,702 | $44,457 | $(3,755) | -8.4% | | Loss from Operations | $(26,229) | $(29,278) | $3,049 | -10.4% | | Total Other Expense, net | $(22,792) | $(10,105) | $(12,687) | 125.6% | | Net Loss | $(49,021) | $(39,383) | $(9,638) | 24.5% | | Loss per Common Share, basic and diluted | $(5.69) | $(5.67) | $(0.02) | 0.4% | [Consolidated Statements of Stockholders' Deficit](index=5&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Deficit) Accumulated deficit increased to $1,100.38 million, and total stockholders' deficit worsened to $140.58 million by March 31, 2022, driven by net loss Key Stockholders' Deficit Metrics | Metric | January 1, 2022 (in thousands) | March 31, 2022 (in thousands) | | :------------------------ | :---------------------------- | :--------------------------- | | Common Stock | $9 | $9 | | Additional Paid-in Capital | $957,730 | $959,792 | | Accumulated Deficit | $(1,051,360) | $(1,100,381) | | Total Stockholders' Deficit | $(93,621) | $(140,580) | [Consolidated Statements of Cash Flows](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to $29.53 million, but financing activities shifted to a $5.0 million outflow, resulting in a $34.74 million net cash decrease Key Cash Flow Metrics | Cash Flow Category | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | YoY Change (%) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :------------- | | Net Cash Used in Operating Activities | $(29,526) | $(38,380) | $8,854 | -23.1% | | Net Cash Used in Investing Activities | $(212) | $(438) | $226 | -51.6% | | Net Cash (Used in) Provided by Financing Activities | $(5,000) | $95,949 | $(100,949) | -105.2% | | Net (Decrease) Increase in Cash | $(34,738) | $57,131 | $(91,869) | -160.8% | | Cash, End of Period | $30,384 | $137,617 | $(107,233) | -77.9% | [Notes to Unaudited Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the unaudited consolidated financial statements, covering business operations, significant accounting policies, recent divestitures, the impact of COVID-19, and the company's going concern status [Note 1. Business, Basis of Presentation, New Accounting Standards and Summary of Significant Accounting Policies](index=7&type=section&id=Note%201.%20Business%2C%20basis%20of%20presentation%2C%20new%20accounting%20standards%20and%20summary%20of%20significant%20accounting%20policies) This note outlines TherapeuticsMD's business, accounting policies, recent divestitures, and going concern status, including a reverse stock split - TherapeuticsMD is a women's healthcare company focused on products from pregnancy prevention through menopause, including contraceptive and hormone therapy products, and prenatal vitamins[20](index=20&type=chunk) - Completed the divestiture of vitaCare Prescription Services, Inc. on April 14, 2022, for a cash payment of **$150.0 million**, with potential for an additional **$7.0 million** in earn-out consideration contingent on financial performance through 2023[21](index=21&type=chunk) - The company incurred a net loss of **$49.0 million** for the three months ended March 31, 2022, and its current liabilities exceeded current assets by **$180.4 million**, raising substantial doubt about its ability to continue as a going concern for the next twelve months[28](index=28&type=chunk) - The company completed a **50-for-1** reverse stock split of its common stock on May 6, 2022, which also reduced the number of authorized shares from **600 million** to **12 million**[31](index=31&type=chunk) [Note 2. Accounts Receivable](index=10&type=section&id=Note%202.%20Accounts%20receivable) Allowance for credit losses remained stable at $1.334 million as of March 31, 2022, with charges offset by write-offs during the quarter Accounts Receivable Summary | Metric | Amount (in thousands) | | :---------------------------- | :-------------------- | | Balance as of January 1, 2022 | $1,334 | | Charges to provision for credit losses | $274 | | Write-off of uncollectible receivables | $(274) | | Balance as of March 31, 2022 | $1,334 | [Note 3. Inventory](index=10&type=section&id=Note%203.%20Inventory) Total inventory increased to $8.97 million by March 31, 2022, driven by raw materials, while ANNOVERA faces manufacturing challenges and awaits FDA response Inventory Breakdown | Inventory Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :----------------- | :---------------------------- | :------------------------------ | | Raw materials | $4,394 | $3,042 | | Work in process | $1,231 | $1,642 | | Finished products | $3,342 | $2,938 | | Total Inventory | $8,967 | $7,622 | - A third-party contract manufacturer for ANNOVERA has experienced increased manufacturing difficulties, resulting in intermittent supply interruptions and challenges to meet projected demand[44](index=44&type=chunk) - The company filed a supplemental NDA in August 2021 to modify ANNOVERA testing specifications to increase supply consistency, responded to an FDA Complete Response Letter in January 2022, and expects a response by the end of Q2 2022[44](index=44&type=chunk) [Note 4. Prepaid and Other Current Assets](index=11&type=section&id=Note%204.%20Prepaid%20and%20other%20current%20assets) Prepaid and other current assets decreased to $9.66 million by March 31, 2022, mainly due to reduced insurance prepayments Prepaid and Other Current Assets Summary | Asset Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :---------------------------- | :---------------------------- | :------------------------------ | | Insurance | $1,644 | $2,731 | | Paragraph IV legal proceeding costs | $2,304 | $2,304 | | Other | $5,712 | $5,513 | | Total Prepaid and other current assets | $9,660 | $10,548 | [Note 5. Fixed Assets](index=11&type=section&id=Note%205.%20Fixed%20assets) Net fixed assets decreased to $1.08 million by March 31, 2022, primarily due to accumulated depreciation and amortization Fixed Assets Summary | Asset Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :---------------------------- | :------------------------------ | | Fixed assets, gross | $3,759 | $3,717 | | Less: accumulated depreciation and amortization | $2,677 | $2,518 | | Fixed assets, net | $1,082 | $1,199 | - Depreciation expense was **$0.2 million** for both the three months ended March 31, 2022, and 2021[48](index=48&type=chunk) [Note 6. Licensed Rights and Other Intangible Assets](index=11&type=section&id=Note%206.%20Licensed%20rights%20and%20other%20intangible%20assets) Net licensed rights and other intangible assets decreased to $39.55 million by March 31, 2022, due to amortization of license rights and patents Licensed Rights and Intangible Assets Summary | Asset Category | March 31, 2022 (Net, in thousands) | December 31, 2021 (Net, in thousands) | | :-------------------------------- | :-------------------------------- | :--------------------------------- | | Licensed rights | $32,420 | $33,174 | | Hormone therapy drug patents | $4,888 | $4,792 | | Hormone therapy drug patents applied and pending approval | $1,907 | $2,020 | | Trademarks/trade name rights | $332 | $332 | | Total Licensed rights and other intangible assets, net | $39,547 | $40,318 | - Amortization expense for exclusive license rights was **$0.8 million** for both Q1 2022 and Q1 2021, while patent amortization was **$0.2 million** in Q1 2022, up from **$0.1 million** in Q1 2021[49](index=49&type=chunk) [Note 7. Accrued Expenses and Other Current Liabilities](index=12&type=section&id=Note%207.%20Accrued%20expenses%20and%20other%20current%20liabilities) Accrued expenses and other current liabilities decreased to $41.23 million by March 31, 2022, driven by lower payroll, rebates, and sales returns Accrued Expenses and Other Current Liabilities Summary | Liability Category | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :---------------------------- | :------------------------------ | | Payroll and related costs | $10,845 | $13,764 | | Rebates | $9,810 | $11,010 | | Sales returns and coupons | $1,252 | $2,422 | | Wholesale distributor fees | $6,352 | $3,614 | | Total Accrued expenses and other current liabilities | $41,225 | $44,304 | - Advertising costs decreased significantly to **$1.9 million** for Q1 2022 from **$6.2 million** for Q1 2021[50](index=50&type=chunk) [Note 8. Debt](index=12&type=section&id=Note%208.%20Debt) Net debt increased to $202.86 million by March 31, 2022, due to Amendment No. 9, which added a $30.0 million PIK fee and amended the maturity to June 1, 2022 Debt Summary | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------- | :---------------------------- | :------------------------------ | | Financing Agreement | $225,000 | $200,000 | | Less: deferred financing fees | $22,143 | $11,731 | | Debt, net | $202,857 | $188,269 | - Amendment No. 9 to the Financing Agreement, entered in March 2022, waived prior breaches, reduced minimum cash covenants, and added a **$30.0 million** paid-in-kind (PIK) amendment fee to the principal, with **$16.0 million** waivable under certain conditions[52](index=52&type=chunk) The maturity date was amended to June 1, 2022[52](index=52&type=chunk) - A **$8.4 million** loss on extinguishment of debt was recorded in March 2022 due to Amendment No. 9, and **$120.0 million** of vitaCare divestiture proceeds were used to prepay debt on April 14, 2022, resulting in a **$16.0 million** waiver of the PIK financing fee[53](index=53&type=chunk)[54](index=54&type=chunk) Interest and Financing Costs | Interest and Financing Costs | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Interest expense | $5,364 | $6,455 | | Interest prepayment fees | $0 | $2,500 | | Financing fees amortization | $9,048 | $1,272 | | Total Interest expense and other financing costs | $14,412 | $10,227 | [Note 9. Commitments and Contingencies](index=13&type=section&id=Note%209.%20Commitments%20and%20contingencies) The company has minimum purchase commitments for key products and is involved in a patent infringement lawsuit against Teva for IMVEXXY, with $2.3 million in capitalized legal costs [Minimum Purchase Commitments](index=13&type=section&id=Minimum%20purchase%20commitments) TherapeuticsMD has minimum purchase commitments for BIJUVA, IMVEXXY, and ANNOVERA, which were met in 2021 and are not expected to materially impact financial position - The company has manufacturing and supply agreements requiring minimum unit purchases for BIJUVA, IMVEXXY, and ANNOVERA, with contract years ending in April, July, and August, respectively[58](index=58&type=chunk)[59](index=59&type=chunk) - For the three annual contract years ending in **2021**, the company met its minimum purchase commitments in all material respects[60](index=60&type=chunk) [Legal Proceedings](index=13&type=section&id=Legal%20proceedings) The company is engaged in a patent infringement lawsuit against Teva for IMVEXXY, with proceedings stayed and $2.3 million in capitalized legal costs - In February 2020, TherapeuticsMD received a Paragraph IV certification notice from Teva Pharmaceuticals USA, Inc. regarding a generic version of IMVEXXY, alleging invalidity or non-infringement of IMVEXXY patents (expiring **2032** or **2033**)[61](index=61&type=chunk) - A patent infringement complaint was filed against Teva in April 2020, and proceedings were temporarily stayed in July 2021, extending the statutory stay preventing FDA approval of Teva's ANDA[61](index=61&type=chunk) - As of March 31, 2022, **$2.3 million** in legal costs for the IMVEXXY Paragraph IV legal proceeding have been capitalized, to be reclassified to patents upon successful conclusion or expensed if unsuccessful[62](index=62&type=chunk) [Note 10. Stockholders' Equity (Deficit)](index=14&type=section&id=Note%2010.%20Stockholders%27%20equity%20(deficit)) As of March 31, 2022, the company had 103 thousand warrants, 316 thousand options, 339 thousand RSUs, and 176 thousand PSUs outstanding, with $2.1 million in Q1 share-based compensation [Warrants](index=14&type=section&id=Warrants) As of March 31, 2022, 103 thousand warrants were outstanding with a weighted average exercise price of $76.19 and 8.1 years remaining contractual life Warrants Summary | Metric | As of March 31, 2022 | As of January 1, 2022 | | :-------------------------------- | :------------------- | :-------------------- | | Outstanding Warrants (in thousands) | 103 | 103 | | Weighted Average Exercise Price | $76.19 | $76.19 | | Weighted Average Remaining Contractual Life (in Years) | 8.1 | 8.3 | [Share-Based Compensation Payment Plans](index=14&type=section&id=Share-based%20compensation%20payment%20plans) As of March 31, 2022, 831 thousand shares were subject to outstanding awards, with 316 thousand options, 339 thousand RSUs, and 176 thousand PSUs outstanding - As of March 31, 2022, **831,066** shares of common stock were subject to outstanding awards (options, RSUs, PSUs) based on base PSU vesting, with **83,880** shares available for future grants[65](index=65&type=chunk) Share-Based Compensation Plans Summary | Metric | As of March 31, 2022 (in thousands) | As of January 1, 2022 (in thousands) | | :-------------------------------- | :--------------------------------- | :-------------------------------- | | Outstanding Options | 316 | 353 | | Weighted Average Exercise Price (Options) | $231.87 | $225.97 | | Outstanding RSUs | 339 | 272 | | Weighted Average Grant Date Fair Value (RSUs) | $43.11 | $58.17 | | Outstanding PSUs | 176 | 164 | | Weighted Average Grant Date Fair Value (PSUs) | $37.85 | $51.50 | [Share-Based Payment Compensation Cost](index=15&type=section&id=Share-based%20payment%20compensation%20cost) Q1 2022 share-based compensation costs were $2.1 million, with $17.8 million of unrecognized cost remaining, to be recognized over 2.2 years Share-Based Compensation Cost Summary | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | | Share-based payment compensation costs | $2,062 | $2,957 | - As of March 31, 2022, **$17.8 million** of unrecognized share-based payment award compensation cost related to unvested options, RSUs, and PSUs is expected to be recognized over a weighted average period of **2.2 years**[69](index=69&type=chunk) [Note 11. Revenue](index=16&type=section&id=Note%2011.%20Revenue) Q1 2022 total net revenue decreased by 2.7% to $19.33 million, driven by declines in ANNOVERA and prescription vitamin sales, partially offset by BIJUVA international sales Revenue Breakdown | Revenue Category | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | YoY Change (%) | | :-------------------- | :------------------------------------------ | :------------------------------------------ | :------------- | | ANNOVERA | $8,510 | $8,750 | -2.7% | | IMVEXXY | $6,969 | $7,012 | -0.6% | | BIJUVA | $2,560 | $2,445 | 4.7% | | Prescription vitamin | $875 | $1,425 | -38.6% | | Product revenue, net | $18,914 | $19,632 | -3.7% | | License and service | $419 | $234 | 78.2% | | Total revenue, net | $19,333 | $19,866 | -2.7% | - BIJUVA sales for Q1 2022 included **$0.7 million** from the Theramex License Agreement, which started in Q3 2021[71](index=71&type=chunk) No IMVEXXY sales have been made through licensing agreements as of March 31, 2022[71](index=71&type=chunk) [Note 12. Income Taxes](index=16&type=section&id=Note%2012.%20Income%20taxes) No income tax provision was recorded for Q1 2022 due to net losses and NOL carryforwards, with a full valuation allowance maintained for deferred tax assets - No significant federal or state income taxes are expected due to recorded losses and net operating loss carryforwards[72](index=72&type=chunk) - A full valuation allowance is maintained for all deferred tax assets as of March 31, 2022, and December 31, 2021[73](index=73&type=chunk) [Note 13. Loss Per Common Share](index=16&type=section&id=Note%2013.%20Loss%20per%20common%20share) Basic and diluted loss per common share for Q1 2022 was $(5.69), with potentially dilutive securities deemed anti-dilutive due to net losses Loss Per Common Share Summary | Metric | Three Months Ended March 31, 2022 (in thousands, except per share) | Three Months Ended March 31, 2021 (in thousands, except per share) | | :-------------------------------- | :-------------------------------------------------- | :-------------------------------------------------- | | Net loss | $(49,021) | $(39,383) | | Weighted average common shares, basic and diluted | 8,614 | 6,945 | | Loss per common share, basic and diluted | $(5.69) | $(5.67) | - Potentially dilutive securities (stock options, RSUs, PSUs, warrants) were deemed anti-dilutive due to the net loss, thus not impacting diluted EPS calculation[74](index=74&type=chunk) [Note 14. Related Parties](index=17&type=section&id=Note%2014.%20Related%20parties) Catalent and AIG ceased to be related parties in December 2021 and May 2021, respectively, following changes in board and executive roles - Catalent, Inc. ceased to be a related party in December 2021 following the resignation of J. Martin Carroll from the company's Board[76](index=76&type=chunk) - American International Group, Inc. (AIG) ceased to be a related party in May 2021 after Karen L. Ling's executive role at AIG ended[77](index=77&type=chunk) [Note 15. Business Concentrations](index=17&type=section&id=Note%2015.%20Business%20concentrations) Product revenue, accounts receivable, and product purchases show significant concentration among a few key customers and vendors in Q1 2022 Business Concentration Metrics | Customer | Q1 2022 Product Revenue (%) | Q1 2021 Product Revenue (%) | | :--------- | :-------------------------- | :-------------------------- | | Customer A | 11% | 13% | | Customer B | 18% | 18% | | Customer C | 17% | 22% | | Customer F | 14% | <10% | Business Concentration Metrics | Customer | March 31, 2022 Accounts Receivable (%) | December 31, 2021 Accounts Receivable (%) | | :--------- | :------------------------------------- | :---------------------------------------- | | Customer B | 21% | 21% | | Customer C | 34% | 35% | | Customer D | <10% | 11% | | Customer F | 16% | <10% | Business Concentration Metrics | Vendor | Q1 2022 Product Purchases (%) | Q1 2021 Product Purchases (%) | | :------- | :-------------------------- | :-------------------------- | | Catalent | 28% | 29% | | Vendor A | 39% | 33% | | Vendor B | 27% | 32% | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management discusses Q1 2022 financial performance, condition, and liquidity, highlighting the vitaCare divestiture, COVID-19 impact, and going concern status [Forward-Looking Statements](index=18&type=section&id=Forward-looking%20statements) This section contains forward-looking statements regarding operations and financial position, subject to substantial risks and uncertainties, and actual results may differ materially - The report contains forward-looking statements about operations, financial position, debt, liquidity, business strategy, and product development, identified by words like 'intend,' 'anticipate,' 'believe,' 'expect,' etc[81](index=81&type=chunk) - These statements are based on current expectations but are subject to known and unknown risks and uncertainties, including liquidity requirements, supply chain issues, and market factors, and actual results may differ materially[82](index=82&type=chunk)[83](index=83&type=chunk) [Business Overview](index=18&type=section&id=Business%20overview) TherapeuticsMD is a women's healthcare company focused on developing and commercializing innovative products for women's health, including hormone therapy and prenatal vitamins - TherapeuticsMD is a women's healthcare company focused on creating and commercializing innovative products for women's lifespan, from pregnancy prevention through menopause[84](index=84&type=chunk) - The product portfolio includes a patient-controlled contraceptive, advanced hormone therapy pharmaceutical products (IMVEXXY, BIJUVA, ANNOVERA), and branded/generic prescription prenatal vitamins (vitaMedMD, BocaGreenMD)[84](index=84&type=chunk)[96](index=96&type=chunk) [vitaCare Divestiture](index=19&type=section&id=vitaCare%20Divestiture) TherapeuticsMD completed the vitaCare divestiture on April 14, 2022, receiving $150.0 million cash and entering into long-term service agreements - The divestiture of vitaCare Prescription Services, Inc. was completed on April 14, 2022, yielding a **$150.0 million** cash payment and potential for up to **$7.0 million** in earn-out consideration through 2023[85](index=85&type=chunk) - Post-divestiture, TherapeuticsMD entered into a long-term services agreement to continue using the vitaCare platform for its products and a transition services agreement for up to **12 months**[86](index=86&type=chunk) [COVID-19](index=19&type=section&id=COVID-19) The COVID-19 pandemic continues to pose significant uncertainties and risks, leading TherapeuticsMD to implement virtual options and cost-saving measures, with uncertain future impacts - The COVID-19 pandemic continues to pose highly uncertain and difficult-to-predict risks to the business, financial condition, liquidity, and results of operations[87](index=87&type=chunk)[90](index=90&type=chunk) - The company has adopted virtual business continuity options, partnered with online pharmacies and telemedicine providers, and implemented cost-saving measures such as reduced marketing expenses, hiring restrictions, and delayed IT projects[88](index=88&type=chunk)[89](index=89&type=chunk) - Future impacts depend on pandemic duration, social distancing orders, sales force access to healthcare providers, unemployment rates affecting insurance coverage, and global supply chain disruptions[91](index=91&type=chunk) [Going Concern](index=19&type=section&id=Going%20concern) A Q1 2022 net loss of $49.0 million and $180.4 million current liability deficit raise substantial doubt about going concern, prompting pursuit of financing alternatives - Incurred a net loss of **$49.0 million** in Q1 2022, with current liabilities exceeding current assets by **$180.4 million**, and total liabilities exceeding total assets by **$140.6 million**, indicating substantial doubt about the company's ability to continue as a going concern[92](index=92&type=chunk) - The company needs to raise additional capital to repay the Financing Agreement, which matures on June 1, 2022, and to fund losses until operations become cash flow positive[92](index=92&type=chunk) - Financing alternatives include private placements of equity/equity-linked instruments or public offerings, but these may dilute existing stockholders and are subject to market conditions and authorized share limits[93](index=93&type=chunk) [Product Portfolio](index=20&type=section&id=Product%20portfolio) TherapeuticsMD commercializes IMVEXXY, BIJUVA, ANNOVERA, and prenatal vitamins, with ANNOVERA facing manufacturing challenges and BIJUVA seeing international sales [ANNOVERA (segesterone acetate ("SA") and ethinyl estradiol ("EE") vaginal system)](index=20&type=section&id=ANNOVERA%20(segesterone%20acetate%20(%22SA%22)%20and%20ethinyl%20estradiol%20(%22EE%22)%20vaginal%20system)) ANNOVERA, a one-year contraceptive, faces manufacturing difficulties and supply interruptions, with the company seeking FDA approval for modified testing specifications by Q2 2022 - ANNOVERA is the first and only patient-controlled, one-year contraceptive vaginal system, commercially sold in the U.S. under the Population Council License Agreement[97](index=97&type=chunk) - The company is experiencing manufacturing difficulties and intermittent supply interruptions for ANNOVERA, leading to a supplemental NDA filing in August 2021 to modify testing specifications[98](index=98&type=chunk) A response from the FDA is expected by the end of Q2 2022[98](index=98&type=chunk) - Measures to mitigate challenges include ramping up manufacturing, adding resources, increasing yield per batch, and automating processes, but supply shortfalls could adversely affect business[98](index=98&type=chunk) [IMVEXXY (estradiol vaginal inserts), 4-μg and 10-μg](index=21&type=section&id=IMVEXXY%20(estradiol%20vaginal%20inserts)%2C%204-%CE%BCg%20and%2010-%CE%BCg) IMVEXXY treats menopausal dyspareunia, is marketed in the U.S. and licensed internationally, with a post-approval study on endometrial cancer risk underway - IMVEXXY is a pharmaceutical product for treating moderate-to-severe dyspareunia (vaginal pain) due to menopause[99](index=99&type=chunk) - The company is conducting a post-approval observational study to assess the risk of endometrial cancer in post-menopausal women using low-dose vaginal estrogen unopposed by progestogen[99](index=99&type=chunk) - IMVEXXY is marketed in the U.S. and licensed to Knight Therapeutics (Canada and Israel) and Theramex HQ UK Limited (outside U.S., except Canada and Israel), but no IMVEXXY sales have been made through these licensing agreements as of March 31, 2022[100](index=100&type=chunk) [BIJUVA (estradiol and progesterone) capsules, 1 mg/100 mg](index=21&type=section&id=BIJUVA%20(estradiol%20and%20progesterone)%20capsules%2C%201%20mg%2F100%20mg) BIJUVA, an FDA-approved bioidentical hormone therapy, is marketed in the U.S. and licensed internationally, with $0.7 million in Q1 2022 international sales - BIJUVA is the first and only FDA-approved bioidentical hormone therapy combining estradiol and progesterone in a single oral capsule for moderate-to-severe vasomotor symptoms in menopausal women with a uterus[101](index=101&type=chunk) - BIJUVA is marketed in the U.S. and licensed to Knight Therapeutics (Canada and Israel) and Theramex HQ UK Limited (outside U.S., except Canada and Israel)[101](index=101&type=chunk) Sales through the Theramex License Agreement started in Q1 2022, contributing **$0.7 million**[101](index=101&type=chunk) [Prenatal Vitamin Products](index=21&type=section&id=Prenatal%20vitamin%20products) The company manufactures and distributes prescription prenatal vitamin product lines under the vitaMedMD and BocaGreenMD Prena1 brands - The company manufactures and distributes prescription prenatal vitamin product lines under the vitaMedMD brand and authorized generic formulations under BocaGreenMD Prena1[102](index=102&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20operations) Q1 2022 saw a 2.7% revenue decrease to $19.3 million, a 4.7% gross profit decrease, and an 8.4% operating expense reduction, but a $49.0 million net loss due to higher other expenses [Three Months Ended March 31, 2022 Compared with Three Months Ended March 31, 2021](index=21&type=section&id=Three%20months%20ended%20March%2031%2C%202022%20compared%20with%20three%20months%20ended%20March%2031%2C%202021) This section compares Q1 2022 and Q1 2021 financial performance, highlighting revenue decline, reduced operating expenses, increased non-operating expenses, and a larger net loss [Revenue](index=21&type=section&id=Revenue) Q1 2022 total net revenue decreased by 2.7% to $19.3 million, driven by declines in ANNOVERA and prescription vitamin sales, partially offset by BIJUVA international sales Revenue Performance | Product Revenue | Q1 2022 (in thousands) | Q1 2021 (in thousands) | YoY Change (%) | | :-------------------- | :--------------------- | :--------------------- | :------------- | | ANNOVERA | $8,510 | $8,750 | -2.7% | | IMVEXXY | $6,969 | $7,012 | -0.6% | | BIJUVA | $2,560 | $2,445 | 4.7% | | Prescription vitamin | $875 | $1,425 | -38.6% | | Product revenue, net | $18,914 | $19,632 | -3.7% | | License and service revenue | $419 | $234 | 78.2% | | Total Revenue, net | $19,333 | $19,866 | -2.7% | - ANNOVERA sales decreased by **2.7%** due to a **1.5%** decrease in sales volume and a **1.3%** decrease in average sale price[103](index=103&type=chunk) - BIJUVA sales increased **4.7%** overall, but excluding **$0.7 million** from the Theramex License Agreement, domestic BIJUVA sales decreased by **23.7%** due to a **19.4%** decrease in sales volume and a **5.3%** decrease in average sale price[105](index=105&type=chunk)[106](index=106&type=chunk) - Prescription vitamin sales decreased by **38.6%** due to a **35.1%** decrease in sales volume and a **5.4%** decrease in average sale price[108](index=108&type=chunk) [Gross Profit](index=22&type=section&id=Gross%20profit) Q1 2022 total gross profit decreased by 4.7% to $14.5 million, with product gross margin at 74.3%, impacted by BIJUVA export sales at cost Gross Profit Performance | Gross Profit Category | Q1 2022 (in thousands) | Q1 2021 (in thousands) | YoY Change (%) | | :-------------------- | :--------------------- | :--------------------- | :------------- | | Product | $14,054 | $14,945 | -5.9% | | License and service | $419 | $234 | 78.2% | | Total Gross Profit | $14,473 | $15,179 | -4.7% | - Product gross margin decreased by **1.8%** to **74.3%** in Q1 2022[110](index=110&type=chunk) Excluding **$0.7 million** of BIJUVA export sales (sold at cost), product gross margins would have increased by **1.0%** to **77.1%**[110](index=110&type=chunk) [Operating Expenses](index=22&type=section&id=Operating%20expenses) Q1 2022 total operating expenses decreased by 8.4% to $40.7 million, driven by lower selling and marketing, partially offset by higher G&A, with R&D also decreasing Operating Expenses Breakdown | Operating Expense Category | Q1 2022 (in thousands) | Q1 2021 (in thousands) | YoY Change (%) | | :------------------------- | :--------------------- | :--------------------- | :------------- | | Selling and marketing | $18,895 | $24,024 | -21.3% | | General and administrative | $20,407 | $18,383 | 11.0% | | Research and development | $1,400 | $2,050 | -31.7% | | Total Operating Expenses | $40,702 | $44,457 | -8.4% | - Selling and marketing costs decreased by **$5.1 million**, primarily due to **$6.1 million** in lower advertising and marketing costs, partially offset by **$1.0 million** in higher costs for a national sales and marketing event[111](index=111&type=chunk) - General and administrative costs increased by **$2.0 million**, mainly due to **$1.2 million** in higher compensation and employee benefits (including executive retention bonuses) and **$1.9 million** in higher professional fees, partially offset by **$1.0 million** in lower IT expenditures[112](index=112&type=chunk) - R&D costs decreased by **$0.7 million**, primarily from **$0.4 million** in lower compensation and employee benefits and **$0.2 million** in lower lab research costs, reflecting a refocus on commercialization[113](index=113&type=chunk) [Loss from Operations](index=23&type=section&id=Loss%20from%20operations) Q1 2022 loss from operations decreased by 10.4% to $26.2 million due to lower operating expenses, with continued operating losses anticipated Loss from Operations Summary | Metric | Q1 2022 (in thousands) | Q1 2021 (in thousands) | YoY Change (%) | | :----------------- | :--------------------- | :--------------------- | :------------- | | Loss from operations | $(26,229) | $(29,278) | -10.4% | - The decrease in loss from operations was attributable to **$3.8 million** in lower operating expenses, partially offset by **$0.7 million** in lower gross profit[115](index=115&type=chunk) [Other Expense, Net](index=23&type=section&id=Other%20expense%2C%20net) Q1 2022 non-operating expenses increased by 125.6% to $22.8 million, primarily due to an $8.4 million debt extinguishment loss and higher financing costs Other Expense Summary | Metric | Q1 2022 (in thousands) | Q1 2021 (in thousands) | YoY Change (%) | | :-------------------- | :--------------------- | :--------------------- | :------------- | | Total other expense, net | $(22,792) | $(10,105) | 125.6% | - The increase was primarily due to an **$8.4 million** loss on extinguishment of debt and **$7.8 million** in higher amortization of deferred financing costs related to Amendment No. 9 to the Financing Agreement[116](index=116&type=chunk) - Partially offset by **$2.5 million** in lower interest prepayment fees due to the elimination of prepayment fees with Amendment No. 9[116](index=116&type=chunk) [Net Loss](index=23&type=section&id=Net%20Loss) Q1 2022 net loss increased to $49.0 million, or $(5.69) per share, reflecting higher other expenses despite reduced operating losses Net Loss Summary | Metric | Q1 2022 (in thousands, except per share) | Q1 2021 (in thousands, except per share) | YoY Change (%) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------- | | Net Loss | $(49,021) | $(39,383) | 24.5% | | Loss per common share, basic and diluted | $(5.69) | $(5.67) | 0.4% | [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20capital%20resources) As of March 31, 2022, cash was $30.4 million; vitaCare divestiture proceeds were used for debt, but going concern issues persist, requiring additional financing [Cash Flows](index=23&type=section&id=Cash%20flows) Q1 2022 net cash used in operating activities decreased to $29.5 million, but financing activities shifted to a $5.0 million outflow, resulting in a net cash decrease Cash Flow Performance | Cash Flow Category | Q1 2022 (in thousands) | Q1 2021 (in thousands) | YoY Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :------------- | | Net cash used in operating activities | $(29,526) | $(38,380) | -23.1% | | Net cash used in investing activities | $(212) | $(438) | -51.6% | | Net cash (used in) provided by financing activities | $(5,000) | $95,949 | -105.2% | | Net (decrease) increase in cash | $(34,738) | $57,131 | -160.8% | - The decrease in net cash used in operating activities was primarily due to a **$14.7 million** increase in non-cash expenditure adjustments and a **$3.8 million** increase in cash from changes in operating assets and liabilities, partially offset by a **$9.6 million** increase in net loss[122](index=122&type=chunk) - The shift in financing activities was primarily related to the absence of **$150.9 million** in net proceeds from common stock sales in 2021, partially offset by a **$45.0 million** decrease in debt repayment and a **$5.0 million** payment of debt financing fees in 2021[124](index=124&type=chunk) [Other Liquidity Measures](index=24&type=section&id=Other%20liquidity%20measures) Net DSO increased to 151 days by March 31, 2022, reflecting longer payment terms, with $225.0 million in term loans outstanding under the Financing Agreement Other Liquidity Metrics | Metric | March 31, 2022 | December 31, 2021 | March 31, 2021 | | :---------- | :------------- | :---------------- | :------------- | | Net DSO | 151 days | 148 days | 141 days | | Gross DSO | 73 days | 72 days | 62 days | - DSOs fluctuate due to factors including longer payment terms for ANNOVERA, IMVEXXY, and BIJUVA commercialization, and changes in the healthcare industry[126](index=126&type=chunk) - Term loans outstanding under the Financing Agreement were **$225.0 million** as of March 31, 2022, up from **$200.0 million** at December 31, 2021[128](index=128&type=chunk) [Contractual Obligations, Off-Balance Sheet Arrangements and Purchase Commitments and Employment Agreements](index=24&type=section&id=Contractual%20obligations%2C%20off-balance%20sheet%20arrangements%20and%20purchase%20commitments%20and%20employment%20agreements) No material changes to contractual obligations, off-balance sheet arrangements, and purchase commitments occurred, except for Amendment No. 9 to the Financing Agreement - No material changes to contractual obligations, off-balance sheet arrangements, and purchase commitments from December 31, 2021, to March 31, 2022, other than Amendment No. 9 to the Financing Agreement[129](index=129&type=chunk) [Critical Accounting Policies and Estimates](index=24&type=section&id=Critical%20accounting%20policies%20and%20estimates) Financial statements adhere to U.S. GAAP, requiring management estimates, with critical accounting policies consistent with the 2021 10-K Report - The consolidated financial statements are prepared in accordance with U.S. GAAP, requiring estimates and assumptions that affect reported amounts[130](index=130&type=chunk) - Critical accounting policies and estimates remain consistent with those disclosed in the 2021 10-K Report[130](index=130&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) As a 'smaller reporting company,' TherapeuticsMD is not required to provide quantitative and qualitative disclosures about market risk - As a 'smaller reporting company,' TherapeuticsMD is not required to provide quantitative and qualitative disclosures about market risk[131](index=131&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2022, with no material changes in internal controls over financial reporting during the quarter [Management's Evaluation of Disclosure Controls and Procedures](index=24&type=section&id=Management%27s%20evaluation%20of%20disclosure%20controls%20and%20procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2022, providing reasonable assurance for timely and accurate reporting, despite inherent limitations - Disclosure controls and procedures are designed to ensure information required by the Exchange Act is recorded, processed, summarized, and reported timely and accurately[132](index=132&type=chunk) - Management, including the CEO and Interim CFO, concluded that disclosure controls and procedures were effective as of March 31, 2022, providing reasonable assurance[133](index=133&type=chunk) - A control system provides only reasonable, not absolute, assurance, and may not prevent all error and fraud due to inherent limitations and resource constraints[134](index=134&type=chunk) [Changes in Internal Controls Over Financial Reporting](index=25&type=section&id=Changes%20in%20internal%20controls%20over%20financing%20reporting) No material changes in internal control over financial reporting occurred during the three months ended March 31, 2022 - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2022[135](index=135&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20proceedings) The company is involved in routine litigation, with no material effect on business or financial condition beyond Note 9 disclosures - The company is involved in ordinary course litigation, but no legal proceedings are expected to have a material effect on its business or financial condition, beyond those disclosed in Note 9[136](index=136&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20factors) The company's business, financial condition, and operating results are subject to various risk factors, with no material changes since the 2021 10-K Report, except as noted - The company's business, financial condition, and operating results are subject to various known and unknown factors, as described in Part I, Item 1A of the 2021 10-K Report[137](index=137&type=chunk) - No material changes to the company's risk factors have occurred since the 2021 10-K Report, except as explicitly set forth in this 10-Q[137](index=137&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) No unregistered sales of equity securities or use of proceeds to report for the period - None[138](index=138&type=chunk) [Item 3. Defaults Upon Senior Securities](index=25&type=section&id=Item%203.%20Defaults%20upon%20senior%20securities) No defaults upon senior securities to report for the period - None[138](index=138&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20safety%20disclosures) No mine safety disclosures to report for the period - None[138](index=138&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20information) No other information to report for the period - None[139](index=139&type=chunk) [Item 6. Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the 10-Q report, including the vitaCare Stock Purchase Agreement, Financing Agreement amendments, and CEO/CFO certifications - Key exhibits include the Stock Purchase Agreement for vitaCare (Exhibit **2.1**), Amendment No. **9** to the Financing Agreement (Exhibit **10.2**), and certifications from the Chief Executive Officer and Chief Financial Officer (Exhibits **31.1**, **31.2**, **32.1**, **32.2**)[140](index=140&type=chunk)[141](index=141&type=chunk) [Signatures](index=27&type=section&id=Signatures) The report was signed by Hugh O'Dowd, CEO, and Michael C. Donegan, Interim CFO and Chief Accounting Officer, on May 16, 2022 - The report was signed by Hugh O'Dowd, Chief Executive Officer, and Michael C. Donegan, Interim Chief Financial Officer, Chief Accounting Officer and Vice President Finance, on May 16, 2022[144](index=144&type=chunk) ```

Financial Performance and Market Trends - The company received a cash payment of $150.0 million from the sale of vitaCare, with potential additional earn-out consideration of up to $7.0 million based on vitaCare's financial performance through 2023[21]. - The global market for women's health therapeutics is projected to grow from $31.5 billion in 2019 to $41.2 billion by 2025, at a CAGR of 4.7%[42]. - The U.S. contraceptive market size is expected to reach $9.9 billion by 2027, expanding at a CAGR of 4.3% from 2020 to 2027[45]. - In 2021, the FDA-approved prescription market in the U.S. for contraceptive products generated $5.4 billion in gross sales from over 69 million prescriptions[60]. - The menopause market is projected to grow from $5.7 billion in 2019 to $7.7 billion by 2025 at a CAGR of 5.4%[42]. Product Development and FDA Approvals - The FDA-approved product IMVEXXY was launched in July 2018 for the treatment of moderate-to-severe dyspareunia, with the product approved by the FDA in May 2018[23]. - The FDA-approved product BIJUVA was launched in April 2019 for the treatment of moderate-to-severe vasomotor symptoms, with the product approved by the FDA in October 2018[23]. - The FDA approved the supplemental NDA for the 0.5 mg/100 mg dose of BIJUVA in December 2021[69]. - IMVEXXY demonstrated efficacy as early as two weeks in clinical studies, maintaining efficacy through week 12[61]. - The FDA has required a post-approval observational study for ANNOVERA to measure the risk of venous thromboembolism[54]. Sales and Marketing Strategies - The company has established relationships with some of the largest OB/GYN practices, leveraging these connections to increase sales of its products[32]. - The company utilizes a national sales force to market its products primarily in the OB/GYN market, enhancing customer experience and access to care[31]. - The company aims to penetrate the compounding market with FDA-approved products, positioning BIJUVA as a proven alternative to non-FDA approved compounded hormone therapy products[38]. - The company has established patient affordability programs to support access to its products[83]. - The company aims for 100% customer satisfaction, maintaining a fully staffed customer care center to enhance customer relationships and facilitate repeat purchases[110]. Revenue Contributions and Product Performance - For 2021, 44.2% of the consolidated product revenue was generated by ANNOVERA, while IMVEXXY contributed 36.8%[60][64]. - BIJUVA generated 12.3% of consolidated product revenue in 2021, up from 10.1% in 2020 and 5.4% in 2019[72]. - The prenatal vitamin products contributed 6.7% of consolidated product revenue in 2021[75]. - The total FDA-approved prescription market for estrogen and progestin products in the U.S. generated $2.1 billion in gross sales from 23.5 million prescriptions in 2021[68]. Regulatory Compliance and Challenges - The company is required to report adverse reactions and production problems to the FDA as part of its post-approval regulation compliance[129]. - The company’s contract manufacturer, Catalent, received a Form FDA 483 in 2019, indicating that objectionable conditions were found but no regulatory action was recommended[132]. - The company relies on third parties for the production of clinical and commercial quantities of its drugs and drug candidates, which may face compliance issues from future FDA inspections[133]. - The FDA has broad authority to enforce federal law applicable to dietary supplements, including the ability to issue public warnings and request recalls of unsafe products[152]. - The company must comply with federal and state healthcare laws, including the Anti-Kickback Statute and the False Claims Act, which impose significant penalties for non-compliance[155]. Strategic Partnerships and Licensing - The company has entered into license agreements with strategic partners to commercialize its products outside of the U.S.[20]. - Theramex paid an upfront fee of EUR 14 million (approximately $15.5 million) for the license agreement related to BIJUVA and IMVEXXY[93]. - The company is eligible for additional sales milestone payments up to EUR 27.5 million based on annual net sales milestones of BIJUVA and IMVEXXY outside the U.S.[95]. - The Population Council received a total of $40.0 million in milestone payments related to ANNOVERA, with additional payments contingent on cumulative net sales milestones of $200.0 million, $400.0 million, and $1.0 billion[86]. Human Capital and Workforce Management - As of December 31, 2021, the company had 416 employees, with a focus on maintaining a good relationship with its workforce and no collective bargaining agreements in place[165]. - The company has implemented a human capital strategy focused on attracting talent, engaging the workforce, developing leaders, and promoting its culture, earning recognition as a "Top Workplace" in 2020[164]. - The company has a sales force primarily composed of employees, with limited contract sales agents, focusing on key markets such as 340B entities and the Department of Defense[165]. Market Competition and Intellectual Property - The company received a Paragraph IV certification notice letter from Teva Pharmaceuticals regarding an ANDA submission, indicating potential competition for its products[142]. - The company entered into a settlement agreement with Amneal Pharmaceuticals to resolve patent litigation, allowing Amneal to market a generic version of BIJUVA starting in May 2032[144]. - The company has 46 issued domestic patents and 47 issued foreign patents as of December 31, 2021, with 86 pending patent applications[116]. - The company holds multiple U.S. trademark registrations and has numerous pending trademark applications, which are valuable for marketing its products[119].

TherapeuticsMD® For Her. For Life. | --- | --- | --- | --- | |-------|-------------------------------------------------------|------------------------|-------| | | | | | | | Building the Premier Q4 2021 Earnings March 10, 2022 | Women's Health Company | | | | FOR INVESTOR PRESENTATION PURPOSES ONLY. | | | Forward-Looking Statements This press release by TherapeuticsMD, Inc. may contain forward-looking statements. Forward-looking statements may include, but are not limited to, statements relating to Therapeu ...

TherapeuticsMD, Inc. (NASDAQ:TXMD) Q4 2021 Earnings Conference Call March 10, 2022 8:30 AM ET Company Participants Lisa Wilson - Investor Relations Hugh O’Dowd - Chief Executive Officer James D’Arecca - Chief Financial Officer Mark Glickman - Chief Business Officer Conference Call Participants Louise Chen - Cantor Fitzgerald Douglas Tsao - H.C. Wainwright Disclaimer*: This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are desi ...