- TherapeuticsMD recently updated investors on their IMVEXXY launch. The stock finally appears to have synced up with the fundamentals.
- I review IMVEXXY's launch thus far and highlight the key metrics investors need to keep an eye on for 2019.
- The charts are indicating a possible breakout as it approaches major moving average. I review the charts to decide whether to buy on this news or wait till the Q4 ER.
TherapeuticsMD (NASDAQ:TXMD) recently released an investor presentation with updated IMVEXXY launch metrics. The slide presentation contained vital information regarding the company's ongoing launch efforts. Not only was the data contained within the presentation encouraging, but the fact management continues to update investors regularly throughout the IMVEXXY launch is reassuring.
The stock appears to have fully recovered from the end of 2018 sell-off. Since my last TXMD article, the share price has moved up from the low $4.00 range and has found a new home in the $5.00-5.50 per share area. In addition, the stock has hurdled over the 50-day moving average ($4.57) and is now approaching the pivotal 200-day moving average ($5.65).
I believe that the positive change in the share price is more than just the resurgence in the overall market. The company's recent script reports and the technical setups on the charts are indicating a major move in the share price throughout 2019.
TherapeuticsMD is an advanced healthcare company specializing in developing and commercializing products entirely for women. TherapeuticsMD targets the challenges women experience throughout their lives, including family planning, reproductive health, and menopause management.
The company's portfolio includes products developed by TherapeuticsMD's SYMBODA technology. Applying this technology, TherapeuticsMD has developed hormone therapy ("HT") products to facilitate delivery of bioidentical hormones through a variety of dosage forms and administration methods. The company's comprehensive product portfolio (Figure 1) contains prenatal care supplements, ANNOVERA, BIJUVA, and IMVEXXY.
Figure 1: TXMD Portfolio (Source: TXMD)
IMVEXXY Launch Update
In May 2018, the FDA approved IMVEXXY for the treatment of moderate to severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy ("VVA"), as a result of menopause. The company commenced the US commercial launch of IMVEXXY estradiol vaginal inserts 10 mcg dose during August 2018, and the 4 mcg dose was launched in September 2018.
Ever since launch, the company has supplied ~86,000 paid scripts dispensed to about 31,100 patients. Of those paid scripts, about 23,500 were in January vs. 19,800 in December, which is about a 19% increase in a month. Moreover, the company has reported ~8,100 total prescribers writing scripts for IMVEXXY, which contributed to the ~5,340 average scripts per week in January (Figure 1).
Figure 1: January IMVEXXY Launch Metrics (Source: TXMD)
Perhaps the most intriguing metric is the average amount of refills being prescribed. Looking at Figure 2 below, we can see that the average number of IMVEXXY fills is close to the maximum allowable fills.
Figure 2: IMVEXXY Fill Data (Source: TXMD)
Out of all the data provided in the update, I believe this one provides the best insight on the patient acceptance of IMVEXXY. Not only are patients deciding to try IMVEXXY, but it appears they continued to use IMVEXXY consistently. Therefore, we have to suspect patients are experiencing the clinical and physical benefits of IMVEXXY (Figure 3).
Figure 3: IMVEXXY Attributes (Source: TXMD)
Consider the data above, IMVEXXY's launch appears to be successful to date. The company continues to compare IMVEXXY's launch trajectory to VAGIFEM's (Figure 4), which would be branded a successful launch compared to Osphena and Intrarosa mediocre launches.
Figure 4: IMVEXXY Launch Comparison Chart (Source: TXMD)
Zooming in on the chart (Figure 5)...
Figure 5: Launch Chart Zoomed In (Source Author From TXMD)
We can see IMVEXXY continues to follow VAGIFEM's launch numbers and has deviated from Osphena and Intrarosa's trajectory. What is more, IMVEXXY has had more scripts in the first 7 months (~23.5K) than Osphena (~20.8K) and Intrarosa (~20.5) did their first 18 months.
Why is the VAGIFEM comparison so important? Well, VAGIFEM eventually captured 40% of the Post-Menopausal Vaginal Atrophy ("PVA") market. If IMVEXXY can do the same, it would potentially lead to a ~$760M in sales of a calculated $1.9B U.S. PVA market in 2022. However, most drugs don't hit their peak sales until 5-6 years after launch, which would be in 2024 for IMVEXXY. This market is expected to experience a 6.5% CAGR, so that would be about $2.1B for 2024, and could equal ~$862M in U.S. sales for IMVEXXY. Of course, this is speculation; however, investors should be gaining a little more confidence every time management updates and IMVEXXY is still tracking along VAGIFEM's path.
Script numbers are important to determine if the product is being accepted by patients and providers. However, it is payers who are the other half of the business and are just as important to impress. This is where management can really make or break a product launch. Without payer support, pharmacies will not get reimbursement and that cost will be passed on to the patient.
Looking at Figure 6, we can see the company has been hard at work meeting with payers and signing contracts with major payers.
Figure 6: IMVEXXY Commercial Payer Update (Source: TXMD)
As of the end of January, TXMD has signed 7 of the top 10 commercial payers, who account for ~73% of commercial pharmacy lives. That is only up 1 payer from the JPMorgan conference update (Figure 7), that one is United Healthcare, which is about 14M lives. That leaves CVS/Aetna which is now the big whale at 36M lives and Kaiser at 8.7M lives.
Figure 7: IMVEXXY Payer Coverage at JPMorgan Conference (Source: TXMD)
Another important update is the status of the plans compared to the JPMorgan update. The plans who signed contracts and put IMVEXXY on their formularies are now in the process of adjudicating. Obviously, it is important for commercial pharmacies to start being reimbursed for IMVEXXY. This is another sign that the launch is going smoothly and all parties are giving IMVEXXY a thumbs up so far.
The company still has plenty of work to do to maintain IMVEXXY’s momentum, particularly with the acceptance of IMVEXXY in Medicare Part D plans. As of now, TXMD has signed 2 of the top 6 Medicare Part D programs. Although Medicare Part D only contains 25% of IMVEXXY's market, that is still millions of potential IMVEXXY customers that are currently not covered. The company expects those contracts to close at some point in Q2 or Q3 of 2019.
Figure 8: IMVEXXY Medicare Part D Update (Source: TXMD)
What is Next for IMVEXXY?
IMVEXXY might have established strong momentum off the launch pad, but the company still has a few boosters planned to fire throughout 2019. Most notably are the planned launches of TXMD's BIJUVA and ANNOVERA. These launches should increase prescriber and patient awareness to IMVEXXY. The company expects a synergy to develop between IMVEXXY and BIJUVA as they are both menopause management products. Considering women spend about 1/3 of their lives in menopause, we can say having two products in this area is a major opportunity for TXMD.
The company is also planning to ramp-up promotional efforts in Q2 with provider speaker programs and consumer marketing programs. TXMD is also expanding their sales force in Q1 to a total of 200 sales reps (Figure 1).
Figure 9: TXMD Sales Force Expansion (Source: TXMD)
In terms of script updates, investors should look forward to Q4 2018 earnings report to see official revenue numbers and updated script numbers. Hopefully, the company will have more details about the percentage of starter packs vs. maintenance packs. During the Q&A session at the JPMorgan conference, CEO Robert Finizio revealed that IMVEXXY scripts were 20% starter pack and about 80% maintenance. Which he believes that 80% of the new scripts are coming from other vendors. The downside is the maintenance pack is only $180, whereas the starter pack is $405. The upside is that physicians and patients are preferring IMVEXXY to their previous product.
What is next for TXMD?
Looking at Figure 10, we can see that the company has a long list of positive actions and catalysts distributed throughout 2019. Of course, the launch of BIJUVA and ANNOVERA are the big catalysts; however, the ability for the company to pull down $75M debt tranche should provide investors confidence the company is not looking to execute an offering anytime soon. With the company anticipating BIJUVA and ANNOVERA launch to have a similar trajectory as IMVEXXY, I am confident the company will have the ability to afford to take on more debt.
Figure 10: Expected 2019 Events (Source: TXMD)
All of these events listed above should be seen as positive events for the company and could provide some lift to the share price.
Charts Starting to Match Bullish Sentiment
In view of all the points made above, I am looking to add to my TXMD position in the near future. The end of 2018 market sell-off brought the share price down to the $3.50 area, but the market recovered in January and so did TXMD. In fact, TXMD has seven straight green weeks and appears to be making its way back to the $6.00 trading range (Figure 11).
Figure 11: TXMD Weekly (Source: Trendspider)
Looking at the weekly chart (Figure 11), we can see the stock has been undergoing a strong resurgence since the last week of December and is approaching some moving averages. In addition to the seven straight weeks of gains, it is nice to see the share price starting to rise above the $5.00-5.50 range it was holding prior to the end of 2018 sell-off. I believe this indicates that people are buying due to both fundamental and technical reasons.
Looking at the daily chart (Figure 12), we can see the share price is approaching the 200-day MA, which is my key moving average when analyzing long-term investments. I typically attempt to buy before a stock reaches the 200-day MA, but it looks like the stock has beaten me to it. Therefore, I will look to buy on the top side of the 200-day MA and look for a confirmation that share price is going to hold above $5.75 area. If not, I will hold off on the buy until the Q4 earnings report.
Figure 12: TXMD Daily (Source: Trendspider)
I believe I am going to have to make up my decision sooner than later. Although the daily chart's RSI looks to be approaching the overbought area, the hourly chart (Figure 13) tells me the stock is about to break out.
Figure 13: TXMD Hourly (Source: Trendspider)
The share price has busted through the top trendline produced back in November. Generally, the charts appear to have established a bullish trend since the start of 2019 and might be putting the screws to a large amount of shorts still deciding to keep their open position. If the stock can maintain this momentum, we might begin to observe a short squeeze and a strong move in the share price.
Even though the company just presented their 2019 outlook at the JPMorgan conference, I felt the need to point out the synergistic potential of the positive script updates and technical setup on the charts. This is important because this rarely occurred in 2018 even with multiple FDA approvals and IMVEXXY launch. This is a positive moment for long-term TXMD investors and cannot be ignored. 2019 has been branded as a pivotal year for TherapeuticsMD with a long list of upcoming events and product launches. However, it might be a bigger year for TXMD as the bulls look to regain power.
As for me, I am going to hold off on the buy at the moment. I will continue to keep a close eye on the charts to see if the overall market provides me another buying opportunity. If not, I will wait to for the Q4 earnings report to make a decision based on IMVEXXY's ability to maintain the VAGIFEM launch trajectory. At that point, we should have a better idea of what IMVEXXY is leading to in terms of revenues and profits. Once I have those numbers, I will be able to forecast a target price for 2019.
This article was written by
After years of working in the medical field, I have developed a passion for biotech and lifesaving therapies. Now, I am a full-time healthcare investor who is in search of the next breakthrough therapy, device, or pharmaceutical. My trade focus is around catalysts and potential acquisitions. In addition, I provide a marketplace service, Compounding Healthcare through Seeking Alpha.
Analyst’s Disclosure: I am/we are long TXMD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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