AGRX - Women’s Healthcare Company Agile Therapeutics Says It Believes It Has An Effective Business Plan In Place For Growth And Generating Positive Cash Flow
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Agile TherapeuticsInc. (NASDAQ: AGRX) is on a journey to fulfill the unmet healthneeds of women with products designed to provide them withcontraceptive options.
The company’s product and product candidates are designed toprovide women with contraceptive options that offer freedom fromtaking a daily pill without committing to a longer-actingmethod.
Twirla®
Agile ’s initialproduct Twirla® (levonorgestrel and ethinyl estradiol) transdermal system, is anondaily prescription contraceptive based on the company’sproprietary transdermal patch technology called Skinfusion®, which isdesigned to allow drug delivery through the skin.
The Twirla transdermalsystem is a once-weekly combined hormonal contraceptive (CHC) patchthat contains the active ingredients levonorgestrel (LNG), a type ofprogestin, and ethinyl estradiol (EE), a type of estrogen.
The patch is used as acontraceptive by women with a body mass index (BMI) less than 30kilograms per meter (kg/m2) for whom a combined hormonal contraceptiveis appropriate. It is less effective in women with a BMI of 25 ormore.
Q3 Financial Results And Corporate Update
On Nov. 7, Agile released financial results for the three months that ended Sept. 30 andprovided a corporate update.
Financial ResultsHighlights:
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Net revenue: Twirladelivered $3.0 million in net revenue for the third quarter of 2022.This was an increase of 43% from the second quarter of 2022 – thelargest quarter-over-quarter increase the Company hasachieved.
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Cost of productrevenue: Cost of product revenue totaled $1.4 million andconsisted of direct and indirect costs related to the manufacturing ofTwirla® sold, compared to $2.7 million for the third quarter of 2021– a decrease of 47%. The decrease reflects the elimination of aninventory obsolescence reserve, which the company established in thethird quarter of 2021.
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Total generally accepted accounting principles (GAAP)operating expenses: Total GAAP operating expenses were $20.3million for the quarter that ended Sept. 30, compared to $14.4 millionfor the comparable period in 2021 — an increase of 41%. The GAAPoperating expenses for the third quarter of 2022 represent an increaseof 80% from the $11.3 million of GAAP operating expenses reported forthe second quarter of 2022.
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Total non-GAAP operating expenses: Total non-GAAPoperational expenditures were $9.2 million for the quarter that endedSept. 30, compared to $14.4 million for the comparable period in 2021— a decrease of 36%. The non-GAAP operating expenses for the thirdquarter decreased 19% from the $11.3 million non-GAAP operatingexpenses reported for the second quarter of 2022. Thecompany had a one-time, non-cash charge associated with the transferof equipment to Corium in the third quarter and believes the non-GAAPoperating expense, which excludes this charge from GAAP operatingexpenses, presents a more useful comparison of the results from itsoperations because prior periods did not include a similar charge. Thecompany provided a reconciliation of its GAAP operating expensesversus non-GAAP operating expenses in its pressrelease.
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Cash: As ofSept. 30, the company had $6.1 million of cash, compared to $13million of cash and cash equivalents as of the end of the secondquarter of 2022.
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Netloss: Net loss was $19.7 million, or 53 cents per share for thequarter that ended Sept. 30, compared to a net loss of $16.8 million,or $7.20 per share, for the comparable period in 2021. The companyincurred a one-time, noncash operating expense charge of $11.1 millionin the third quarter of 2022 related to the transfer of equipmentownership to Corium Inc., which is reflected in the net loss for thethird quarter of 2022.
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Shares outstanding: As of Sept. 30, Agilehad 39,026,823 shares issued and 36,997,836 weighted average shares ofcommon stock outstanding.
Key Contributors ToFuture Growth
Although the company reported a net loss for the quarter due toreasons that included extraordinary ones, it says it has an effectivebusiness plan in place and is tracking towards its goal of generatingpositive cash flow.
An important contributor to the company’s third-quartergrowth was its partnership with Afaxys Inc., which drove volume in thenonretail channel. In the second quarter of 2022, 1,404 nonretailcycles of Twirla®were purchased, and that number surged 361% in thethird quarter to 6,479 nonretail cycles.
“This growth is the product of the effortsbeing made by Afaxys to penetrate the Planned Parenthood network. Inthe third quarter, we began to see the conversion of PlannedParenthood accounts in California, which drove significant sales andgrowth for the quarter. We believe this represents a sustainablecustomer base for future periods,” Agile Therapeutics ChiefCommercial Officer Amy Welsh said.
She added that by focusing on five key states —California, Texas, Florida, Illinois, and New York — “It isestimated that we can reach 45% of U.S. women between the ages of 18and 24. In the future, we expect the retail channel to continue togrow.”
Additionally, Agile plans to launch its collaboration withfemale telehealth leader Nurx in the fourth quarter of 2022 andexpects the collaboration to begin to contribute to retail channelgrowth in 2023. Nurx is a leader in female-focused digital healthcareamongst the Twirla target audience and offers patients access to itstelehealth platform and expert medical providers that have prescribedcontraception to more than 1 million patients
GeneratingPositive Cash Flow
In an industry with players like Dare Bioscience Inc. (NASDAQ: DARE) and HologicInc. (NASDAQ: HOLX), Agile is exploring business developmentopportunities that could potentially accelerate the timeline forgenerating positive cash flow.
“Our stated plan has been to effectively manageexpenses while continuing to grow Twirla® sales and demand. This isthe third consecutive quarter we have increased Twirla® sales anddemand while simultaneously decreasing company operating expenses,excluding the noncash, one-time charge incurred this quarter,”Chairman and CEO and Director of Agile Therapeutics Chairman and CEOAlfred Altomari said.
“We are working — and have been working — to identify andimplement strategies and exploit opportunities that will contribute tofurther growth,” he added.
If Agile maintains its quarterly revenue growthrate and operating expenses consistent with the past two quarters, thecompany could potentially begin to generate positive cash flow at theend of 2023. The addition of a business development opportunity orpartnership could potentially accelerate that timeline.
Agile Therapeutics is a women's healthcare companydedicated to fulfilling the unmet health needs of today’s women. Ourproduct and product candidates are designed to provide women withcontraceptive options that offer freedom from taking a daily pill,without committing to a longer-acting method. Our initial product,Twirla®, (levonorgestrel and ethinyl estradiol), a transdermalsystem, is a non-daily prescription contraceptive. Twirla is based onour proprietary transdermal patch technology, called Skinfusion®,which is designed to allow drug delivery through theskin.
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Contact Details
MattRiley - Head of Investor Relations & CorporateCommunications
CompanyWebsite
https://agiletherapeutics.com/
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