Evofem Biosciences' (EVFM) CEO Saundra Pelletier on Q4 2021 Results - Earnings Call Transcript

Evofem Biosciences, Inc. (EVFM) Q4 2021 Earnings Conference Call March 4, 2022 4:30 PM ET

Company Participants

Amy Raskopf – Vice President-Investor Relations

Saundra Pelletier – Chief Executive Officer, President and Executive Director

Jay File – Chief Financial Officer

Conference Call Participants

David Amsellem – Piper Sandler

Ram Selvaraju – H.C. Wainwright

Jeff Hung – Morgan Stanley

Operator

Thank you for standing by, and welcome to the Evofem Biosciences’ Fourth Quarter and Year-End 2021 Results Conference Call. [Operator Instructions] As a reminder today's conference call is being recorded.

I would now like to turn the conference over to your host, Ms. Amy Raskopf, Vice President of Investor Relations. Ma'am, you may begin.

Amy Raskopf

Thank you, Valerie. Good afternoon, everyone, and welcome to the Evofem Biosense Q4 and year-end 2021 results call. If you haven't done so already, I encourage you to access the press release we issued this afternoon and slides that accompany this call, both of which are at evalem.com under the Investors tab.

Before we begin, I would like to remind you that remarks made on this call will contain forward-looking statements, which are made only as of today, March 3, 2022. For a more detailed description of important risk factors that could cause our actual results to differ materially, please refer to our annual report on Form 10-K and our most recently filed 10-Q.

With that, I'll turn the call over to Evofem's CEO, Saundra Pelletier.

Saundra Pelletier

Thank you, Amy. And I want to thank everyone for joining us today on the call. Evofem delivered strong growth in the fourth quarter of 2021. Net product sales of Phexxi for hormone-free birth control more than doubled in Q4. It increased 109% to $3.6 million. This reflects the hard work of our sales organization, the impact of our innovative marketing campaigns and ongoing gross to net improvements. We are excited to build on this foundation in 2022 and beyond.

Additionally, we made significant progress in our program developing Phexxi for the prevention of chlamydia and gonorrhea. Today, literally today, we completed enrollment in our registrational Phase 3 EVOGUARD trial, ahead of the schedule we discussed on our Q3 earnings call with more participants than called for in the study protocol. This was due to very strong interest in the trial and high screening levels.

We also received qualified-infectious-disease-product designation from the FDA for prevention of chlamydia. This affords us five years additional market exclusivity on approval. I'll discuss next steps for this program in greater detail amongst other initiatives, to build shareholder value after our CFO, Jay File, reviews the financial results. Jay?

Jay File

Thank you, Saundra. Today, I'm going to focus on the fourth quarter of 2021 relative to Q3. For our year-end results, please reference our Form 10-K to be filed in the next few days.

Net product sales increased 109% to $3.6 million, driven by a 73% increase in Phexxi units shipped.

Research and development costs were unchanged at $8.7 million, reflecting clinical trial expenses for the Phase 3 EVOGUARD trial of Phexxi for the prevention of chlamydia and gonorrhea in women.

Selling and marketing costs were $24.9 million, down 18% as expected. This was due primarily to lower media expenses related to the Annie Murphy DTC marketing campaign.

General and administrative costs were $5.7 million, up 14%, primarily due to increases in outside services and payroll-related expenses, including stock-based compensation.

As a result, total operating expenses decreased to $41 million and our loss from operations was $37.4 million.

We reduced our net cash burn to $16.8 million in Q4 versus $32 million in Q3.

For 2022, we expect net product sales will be in the range of $30 million to $35 million. Momentum should build as planned in pharmacy benefit managers or PBMs adhere to the updated federal guidelines that are expected to expand access to Phexxi at zero out-of-pocket costs for commercially insured women.

With this expanded coverage for Phexxi, gross to net should improve to the 35% to 40% range. We believe this, coupled with significantly lower R&D cost once we complete the treatment phase of the EVOGUARD trial, will get us to cash flow breakeven on a quarterly basis by the end of 2023.

At the close of Q4, we had $7.7 million in cash and cash equivalents as well as $5.1 million in unrestricted cash from the adjuvant notes for use.

In Q1 2022, we raised $10 million in gross proceeds to the company through two unsecured debt transactions. We also secured a $50 million equity line of credit that gives us flexibility should we need it.

Finally, we received a notice from NASDAQ last week that Evofem remains not compliant with NASDAQ listing standards because we do not currently meet the $1 minimum bid price requirement. We have requested a hearing with NASDAQ listing qualification panel to present our case for additional 180 days to meet their requirements, which we expect to take place by mid-April. This request postpones the delisting process until the hearing. We fully expect that our presentation at that hearing will be received favorably and that we began to an additional 180 days to comply with their share price requirements.

And with that, I'll turn it back to Saundra.

Saundra Pelletier

Thanks, Jay. Our substantial growth in Q4 was driven by the House Rules DTC campaign starring Emmy Award-winning actress Annie Murphy, in addition to the targeted efforts of our sales force with OBGYNs, nurse practitioners and midwives. Nearly 40,000 boxes of Phexxi were dispensed in Q4, up 81% from Q3, and total prescriptions grew nearly 70%. Almost 23,000 new patients started Phexxi in Q4, up 56% from Q3, which is a strong reflection of our success in driving demand.

Nearly 69,000 women have come through our telehealth platform to date, and the vast majority of them are under the age of 35. While the largest segment is 25- to 34-year-old women more than 30% of these women are between ages 18 to 24 years old. We are implementing programs this year to further expand Phexxi use in these segments and particularly among college age women.

With our strong established prescriber base, our sales team is now focusing on increasing the volume of prescriptions from each provider. We will launch a national HCP campaign at the Annual Meeting of the American College of Obstetricians and Gynecologists in early May, aimed at increasing awareness of Phexxi among prescribers and broadening patient segments. The end goal is to increase the percentage of women who will be offered Phexxi and boost prescriptions from each practice and from each prescriber.

We are very pleased with the direction that things are moving relating to access for Phexxi. One of our key objectives that we laid out in the Q3 call was to spur federal action to mandate coverage of all FDA-approved contraceptives, including Phexxi and zero out-of-pocket cost to the patient under the ACA. I am proud to say that we met that goal.

In January, the Health Resources and Services Administration, or HRSA, and the U.S. Department of Labor, updated guidelines preventing the FDA birth control guide from limiting contraceptive access. They require that most commercial insurers and PBMs cover new and unique contraceptive options such as Phexxi. They specifically state that the plans may not require patients to try and fail multiple options before covering a different product if a provider deems that product medically necessary. These updated guidelines are significant.

As plans begin to evaluate their practices to comply with them, access to Phexxi is expected to increase. With the removal of payer restrictions like step edits and denials of coverage, followed by coverage for Phexxi at zero out-of-pocket costs to women, we expect our business will dramatically improve.

The guidelines from the departments of health, labor and the Treasury took effect immediately in January. However, we understand that there are certain insurers that find legal and semantic loopholes to avoid compliance. To combat this, in February, a letter signed by 34 U.S. senators was sent to these departments, calling for heightened enforcement of the ACA requirement that insurance companies cover all FDA-approved forms of birth control at no cost to patients. The letter targets these noncompliant insurers that are not following the guidelines as intended.

Now turning to R&D, we have made tremendous progress with our program to develop Phexxi for the prevention of chlamydia and gonorrhea in women. The unmet need here is significant due to the increasing incidents as well as the rise of antibiotic resistant strains. Every sexually active woman no matter what form of contraception she's using is at risk to contract one of these SDIs. Chlamydia is the most frequently reported bacterial infection in the United States and gonorrhea is number two. The CDC estimates that four million new cases of chlamydia occurred in 2018, resulting in a direct medical cost of almost $700 million, and there are 1.6 million new cases of gonorrhea. Cases are underreported because inspected people are often unaware that they have these sexually transmitted infections. Up to 70% of women infected with Chlamydia have no symptoms. But untreated, this can lead to major health problems.

Chlamydia is a primary cause of pelvic inflammatory disease and infertility in women. Based on FDA action in February, Phexxi is now qualified for an additional five years of marketing exclusivity following FDA approval for either chlamydia or gonorrhea or both. This stems from our qualified infectious disease product designation for both potential indications. We also have Fast Track designations from both indications, which means the FDA will review our regulatory submission in six months versus the usual ten-month period. Earlier today, we achieved full enrollment in our registrational Phase 3 trial of Phexxi to prevent chlamydia and gonorrhea. We met this milestone a month ahead of the schedule discussed on our Q3 conference call. This reflects the discipline and the rigor of our clinical team. Along with the high level of demand to participate and the desire for a new FDA-approved preventative measures. I want to thank our study centers as well as the many women who are participating in this landmark study.

As a reminder, this is a double-blind, placebo-controlled clinical trial, achieving the primary endpoint would allow us to file for regulatory approval with the FDA with the end goal of expanding the Phexxi label to include prevention of chlamydia and gonorrhea in women as well as hormone-free birth control. With enrollment now complete, we are on track to report top line data in the second half of the year, followed by regulatory filings in the first half of 2023 with potential FDA approval expected by the end of 2023.

Phexxi would be the first and the only FDA-approved product to prevent these SDIs. And again, every sexually active woman is at risk. We believe this represents a large market opportunity for Evofem in the United States and around the world.

Meanwhile, with an eye toward pipeline expansion, we entered into a collaboration with Orion Biosciences to evaluate the compatibility and stability of Orion's novel CCR5 antagonist in Phexxi, targeting HIV prevention among other indications. Our collective goal is to develop a new product candidate with potential to be the first and the only product to protect against unintended pregnancies, STIs and HIV.

We expect results of this initial preclinical work in the third quarter. Assuming positive results, we will seek government grants and philanthropic funding for subsequent clinical trials of the NPT product candidate. This goes hand-in-hand with the work we are doing under our 2020 Global Health agreement with Adjuvant Capital.

In the fourth quarter, we submitted our regulatory registration in Mexico followed by Nigeria and Ethiopia in January of 2022. The goal of this work is to ensure that safe, effective, high-quality contraceptive and STI prevention products are made available to women and health care providers in low and middle-income countries on terms that are commercially viable for Evofem.

We look forward to the day when all women, regardless of their income, regardless of their geography, will have access to hormone-free birth control that they can use on their terms only when they need it.

With that, operator, I would like to open the call for questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions] Our first question comes from David Amsellem from Piper Sandler. Your line is open.

David Amsellem

Thanks. So just a couple first. You mentioned, Sandra, how certain insurers are potentially looking for loopholes here. I guess what I'm trying to gauge is what do you think is the risk that you still see some plans, potentially large plans, not covering the product the way it's supposed to be covered? And what do you think that could mean for 2023 – sorry, this year and beyond. So just help us understand just the overall risk level.

Then secondly, as far as the mechanics of all this happening, I think, you had stated that this is mainly going to be a 2023 impact. Do you think there is a chance that this could be pulled through sooner? And I guess where I'm going with this is that $30 million to $35 million sales guidance, does that contemplate meaningful impact of coverage at zero copay? We're just trying to get a sense of what your underlying assumptions are there. So, I'll start with those. And yes.

Saundra Pelletier

Okay, great. Thanks, David, very much. Okay. So, all right. So, let me try to unpack that logically. So, one, the projections that we gave, the $30 million to $35 million does not contemplate a positive flood gate this year of ACA, it does not. We want to be very realistic with the guidance that we're giving. So, I'm sort of starting at the end and going backwards. To your point, 2023, January is really kind of the silver bullet, meaning that's when the mandate is going to – all the plans that are still walking have said that they basically have this year to decide are they going to enact early, are they going to do the right thing and give women coverage.

And so, here is what I would tell you is that right now we have about 70% coverage. The plans that are the culprits are two plans, United and Express Scripts. If you could call them David and tell them to stop it, I would be incredibly grateful. But here's the detail. So, here's what we've done is that because of this mandate, they would say things to us like, you are going to have to give us a 60% discount and a three-year contract or we won't cover Phexxi.

And so we said, you know what, that's lunacy, like we're never doing that. That's craziness. So, our reps are doing prior offs. We have trained our sales force. Now look, I know some people might say, “Oh, yes, prior offs are paying for offices. They are not just an easy layup. Even though our prior off, I mean this is one of the most simple prior offs that I've ever seen, and I've been in this industry forever.

So our reps literally – when we know that its geographies that are heavily United or Express Scripts, our reps insist that all of these prior offs go through. They actually go into the offices. They are willing to help the staff do it; so that the scripts are getting covered is what I would tell you. We've actually heard from United that we are torturing them with prior offs, which we love. And we say, well, we'll stop it if you just do the right thing for women.

The good thing that has happened, though, David, is that they are not telling women, they have to fail on seven or eight products. And that was literally what they were telling women. Women with cancer who can't use hormones anyway ever again, were being told they had to fail on seven or eight products. And obviously, they can't – there are not even seven or eight products for them to take.

So, one, that's been a huge improvement, two, I would also tell you that those two plans have said to us that they are very interested in playing ball. And that between now and January that they will consider some kind of a contract or agreement that is a discount less than 60% in the 30% range. So, I would tell you that the mandate has helped. It's given much more reasonable percentage terms for anybody listening that wonders is that high or low, that's kind of standard, frankly, what happens in the industry, not the 60%, the 30%.

So, I would tell you the numbers that we have now don't reflect it. I would tell you that many of the smaller plans adopted it already. They knew the writing was on the wall and they would have to. That's why our coverage has increased. So, we've actually, already seen very, very positive coverage increases already. At one point, we were 50%, 60%, we're 70% now. But I would tell you that we still have some struggles with some of the two big players, but the prior autos are still getting coverage for women.

David Amsellem

Okay. That's helpful. Let me sneak in a follow-up. So, you talked about the gross to net of 35% to 40% this year. What do you think the gross net is going to be after this year once we're – as you noted, we're finally sort of seeing the real impact of the mandate at zero copay?

Saundra Pelletier

Yes. Jay, do you want to answer?

Jay File

Yes, hi David, it's Jay. So yes, that estimate with gross to net is with the full impact of 2023. So really rolling into 2023, not 2022. I can say that early looks into 2022, we are seeing some favorable impacts in gross to net as we kind of outlined a little bit on our prior call, for Q3 results with turning off denial conversion. As you can imagine, I didn't have a positive lift, and we're already seeing a decrease from the low 70s down into the low 60s, and we do anticipate that will be a trend that will continue.

David Amsellem

So just to be clear, Jay, that 35% to 40% is how we should think about steady-state gross to net going forward?

Jay File

Yes, that should be kind of where we would like to get to by the end of 2023. And I think that even could be better from after that as well, but we think that's a reasonable approach to kind of if you're looking to go forward in 2023.

David Amsellem

Okay, great. Thank you.

Sandra Pelletier

Great. Thanks David.

Operator

Thank you. Our next question comes from Annabel Sammy of Stifle. Your line is open.

Unidentified Analyst

Hi. This is Stacy calling in for Annabel. Thanks for taking our questions and congrats on the fourth quarter numbers. Two questions; first one is how much copay assistance was baked into the fourth quarter relative to the third quarter?

And secondly, guidance has already taken effect this year. Have you seen any evidence of benefits from access perspective, prescription trends are showing their typical first quarter patterns, which presumably shouldn't be pronounced with zero dollar copay, or would you say it's still too early to talk? Thank you.

Sandra Pelletier

Jay, do you want to take the first one?

Jay File

Yes, I'll take the first one. Yes. No, that's a great question, actually, because Q4 is an interesting kind of anomaly with our gross network. So copay assistance itself, in theory was on as kind of a full bore approach with Deacon version on technically through the entire fourth quarter of last year. However, how we forecast gross-to-net, knowing that it was turning off in January does have a positive impact on how we calculate gross debt in December. So long-story-short, we did see some lift in gross-to-net in Q4, not the majority because October and November were full blast. Q1 of this year will be the very first quarter where we have the full implementation of our adjustments to the copay program, and you'll see that reflected in our net revenue number for the quarter.

Saundra Pelletier

And then to the next question. We have already seen a list. We have. There are some small and middle plans that frankly they saw the writing on the wall, right? When this new mandate came out, they knew that it was inevitable. Now for example, some of them said, well, we update our system administratively at the beginning of the year, in the middle of the year. So we will update it in July. But the majority said, look this is inevitable. And we understand that the legislative mandate is intended to give a woman zero out of pocket pay for one product in every category. That's what the intention is under ACA. And so a lot of the plans have done it already. And so we've already seen that positive uplift.

As I said to the answer to David's previous question, there's still two big players that are culprits that we are whittling away at. But to be honest, even the conversations with them are much more positive. So we feel good that we're already seeing increased access without question already out of the gate and I also appreciate your point, too. January is always hard for any company for script growth. And – but we actually are very, very positive and optimistic that the coverage is continuing to grow, and it's just a matter of time.

Unidentified Analyst

Amazing. Thank you so much.

Saundra Pelletier

Yes. Thank you.

Operator

Thank you. Our next question comes from Ram Selvaraju of H.C. Wainwright. Your line is open.

Ram Selvaraju

Thanks so much for taking my questions and congrats on all the progress. I just wanted to know when you anticipate you might be in a position to provide some frame of reference with respect to revenue guidance for 2022. Also I wanted to see if there are specific metrics that you expect to be in a position to provide as we go further into the year pertaining to effectively commercial performance of Phexxi? And also, if you could maybe comment on with respect to those insurers who are likely to be more reluctant to are actively looking for ways to get around the guidance. If you can quantify to what extent those insurers represent XYZ percentage of covered lives that you're seeking to reach with Phexxi? Thank you.

Saundra Pelletier

Yes. Jay, do you want to talk about first the guidance?

Jay File

Yes. Sure. Ram, you might have joined the call late. We did give an idea that we are expecting 2022 net revenue to be somewhere between $30 million to $35 million for 2022.

Ram Selvaraju

Okay. Great. Thank you.

Saundra Pelletier

Yes. And then, do you want to talk about yes, like, are there any specific metrics that we're going to be giving.

Jay File

Yes. I think it's fair to say that we're going to continue to assess what makes sense to give guidance wise and metrics as the quarters go on. I wouldn't necessarily say we're not willing to give more guidance. We're continuing definitely to get a better understanding of what the commercialization is and some of the underlying metrics that are used on that. Last year was our first 12 months of the year, and now we've made some adjustments to the copay program. Not to mention the resets with insurance at the beginning of the year. So we do want to get some of a level playing field under this new kind of environment. But I think as the year goes on, we'll be much more comfortable to probably expand on some of the guidance we've been giving and try and be a little bit more insightful on some of those.

Saundra Pelletier

Yes. And Ram, to the point about these plans that are really trying to find these loopholes, I would say, look we still have about a 30% gap to get to our goal of 100% coverage. And our goal of 100% coverage is not unrealistic. I mean it's realistic, particularly because of the category, right? So the tough part for us is that United and Express Scripts do represent a lot of lives. But the interesting part is that the prior authorizations are they've become a daily part of the rep sales call, right, in the areas in which United and Express Scripts are the big players, so to speak. So although we don't like it, we want to be very transparent with the shareholders and hope, frankly, that maybe one of them are on the Board of United and Express frankly. But I don't want to seem delusional and say, "Oh, we don't think it's a huge issue". But our leadership of our sales team was at our corporate office this week. And we had a very serious come to Jesus about how difficult is it. So we know 2023, it's going to be great. And frankly, they said, "Look, these reps are so keenly focused on prior off because they know that's how they're going to get their money, how they're going to get paid". So I would tell you that we're still getting those scripts through. So I don't want to misrepresent that yes, it's not great. We wish the plans would comply with the law, and we know the way the law is intended, but we still are getting those scripts covered almost 85% of the time. There's still a percentage of the time that they're not going through, but we actually see our business growing this year. So I feel good about that.

Ram Selvaraju

Okay. And then just two other very quick ones. Firstly, with respect to the Orion collaboration, you had talked about HIV infection and some other indications. Can you elaborate on what the other indications might be?

Saundra Pelletier

Well, here's what I would tell you. Yes. So the first and foremost are looking at HIV. And so what I said or what I meant was that this product could prevent pregnancy, prevent FDIs and HIV. They're also looking at HSV. But the bigger thing with this partnership that I think is going to be most interesting is we are looking at two different delivery systems. So we're obviously looking at the gel in an applicator as it is now. But we're also looking at a thin film, almost like when you look at those [indiscernible] those Blistex that you can put on the dissolve on your tons. We're looking at a thin film vaginally applied to dissolve as the method that this new code, this new drug would be in so that we can take it all over the world, obviously.

Cost of goods, our biggest cost of goods right now is our applicator. We've actually done a great job looking at all of our costs. But if we can use this new formulation of the thin film, and we're working in combination with the inventor of Phexxi, a gentleman named Dr. Sanjay Garg, then that's what I think is going to be an incredible innovation. That's what's going to be game changing. And so really, the focus is mostly HIV. Not much other indications, it's just a way to figure out to be the first and the only product that will be able to deliver results for that.

Ram Selvaraju

Okay. And then just wanted to make sure I fully understood with respect to the business development initiatives on Phexxi outside of the United States. Can you give us kind of a sense of what direction those are heading and when you might anticipate being in a position to announce something on that front?

Saundra Pelletier

Yes. One of the reasons that the process has been slowed slightly by us is because some of the countries the contraceptive market is not as fruitful. So the U.S. is the largest market opportunity for contraception. There is just no question the profit that can be made in the U.S. So some of the markets where we've talked to partners, it's over the counter. So we really want this asset to be valued appropriately, not just with an upfront payment, with the milestones and the royalties. So some of the companies who are very interested in Phexxi, they came back to the table really doing a full market assessment to saying, yes, there's a big opportunity. But once you get chlamydia and gonorrhea infection, it's game-changing because then it's a drug. Then it gets registered differently. There's a whole different valuation system that applies to it.

So what we really found is that some of the players that can give us the most non-dilutive upfront capital and the best and most significant milestones and royalties are the ones that really want the FCI indications. And so we didn't want to give away market and just take in any money we could get for contraception and know that we would lock up those markets when we know a much bigger player with a lot more money wants to come to the table once we have our top line readout. So that's what we've really done. So we've slowed the process down a little bit. We still intend to make an announcement this year, but as you heard on the call, we are not going to release our top line data until the second half of this year, end of third, fourth quarter time line because we obviously have need to collect the data to the data all of that. So that's really the reason that we haven't made an announcement.

Now we have had ongoing parties interested in Asia Pacific and Latin America, the EU market, we've had interest, but that is one of the exact culprits I'm talking about, meaning that the contraceptive market is just not that fruitful. There is not a lot of money to be made. So the bottom line is, is there are a lot of parts interested, which we appreciate, but we think it's going to be better for the company and the shareholders, and frankly, access for women if we hold off a little bit longer until we get closer to our readout for chlamydia and gonorrhea.

Ram Selvaraju

Thank you.

Saundra Pelletier

Thanks Ram.

Operator

Thank you. Our next question comes from Jeff Hung of Morgan Stanley. Your line is open.

Jeff Hung

Thanks for taking the question. What is the refill rate been like for Phexxi? And how are you thinking about the refill rate in 2022 for your net product sales guidance? And then can you talk about the profile of women who are refilling scripts? And how that compares to what you had been expecting earlier in the launch? Thanks.

Saundra Pelletier

Yes. No, thanks for the question, Jeff. So the refill are – in December, they were 37%, which is actually a little ahead of what we expected. The one thing that we continue to say, and I know, I'm a bit with a broken record here, but the Phexxi is on demand. So I know that some people want to look at refills for other contraceptive products that are much like RINs and repeat, right? You get your pill every month because you take your pill every day and Phexxi's on demand, so entirely different. So 37% was December. We actually feel that that's going to grow. And I mean, I know this is a capinovious statement. But one of the reasons we're so interested in this young constituency that we've attracted is they're going to be on contraception a lot longer. So we're going to be able to capture these women now and hopefully have Phexxi users for the rest of their fertility years.

So the one thing that I am most excited about, frankly, is the young demographic, right? The majority of our users are under 35. When we first launched, I did get a lot of questions. Is this product just for women who live in who are in monogamous relationships and live in suburbia and have sex one day a month? No, that's definitely not the case. We actually have found this huge groundswell of young women who say there's a self – I would tell you this, there's a self-care movement that is happening. Yes, it's been happening for a while, but COVID has made it happen faster. These young women now that they're back on college campuses we get inundated with feedback from them asking if they can do study if they can – they want to do a whole health day.

Our new Head of Commercial has some very creative ideas on how we're going to target these campuses, talking about maybe having something called the shag week, which is sexual health and awareness. So the young constituency is growing and its growing 18% to 25%, as I said, is about 30%. And we really feel like those are the women that are using the products properly. They love the product, they're talking about it on social media, they're telling all their friends about it so much more than a little bit older patient profile.

So I don't know if that answers your question, but what we're seeing right now in the refills, and I know this is broad, it is the 18% to 35% that's a big range. So we're trying to capture the younger women constantly, and this is the year that we intend to do it.

Jeff Hung

Thanks. And just to clarify. So then for your net product sales guidance, are you assuming a rate higher than 37%, and is it meaningfully higher? Or is it more driven by growth in younger patients?

Saundra Pelletier

Go ahead, Jay.

Jay File

Yes. No, I wouldn't necessarily attribute it exactly to a high region rate, but we do anticipate that it's going up. Keep in mind, obviously, 2021 we're emerging out of COVID. I know everyone says it. But obviously, considering what our product is, that does get affected, then we're starting to come out of that. We think that's going to be a positive lift. And then also, too, with the new guidelines as well with those going away and impacting copays, we think that's going to be a positive lift as well. So I think by natural default. Yes, we do anticipate that will continue to grow, and that's ultimately what we're expecting to see over the next course of the year.

Jeff Hung

Thank you.

Operator

Thank you. This concludes the question-and-answer period. I'd now like to turn the call back over to Saundra Pelletier for any closing remarks.

Saundra Pelletier

In 2021, we asked investors to be patient. So that we could build our foundation of women who love Phexxi. So we could build our foundation of prescribers who will write Phexxi for them. So that we could have our DTC outreach to build a brand for Phexxi and build a brand for Evofem as the company that will continue to deliver on innovation. We understand that patients is not always a virtue. However, you have heard on this call that the wait is over. We are committed to delivering on revenue growth, improvements to gross-to-net and building our Phexxi franchise.

Much has happened since our last earnings call, and all of it is positive, all of it. Demand for Phexxi increased significantly in Q4 with 109% growth in net product sales. Our total prescriptions grew by 70% and our units shipped increased by 73%. Our total operating expenses decreased and we significantly reduced our net cash burn. We expect this will continue to trend down in 2022.

We raised $10 million in unsecured debt and obtained a $50 million equity line of credit. The federal government took a crucial step in increasing women's access to contraception without copays. We completed enrollment in the EVOGUARD trial one-month ahead of schedule. We received qualified infectious disease product designation for the prevention of chlamydia and we submitted regulatory registrations in Mexico, Nigeria and Ethiopia. And we entered into a collaboration with Orion Biosciences to explore the development of a new product candidate that could protect against unintended pregnancies, STIs and HIV.

Abraham Lincoln said things may come to those who wait, but only the things left by those who hustled. Our performance in Q4 clearly demonstrated our drive and our ability to hustle. We are confident that 2022 is going to be the year of Evofem.

Thank you so much for your time and attention.

Operator

Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect.