TherapeuticsMD's Business Model Affirms Additional Dilution Is Practically Certain In FY2020

About: TherapeuticsMD, Inc. (TXMD)
by: Boston Biotech Investor
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Boston Biotech Investor
Long/short equity, biotech, small-cap, mid-cap

TXMD's EV is off ~43% from September peaks due to an ~11% dilution enacted in October. Subsequent press release noting cash runway into FY2021 is not consistent with operational/expense infrastructure & responsible liquidity management.

Annualized Q32019 operating expenses were north of $200MMM. TXMD spent $100MM in non-payroll SG&A expenses the last year versus a $3MM Annovera Q42019 commercial launch revenue target & Bijuva disappointment.

FY2020 and FY2021 TXMD revenue estimates continue to fall. Not 1 insider has purchased stock since falling 20%+ from last financing suggesting internal confidence is low.

Should FY2020 revenues equal $107MM (the average analyst estimate), gross margins of 87.5%, and operating expenses average approximate Q32019 actuals would lead TXMD to still burn over $440,000 per business day in 2020.

Simple cash flow analysis concludes another dilutive event is certain should TXMD not secure "more than $50MM" in committed non-dilutive financing, "blow away" revenue forecasts and/or drastically lower operating expenses.

Our analysis concludes TXMD's operating cash burn, total and non-payroll related SG&A spending and seemingly unending dilution uncertainty has lead to continued share price losses. Our analysis concludes dilution is certain again in 2020 after