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Posted by James Tannahill

On 06/17/19 [10:29], RumorHound platform alerted a potential takeover of TherapeuticsMD (NasdaqGSM: TXMD; 2.61). Rumor is substantiated by 8 sources; 1 of which has a four-star reliability score, 3 with three-star scores, and an average source popularity ~2.0 (see image below). TXMD is a commercial-stage women’s healthcare company that offers a bio-identical hormone platform to treat menopause-related hormone deficiencies. The platform contains estradiol and progesterone alone or in combination and are designed to provide equivalent efficacy to competing products at lower doses, thus enabling enhanced safety and side effect profiles relative to custom compounded products.

 

TXMD shares were down slightly on missed guidance, but there is a bigger picture according to our analyst who attended TXMD’s KOL talk on June 10th.

 

The Company’s product portfolio includes Imvexxy (lead) for tx of vulvovaginal atrophy (VVA) with dyspareunia, which gained approval and launch activities ongoing (particularly retaining an attractive clinical efficacy/safety profile over its peers). Bijuva for vasomotor symptoms (VMS) in postmenopausal women also recently launched in April 2019, with a novel mechanism 1-year contraceptive system set to launch 3Q19. The current share price does not capture the program value on both a base and worst case scenario with three, unique, tailored, and FDA approved therapies launching into three enormous and underserved markets.

 

For Imvexxy, coverage should continue to increase throughout 2019 as commercial adjudications are finalized. Conversely, net price remains depressed due to the large portion of Medicare Part D patients; full Imvexxy reimbursement will start after Medicare contracting 4Q19 and adjudication 1Q20. As Part D can receive NO co-pay assistance, TXMD is negotiating preferred status on these formularies to maintain co-pay between $30-47/Rx.

 

TXMD has mediocre interim financials, in-line with a pre-revenue biotech company. Key measures are enterprise value of $543.1M, EDITDA of $(143.3)M, $77.4M short and LT debt, and a shareholder composition that is highly institutional (80% of outstanding). Importantly, TXMD may see positive free cash flows in 2021, which could be in the range of $85-90M followed by FCF of $270M+ and $640M+ in 2022 and 2023, respectively. Importantly, the recent restructuring of its debt facility provides TXMD with flexibility to launch its three products simultaneously. TXMD drew down $200M (partly applied to pay down a prior facility) with $50M expected before year end (Annovera classification as a vaginal system) and another $50M expected in 1Q with $11M in collective 4Q19 sales of their product trio - Imvexxy/Bijuva/Annovera. The Company expects this could yield largely to 2020 when TXMD will have full reimbursement across its portfolio.

 

TheraputicsMD-Rumor-hound

 

About TherapeuticsMD, Inc.

TherapeuticsMD, Inc. is an innovative, leading healthcare company, focused on developing and commercializing novel products exclusively for women. Our products are designed to address the unique changes and challenges women experience through the various stages of their lives with a therapeutic focus in family planning, reproductive health, and menopause management. The company is committed to advancing the health of women and championing awareness of their healthcare issues. To learn more about TherapeuticsMD, please visit www.therapeuticsmd.com or follow us on Twitter: @TherapeuticsMD and on Facebook: TherapeuticsMD.


Topics: Rumor Hound