- TherapeuticsMD said Wednesday it has received a loan worth up to $300 million from TPG Sixth Street Partners to aid in the launch of Bijuva, a combination pill for menopause-related hot flashes, and long-acting contraceptive ring Annovera. The Food and Drug Administration has approved both but the company has waited to launch them.
- Of the initial tranche of $200 million, TherapeuticsMD will need to use $75 million to repay current lender MidCap Financial Trust. Another $50 million tranche will be available if Annovera is designated as a new category of contraceptive to enable coverage, and the final $50 million depends on all three of the company's products reaching net revenues of $11 million in the fourth quarter of 2019.
- For Bijuva to succeed commercially, it will need to wrest market share from generic hormone pills and compounded combination pills. TherapeuticsMD says three large pharmacy benefit managers have already placed it on their formularies.
TherapeuticsMD decided against diluting its shareholders again in order to get Bijuva (estradiol and progesterone) and Annovera (segesterone acetate and ethinyl estradiol) off the ground.
The Florida-based women's health specialist instead landed a term loan due in 2024, paying interest at a rate of LIBOR, a benchmark commercial interest rate, plus 7.75%. With a LIBOR floor of 2.7% set in the terms, TherapeuticsMD will be paying at least 10.45%.
Principal payments will not be required until mid-2023. TherapeuticsMD CEO Robert Finizio touted the "flexibility" of the terms allowing it to achieve sales growth for two new products.
The FDA approved Bijuva in October 2018 and the company began shipping to distributors in early April. The new financing was the trigger for the beginning of formal promotions Wednesday.
Bijuva's rivals come in the form of FDA-approved bio-identical estradiol and progesterone pills taken separately as an off-label therapy, an FDA-approved biosynthetic pill, and non-approved bio-identical combination capsules prepared at compounding pharmacies. Together, these represent at least 19 million prescriptions, according to the company.
TherapeuticsMD 's strategy is to work with the compounding pharmacies, which represent the biggest share of prescriptions, to help them meet the demand for a bio-identical combination pill. By offering them the opportunity to distribute an FDA-approved product, TherapeuticsMD argues it can reduce their regulatory risk and the need to seek reimbursement from insurers.
The company has already tested this strategy with Imvexxy, a bioidentical estrogen vaginal therapy designed to prevent pain from sexual activity. The company had targeted 50 to 100 individual pharmacies in the first 12 months after launch, which took place in September 2018.
Meanwhile, three payers, Cigna's Express Scripts, Anthem and Aetna, have begun placing Bijuva on formularies, TherapeuticsMD said.
As for Annovera, the company is awaiting an FDA designation as a new category of contraceptive. This designation would require coverage under Affordable Care Act rules, and, because it is the only 13-cycle contraceptive ring, it would have the category all to itself. If that designation comes through, the next $50 million will be released.
Achieving $11 million in fourth quarter 2019 sales will release the final tranche of $50 million. Cantor Fitzgerald analyst Louise Chen forecast $9.9 million but said consensus is $15.5 million, making achievement of this milestone uncertain. TherapeuticsMD reported net revenue of $5.1 million in the fourth quarter of 2018 on Imvexxy sales alone.
TherapeuticsMD last did a share offering in August 2018, raising a total of $85 million between separate public and registered direct sales. Choosing to borrow money rather than sell more shares is likely pleasing to most of its investors, especially as its shares are 44% below their 12-month high reached in June 2018.
Correction: A previous version of this article misstated the interest rate TherapeuticsMD will pay.