Agile Therapeutics, Inc. (AGRX) CEO Alfred Altomari on Q4 2020 Results - Earnings Call Transcript

Agile Therapeutics, Inc. (NASDAQ:AGRX) Q4 2020 Earnings Conference Call March 1, 2021 4:30 PM ET

Company Participants

Matthew Riley - Investor Relations

Alfred Altomari - Chairman, President & Chief Executive Officer

Dennis Reilly - Senior Vice President & Chief Financial Officer

Conference Call Participants

Oren Livnat - H.C. Wainwright

Leland Gershell - Oppenheimer

Lachlan Hanbury-Brown - William Blair & Company

Operator

Ladies and gentlemen, thanks for standing by, and welcome to the Agile Therapeutics Fourth Quarter and Full Year 2020 Financial Results Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to turn the conference over to your speaker today, Matt Riley, Head of Investor Relations and Corporate Communications. Thank you. Please, go ahead.

Matthew Riley

Hello, everyone and welcome to today's conference call to discuss our fourth quarter and full year 2020 financial results.

Before we start, let me remind you that today's call will include forward-looking statements based on current expectations, including statements concerning our outlook for the full year 2021, management's expectations for our future financial and operational performance, our business strategy, our assessment of the combined hormonal contraceptive market and the potential market share for Twirla, among other statements regarding our plans, prospects and expectations.

Such statements represent our judgments as of today, are not promises or guarantees and may involve risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements. Please refer to our filings with the SEC, which are available to the Investor Relations section of our website for information concerning risk factors that may affect the company. We undertake no obligation to update forward-looking statements except as required by law. The information on today's call is not intended for promotional purposes and not sufficient for prescribing decisions.

Joining me on today's call are Alfred Altomari, Agile Therapeutics Chairman and Chief Executive Officer, and Dennis Reilly, Chief Financial Officer. Following our prepared remarks, we'll open the call to your questions.

Let me now turn the call over to Alfred.

Alfred Altomari

Thank you very much, Matt. Good afternoon, and welcome everyone to our fourth quarter and full year 2020 conference call. I'd like to start off today by highlighting the hard work and efforts of our talented team and partners, resulting in the launch of our first FDA approved product, Twirla, a once-a-week contraceptive patch.

Twirla was designed to fill a need in the hormonal birth control market, bringing a non-invasive, non-daily, combined hormonal contraceptive, or CHC option, with a lower estrogen dose than the only other contraceptive patch available in the marketplace today. As we discussed last quarter, we were well on track to launch our product into the addressable CHC market valued at more than $4 billion, and we've accomplished that objective.

All three of our validation batches of Twirla were made available for commercial use in December, leading to the achievement of our 2020 revenue target with just over $1 million in gross revenue in the fourth quarter. In addition, the salesforce received their samples in late December. The traditional channel for distributing Twirla has been built, a network of three major US wholesalers as well as several regional wholesalers have been central toward the initial stocking of Twirla.

Moving forward, we believe that our established and growing distribution network will provide the supply chain infrastructure necessary to support the anticipated demand for Twirla. In terms of the commercialization efforts behind Twirla, our plan focuses on three primary strategies for engagement; first, healthcare professionals or HCPs; second, managed care; and lastly, the consumers.

First, our efforts with HCPs. Along with our partner, Syneos, we're able to hit the ground running with an experienced sales force of eight regional virtual sales specialists and 65 sales professionals. This is a grand total of 73 individuals calling on the HCP audience. The salesforce has not only been productive in the number of daily interactions with HCPs and their staff, but also in generating face-to-face calls. Since launch, we've been able to generate roughly 70% of our prescriber meetings face-to-face in the COVID-19 compliant setting.

But the question on all your minds I'm sure is how launch is going. I'd be remiss if I did not acknowledge the challenges our team has faced both nationally and regionally, including the pandemic, inclement weather, power outages, and water shortages. But taking all this into account, the short answer is that we're very happy with the momentum we are seeing and all the indicators and metrics. We're monitoring to track our salesforce effectiveness. Allow me to try to explain that.

Let's start with prescriptions, or TRxs. In my mind, we effectively launched a product beginning this year. Since that time, we're seeing weekly compounded growth rates of approximately 30%. I do want to add a word of caution. The point I'm making is one of momentum. We're not suggesting this as a sustainable rate for the purposes of modeling or guidance. We're still in the very early stages of launch. With that said, we are still happy with this start.

I also want to comment on the value of a TRx. Importantly, on average, each TRx is more than one unit or one cycle. The reason why is women get more than one month supply for Twirla when she leaves the pharmacy. Each TRx is averaging somewhere between 1.3 to 1.4 units or cycles received by a patient. This is in line with our internal planning. Think of this as getting 40 to 45 days of Twirla at one time. We're monitoring other important metrics. Physicians prescribing of Twirla. We are growing our base of prescribers weekly. Since January, our week-on-week growth is approximately 29%. The number of TRx each prescriber's writing is also growing, which is another good indicator. Refills, we're starting to see refills which is great news. Roughly 10% of our units dispensed so far at pharmacies are refilled, and we expect refills to accelerate as new prescriptions turn into repeat fill.

Ultimately, we're encouraged by the early results from our field representative efforts prior to launch, and the continued upward trajectory since as evidenced by the steady increase in TRx refills. This indicates that providers are willing to write longer prescriptions once the patient is initially successful on the product.

As we discussed in the past, the sampling dynamic is important for Twirla. We're continuing to offer full month sample supplies for patients to ensure individuals who are interested in Twirla have an opportunity to use it after consulting with their HCP. We believe it's important to the patient to ensure Twirla is the right product for her prior to getting their prescription and moving forward with becoming a long-term Twirla user. Initially, it does slow down the patient flow to pharmacy in the early days of launch. But we think of samples as an investment that introduces HCPs and their patients to Twirla, with the potential to stimulate future growth.

Moving forward, we'll continue to use the insights from our data-driven approach, HCP outreach, to refine our targeting to the highest volume practices. While we do not expect to share all these metrics going forward on a quarterly basis, we do believe they are good indicators of the initial commercialization of Twirla. Now on to managed care.

We also continued to make meaningful progress on both coverage and reimbursement for Twirla in a challenging managed care environment. We estimate our engagements with third-party payers have resulted in Twirla having achieved approximately 40% to 45% formulary coverage since launch. Notable, this is inclusive of one of the three PBMs, or pharmacy benefit managers, as well as several smaller plans.

We continued to work towards our goal of increasing formulary access with as much zero co-pay as possible over the course of this year. We also expect that Twirla will be now available to patients in one of the largest closed managed care systems based on a recently negotiated GPO, or group purchasing organization agreement. This opens another important channel for accessing Twirla and represents another element of our early momentum for Twirla. Please note, these arrangements do not report data through Symphony or IQVIA.

Finally, Agile is currently in discussions with specialty pharmacy and telemedicine partners in order to expand the channels that provide access to Twirla. We have said all along, we want to follow the patient on her journey and ensure Twirla is available for her along the way. We recognize the benefits afforded by both channels and believe that bringing differentiated value to our business and patients they'll serve. For specialty pharmacy, we prioritized buying a partner that would make Twirla easy for providers to prescribe and convenient for patients to receive Twirla.

Today, we're happy to announce our partnership with Sterling Specialty Pharmacy. Sterling has an established organization with patient-first philosophy that matches our ethos. They also have a proven track record of providing streamline and personal approach, which we believe will play a critical role in accelerating the Twirla uptake.

From telemedicine perspective, because of the ease and convenience that channel offers patients, we're committed to selecting partners that best align with our strategic needs. We'll continue to explore this area and hope to share more information about this in the near future, about our efforts and developments in telemedicine. Now on to consumer engagement.

As a company, we are focused on and committed to providing providers that fill the unmet need of today's women. As part of this, we believe it's important to break the stigma around conversations about birth control, and ensure women are able to educate themselves on the variety of contraceptive options available and make informed decisions that best align with their own personal contraceptive needs.

Since our I'm So Done unbranded campaign was launched in September of last year, roughly 700,000 women have engaged on our website content via displayed and paid social efforts, which has empowered them to join in the birth control conversations. We are happy to note Agile is breaking the contraceptive category mold by being the first unbranded birth control awareness campaign to activate on Tik-Tok, the most downloaded app in 2014.

I'm proud of these efforts and we'll continue to explore developing partnerships with popular lifestyle influencers and credible content providers to further advance the I'm So Done campaign. We believe these educational efforts are important components and a driver of the continued awareness to support the ongoing growth of Twirla amongst our target market.

Learnings from the unbranded campaign translate well into the development and launch of Agile's branded campaign for Twirla, a direct-to-consumer, or DTC, site and social media channels, which have both been launched in December. We're excited to share that in less than one month; we had approximately 300,000 engagements from our paid social media channels, and expect additional and impactful DTC activations in the future.

Our social media efforts are designed to drive traffic from the unbranded I'm So Done, or Twirla's social media pages and profiles, to the respective unbranded and branded websites. We are not focused solely on building followers or accumulating likes on Instagram or Facebook. We want to see real, meaningful engagement with the content and information on the I'm So Done and Twirla website and we're seeing just that.

While we're committed to becoming a market leader in women's health, we are also focused on our pipeline and the ability to help solve other unmet needs within the women's healthcare space. We believe this goal can be fuelled by organic growth, stemming from Twirla strengthening its presence in the marketplace. Our organic growth will be supplemented by our funding efforts, which I'm pleased to announce have recently increased. While Dennis will soon go into more detail on this, we've expanded our loan facility with perceptive advisors, who are now making available to Agile an additional $10 million on our loan facility upon the achievement of certain sales milestones.

This, in addition to Perceptive Advisors' $35 million loan facility from 2020 and reflects their continued competence in our business and provides Agile additional financial flexibility and options. In a summary, we executed our fourth quarter 2020 plan with the launch of Twirla and look forward to continue to educate and expand the prescriber and consumer bases on a differentiated benefit of Twirla, as we seek to continue growing market share.

I'll now turn it over to Dennis Reilly, our CFO, who will provide an overview of financial results and a financing update.

Dennis Reilly

Thank you, Al, and thank you to everyone for joining us today. I share Al's excitement and gratitude for our entire team, and the efforts put forth over the past quarter and the past year. While 2020 was challenging in many ways due to the pandemic, we remained focused and continued to execute on our commitments, which culminated in the December launch of Twirla.

Our company stands now on solid financial footing, and we believe we are well-positioned to execute on our plan, following our product launch in December. We closed out the year achieving the gross revenue target of approximately $1 million in the fourth quarter. This reflected the additional stocking of Twirla by wholesalers. Additionally, we delivered better than expected results on the expense side. Our operating expenses came in under $50 million for the full year, below our guided $52 million to $54 million range.

For the fourth quarter of 2020, our R&D expenses were approximately $3 million compared to $2.8 million for the same quarter a year ago. For the full year, R&D expenses were $13.5 million in 2020 versus $9.9 million in 2019. This year-on-year increase was primarily attributed to the validation work we did for commercial manufacturing of Twirla by Corium, our contract manufacturer, as well as clinical development and personnel related expenses.

Selling and marketing expenses were $10.7 million in the fourth quarter, compared to less than a million a year ago, while full year expenses were $23.3 million, versus $1.1 million in 2019. The notable year-over-year increase results from costs associated with our pre-commercial activities for Twirla, including the brand building, advocacy, market research and consulting, as well as the costs of establishing and maintaining our contract salesforce.

G&A expenses totaled $3.5 million in the fourth quarter, compared to $2.5 million in the same period a year ago. For the full year, G&A expenses were $12.7 million in 2020 versus $7.9 million in 2019. This increase in G&A reflected activities related to building out the support infrastructure, including higher personnel costs, professional fees, and the related compensation expense.

We ended last year with cash, cash equivalents and marketable securities of $54.5 million compared to $34.5 million cash, cash equivalents at year-end 2019. We have strategically managed our expenses and are well-positioned to support the continued rollout of Twirla with sufficient cash on-hand, to meet our projected operating requirements through 2021.

With that said, I'd like to provide a financing update, which we believe reflects confidence in our ability to support and grow our business over time. As announced in our earnings release today, we expanded our loan facility with Perceptive Advisors. In February 2020, we entered into a $35 million senior-secured term loan credit facility with Perceptive Advisors. It was structured in three tranches.

Last year, we drew down $20 million on the first two tranches of this funding to support our commercialization strategy for Twirla. We have a third tranche of $15 million remaining through 2021, available upon the achievement of certain revenue milestones.

We are now pleased to announce that Perceptive Advisors is providing an additional $10 million in funding to us, and that will be available through June of 22. Again, it's contingent on us reaching a pre-determined revenue target. So in total, we received in $20 million in this loan facility and we now have an additional $25 million available to us, which reflects the continued support of our partner Perceptive Advisors, a well-regarded leader in growth capital finances.

Importantly, this capital enables increased financial flexibility, and optionality for the Agile business. We're focused on remaining disciplined and nimble in our approach, and are committed to making the right investments at the right time to ensure strategic growth and maximize shareholder value.

Our team is excited for what lies ahead. We have a differentiated product that addresses an unmet need, and a balance sheet and financial flexibility that will help us execute on our strategy while delivering value to our stakeholders.

With that, we're happy to take your questions. Operator, you may now open up the line for Q&A.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Randall Stanicky with RBC Capital Markets. Your line is open.

Unidentified Analyst

This is Dan Busby on for for Randall. First question. Now that you've been on the market for a few months. I just wondered where you're seeing the greatest uptake thus far among women. Are they switching from the pill, which is from Xulane? Is it from contraceptive naive women?

Alfred Altomari

You're breaking up. I'm sorry, you're breaking out. Could you just –

Unidentified Analyst

Can you talk about where you're seeing the greatest uptake thus far among women, whether that be from the pill, Xulane, contraceptive-naive women? And second, from a physician prescribing perspective, what's the biggest pushback done thus far?

Alfred Altomari

Sure. Thanks for the questions. The first one doesn't really surprise us very much. So far, the bulk of the prescriptions were staying, be it all very early days, are coming from women that were once on the pill or coming off the pill. So if you will, switchers, that have come off one method to another, and that's what our early market research had said, that's where we'd expect it because that's really the insight we built the brand around, the idea of a more convenient alternative to pills. So that answers the first one.

That's not a surprise to us. But again, early days, and we'll keep you updated on that. Pushback, I think the biggest thing we face is-- again, what we’d expect in our market research, a little bit of out-of-sight, out-of-mind. A lot of physicians, OB/GYNs, in particular, had not really used the patch mainstream for a number of years. So, it's kind of getting it from the back corner of their mind until the front of their mind that now our patch Twirla can be a frontline method. So, I don't want to say ambivalence, but it's a little bit of out-of-sight, out-of-mind.

So, we're excited to bring this patch out and bring it back into the mainstream. But I think that initially the first challenge to our reps, again, and both of these are what we expected. It's always nice to see that your market research actually plays out well. I hope that answers your questions, though.

Unidentified Analyst

Yes, that's helpful. And if I could ask one follow up. Last week, we saw a second generic Ortho Evra approval, just wondering if we should be worried about potential competitive implications for Twirla, whether that be in the form of potentially greater pricing pressure in the category or even just confusing doctors now that there's a third patch on the market.

Alfred Altomari

Now, I think your note that you sent out, that Randall sent out, I think summarizes the company's feelings too. It's really our issues or our challenges with the patch -- our opportunities are still the same. The new approval is another form of Ortho wrapper [ph]; it's got the same label as Xulane does. Also I should note, and I think we've pointed this out to the street a few times, and after our approval, their label also reflects the BMI contraindication over 30. So, we're all on equal playing field, I think that's been loss for doctors, one of the things we're talking to doctors about is that – look I mean the BMI is a level-playing field, and it's very prominent on their label, so both products now are going to the elevated estrogen level. So, I think the competitive challenge is still the same for us. We need to differentiate our product both with our physicians, with women, and also in the managed care.

And we feel like we have a great story, and I think as Randall said in his note and you said in your notes, it's good to see people that there is value there, the market is indeed, that there’s the real market here for patches. But we'll keep an eye on it and we'll keep you posted, but that's our initial read. It's another form of Evra, same label, no differentiation label, and we still have a very competitive difference that we're getting traction with doctors and managed care with, so we expect to stay on that, but if anything changes, we'll let you know.

Operator

Our next question comes from on Oren Livnat with H.C. Wainwright. Your line is open.

Oren Livnat

Hey, I apologize; I missed the very beginning of the call, but I assume you can help me out. So can you just help us understand what you're seeing -- I know, it's really early, but you mentioned sampling. And you mentioned leading indicators. I'm just wondering what can you tell us with regards to that demand that we don't see yet that you do see? How about dispense samples, maybe refill requests so to speak from physicians' offices for more samples, maybe reimbursement hub inquiries you're getting to help people do prior offs where necessary or help them work through those medical waivers for ACA? Is there anything you can help us with on that front? I have a follow up.

Alfred Altomari

All right, sir. No problem Oren. No, I think every indicator we're looking at, both hard indicators, and I'll call them softer indicators look good to us. And I think we mentioned before, one of the things we look at is the number of doctors we accrue every week, who are new doctors that are writing. Are the productivity of doctors going off, is it a one-and-done prescription, are they getting more productive, are doctors writing refills, are pharmacies getting the refill? So I think ultimately, this is a category that's built on the volume of refills, because any one patient could theoretically be 13 units a year, as we’ve talked. So all those kind of hard indicators that I'm looking at right now, all seem to suggest, and I think TRx to me is the math of that, if you will, is the outcome of that math. So, doctors converting to scripts, multiple scripts, multiple scripts turning into refill. So, as I mentioned in the call, about 10% of our units that got dispensed through pharmacy are already refills, which is a good sign. So we like that, and then the softer indicators that you're mentioning, we know they are quantifiable, the number of calls we're getting at the medical fairs, you mentioned the hubs, but just questions doctors are asking, and they're requesting literature from us, which is great.

They're doctors that we're not calling are calling for samples, which is great; it means our advertising to doctors is working. So there's some of the things, and then as you mentioned the last but certainly not least, the reps, are they deploying samples and doctors in the midst of COVID. And even though we're seeing doctors face to face, a lot of times we can't get a sample like we used to. But with that said, we're deploying a lot of samples. And the answer your question, we're just starting to see them, if you will turn. Suddenly, I know it's the end of the month, but effectively, we've probably had one good pass, maybe two fair passes, with offices. And a lot of practices are group practices. So I think it's a little too early to see if the samples are turning, I can't tell yet, but it feels good. And we're deploying a lot.

So that's something we're keeping an eye on. But significantly more samples than put out and we have prescriptions for at this point. So samples are, as I mentioned on the call, we think of it like an investment. And so everything seems to be pointing north, if the weather would cooperate and everything would settle down a little bit around the country, that would make our job a little bit easier. But with that said, we push through.

Oren Livnat

All right, clearly, we can't build a model on good vibes yet, it's too early for that. But if you could just maybe give us any sense of the magnitude of samples that are being put out into the channel? We're trying to get a sense of, theoretically, how much demand has to get soaked up before we see a true prescription pull through, a situation review? And then I have a follow up on managed care. Thanks.

Alfred Altomari

Yes, I wish I can guide you, when we can guide ourselves on the return on sample investment, I could tell you, if you just think about 73 people calling on doctors and they make multiple calls per week, just try to put your mind around six or seven weeks of sampling in the number of offices you think we've seen, so that'll give you an idea of the volume samples are out there. But again, they haven't turned enough, we haven't been able to establish our own model, how that's going to work, we just think, based on what we're seeing that a lot of the doctors that we leave samples, to turn around and do write the product. So that's the good thing.

So it's a little early days, but we'll keep an eye on if we can get smarter will let you know, but it's a little tougher now. And this is one of the areas that in a COVID environment not being able to see the sample clauses and watching the current stuff get in our way a little bit. Because when we turn over to sample, the doctors unless they let us see the sample clauses, there's no accounting, I can follow the pull through unless we can get into in and see it. So that one aspect is where our hands are tied behind our back.

Oren Livnat

All right, and then just quickly to managed care. I don't think Xulane is obviously the biggest source of prescriptions, there is probably the tens of millions of pills, like you've said in the past. But, where do you stand in your 40% to 45% coverage with regards to Xulane, whether it be parity [ph] or ahead of them? I'm trying to understand for that initial wave, is there any hurdle to someone prescribing getting reimbursed for your product, vis-à-vis, Xulane, or Generic that's coming behind it, or in your contracts, you're negotiating, going forward, does it come up at all, is it even relevant?

Alfred Altomari

Where we're on formulary will -- I believe this is my memory, so I believe in most situations we're on parity. So in other words, the doctor more than likely can write both brands. And actually, that's something we sided to the plans, we believe we have to walk the talk, we believe in giving women choices and doctors choices. So for instance, on the GPO we just were awarded, they're on there with us. So we don't believe we can get a doctor to write our prescription, that's a different problem. So we just say, put us on the list and give us an even shot.

So, in general, that's our position, that's what we see their plans, a lot of the plans don't want to talk to us, quite frankly, because it's a little early in the launch, and we just don't have enough feature volume, so we would expect it to keep growing and we're just going to -- like we did with the GPO, we're going to pick off big pieces of volume that doesn't necessarily run through our IQVIA or Symphony. So this is a closed system we picked up.

So we're just going to keep following a woman on her journey, where she goes, we'll go, and try to open those markets. But in general, to answer your question, we're at parity with them. And then, over time, as I mentioned earlier, most of our volume isn't coming from -- very little of our volumes is coming from Xulane prescriber, Xulane patient, they're really coming from pill patients. So that's why we don't care as long as we're on there, and we can generate volume with a doctor. That's all we care about.

Operator

Our next question comes from the Leland Gershell with Oppenheimer. Your line is open.

Leland Gershell

Hey, thanks for taking my question and congrats. First question, just in terms of the type of patients you're getting on to Twirla. Clearly, most of them are coming from the pills. But could you maybe provide a bit more granularity, are these women who are in their younger years, are they a bit older? I'm trying to get a sense of -- is there a sweet spot in terms of the type of woman who's coming on to Twirla that you're seeing? I know it's early days, and I got a follow up.

Alfred Altomari

Thanks for the question. Yes, you answer the last part right, it's still early days, but we can't help ourselves looking at the data. Yes, they tend to be women that have come off the pill. So I would say the initial uptake is more in early-to-mid 20s. So it's not younger, it's not older, it's in the middle of the bell curve, if you will, the conscious at the market, again, that doesn't surprise us. I think where we would like to see doctors use the product will take -- clearly we like doctors using the product, even on switching patients, if you will. But we'd like to see some more in the new patients, the naive, the therapy, if you will, the new start patients, because we think that's an easier add. But right now in the middle of a bell curve, as you would expect, we've seen not a lot young, not lot older, it's sitting in that experienced-user-of-pills.

So that's what we're seeing, but we will give that change of -- that's what our models suggested we would get. So I'm not surprised that we're going to keep a look at it. That's the best we can get just yet on patients. And the other thing that I think is exciting, to answer your question fully, what I am excited about it's a mile wide inspec [ph] in that it's coming from around the country. So the good news is it's not coming one region or not one doctor, if you will, one geo target, it's coming from multiple states, multiple doctors, which is good. So I like the fact that we're getting uptake across the country and across the doctors. So -- and that there -- the lack of consistency on that one, we will make safe side itself [ph]. And that's what we see so far, we're going to keep looking out of the changes and we'll keep you updated, but that's what we see in the early days.

Leland Gershell

Thanks. And then just actually two briefly. Just following up on the GPO agreements having been signed. Just wondering if you are in negotiations with other such closed systems and if we should expect to see more down the line? And then a question, maybe more for Dennis, its early days again, but just looking at the gross to net you're running at a 25% that may be affected by the early launch. Just want to know if that's something we should think about going forward, or if that's going to shift a bit of launch mature expense [ph]?

Alfred Altomari

Yes, you should expect that we're going to follow the business. So in the commercial channel that we see in our IQVIA and Symphony, that really are the commercial books of business and there are other books of business out there, closed systems around the country. There are very big systems that we just landed this, so if that's where women we're going to follow them. On a state level, the Medicaid can be important to us. Depending on the price, we're looking at some of the Medicaid volume, down the road we look at other places, like student health centers. So if that's where her journey takes us we'll follow her. So the answer is yes, you should expect us to keep trying to win strategic books of business that we can bring Twirla to. So I hope I make sense, but more to come, we got one in a boat, so we're going to keep trying, but we're excited to get such a big one early.

Dennis Reilly

Hi. It's a mixed bag, right now I don't think 25% is the very long term rate. I would anticipate it's in the mid-30s, but it's a mixed bag, early on we paid some stocking fees to the wholesalers. So that stuff was a little bit higher, but we don't have the big managed care contracts that may over time -- depending on our mix if we need to sign them we will, and that's where I get into the mid-30s. It's a mixed bag. But if I was doing a model, I think you should -- when you get out, especially out in a year or two, I would say that mid-30s is probably more realistic.

Operator

Our next question comes from Tim Lugo with William Blair. Your line is open.

Lachlan Hanbury-Brown

Hey, this is Lachlan on for Tim. Thanks for taking the questions. First of all, I appreciate that there is not a lot you can say about sampling and the pull-through there. But do you have any sense of when we should expect to start a reliable numbers coming through IQVIA and Symphony that gave us a good sense or a view about prescribing is going? And secondly, you mentioned the pipeline briefly in the prepared comments. Can you expand on that, what are you thinking when should we expect to see an update?

Alfred Altomari

Sure, very good questions. So the first one on samples, it's interesting, we don't point this out, but Xulane where they do samples they give one patch out to a woman, so one week of therapy. We give out a full box, which is a cycle and the fact that it's free for a month, we're giving away a month a minimum. So if you think about it, we know doctors often give out more than one month. We don't want to oversample, but we know on average that might be closer to two. So if you think about where we are in the launch cycle, this is why we have been a bit heavy-handed with creating expectations on the first quarter and the early days of launch. We think we got a good month of two ahead of us of both heavy sampling -- we're actually happy, as I mentioned with the trajectory of the brand with actually getting the retail because our reps are really just battling through some of that. I mentioned some of the challenges that they're facing, they really are just been in front of the doctors a handful of times, so we know we need to be in front of them a couple more times. So I think what we see is that there a sampling phenomenon is going to last, I think at least the first quarter. That's why we've been without -- to be explicit, we just think the first quarter, from a TRx point of view, it's going to be as we saw a little bit in January, picking up some steam in February, and we would hope that continues to pick up in the March. And then we outgrow it a little bit I think. I think we're headed for at least the quarter, maybe in the early second quarter.

But that's the best we could see because I think, it's just math, we give out at least one month maybe two, we've seen them in January, they wrote a prescription, they're not go on the pharmacy until March. I think we've got to work path with that first bolus in the first month quarter and then down the road, we're on multiple doctors in that practice. So we're seeing, as we mentioned before, we're targeting group practices but we're influencing only a couple of the doctors at a time. So there's still a lot of opportunity inside the practice, so we still have to expand our beachhead of boxes and then, obviously work to the samples.

For the second question on pipeline, I'm very excited about the work Dr Korner has been -- Paul Korner has come -- take a clean sheet of paper for our pipeline, we've done some market research, some technical reviews and we're actually going to probably talk with the FDA on what our ideas of the various paths forward, and so we would expect hopefully in the second half of this year to be able to give some clarity on what we want to bet on and when we went to bet on them. I think before we get in front of you, we really want to know is a buying with the FDA on the paths forward. So the nominal amount of work -- we tease Paul and I tease Paul that he probably knows more about our pipeline in your short time here than the companies know, because we spent so much of our time on Twirla so it's taken a fresh, very healthy, look at our pipeline and done great technical work and Amy Welsh, our Head of Marketing brought consumer insights and physician insights. And we're going try to mix that up with some FDA feedback and this is a bet we want to make.

So the short answer to your question, I think it's going to be in the second half hopefully before we can give you more clarity. But for now, you should now, particularly it's [ph] hard and hopefully -- we're excited about our pipeline, I think Paul's inherited, and he would tell this himself, a lot of tough choices. All of our free programs, peer viable and peer exciting, so I think if anything, prioritizing them in the early days of a company like ours is going to be the biggest challenge. More to come, but realistically, the second half.

Operator

Our next question comes from [indiscernible] with Maxim Group. Your line is open.

Unidentified Analyst

Hey, congrats on the launch and taking my question. A few questions on the managed care. I know you are currently in continued negotiations. But when can we expect the next meaningful bolus of patients for coverage and for the patients that are covered, are they seeing zero dollar co-pays, or are you bring them down with co-pay system cards or has anyone had to pay out of pocket so far, based on what you know?

Alfred Altomari

Yes, good question. I think we're going to keep, I think, chipping away at it. We would like to the big bolus could happen if we can get once -- the second help or the third PBM to turnaround, but I think in the meantime, we're going to keep chipping away at this. So hopefully, we'll continue an upwards climb and picking up lives. There's still a lot of business out there that we can control, and we're getting, because remember, by the PBMs influence a lot of the decisions we also are mindful in certain states, for instance, the state mandate supply. So we see a lot of PBMs under contract, we're picking up plans under that, if you know what I mean, circumstances where the plan is I'm going to cover, so that's good news. So I think you should expect like incremental from us, this incremental pickup, if you will. And then, what we're seeing as far as coverage, we haven't seen a lot of cash out of pocket, so we experienced a lot -- a significant amount of the plans that already picked via co-pay and there is some co-pay involved. We do have a co-pay program that does help, but so far, we've not been two of our speeds with co-pays and we're not seeing a lot of cash. Now, cash to -- they got scared off and say they have seen it, they could have gone to the pharmacy and say I'm paying that. So we haven't seen it, but we're keeping an eye on for again, but we're studying all that as we get there, but a lot of zero co-pays and the companies that plans are required, a lot don't look as owners to us and won't help out a little bit, so this is where sampling happens.

And then on the Affordable Care Act, the last piece of the complicated puzzle, if we're not covered under the plan, under the Affordable Care Act, it's our knowledge and our understanding that if a doctor wants a [indiscernible] he can intervene with a lot of medical necessity. So we are seeing those go through, and doctors and staff are advocating for us in their patients, and then once they free up that patient, we should be good for the length of therapy. So we're seeing all these out. I haven't seen that much cash, but I'll take a look at it after the call to make sure.

Operator

There are no further questions at this time. I'll turn the call back over to Al for closing remarks.

Alfred Altomari

Great, thank you, operator. I think I'd disclose out today by saying that 2020 obviously was a very important year for Agile. Despite the widespread impact of the pandemic, we're able to persevere and we continued on our plan and importantly accomplishing our goal, launching Twirla, which we were thrilled about. With Agile receiving FDA approval, and funding from Perceptive Advisors, as well from an equity financing transaction we did in 2020, we've made a number of key hires including our Chief Medical Officer, Dr Paul Korner, and secured a partnership with Syneos to develop our salesforce. Finally, despite the inherent challenges of the pandemic operating environment, we're able to address an unmet need in phased market with the launch of Twirla. I'm incredibly proud of the hard work and effort of our whole team over the course of this last year. As we look ahead in 2020 and beyond, we are really optimistic and excited about the opportunities before us to help more women buying the product that really meet their needs. We're confident we have that product. We have the right people and we have the right plan in place.

We continue to be excited about the early acceptance and growth of Twirla and look forward to continuing this trajectory, as we work towards our goal of becoming a leader in women's health. I'd like to thank everybody for joining us on today's call. I know it's a busy season for you all. We wish you well, we wish you to be safe and we look forward to speaking to you all hopefully on our first quarter 2021 earnings call.

So with that said, I thank you and good night.

Operator

This concludes this conference call. You may now disconnect.