Q4 2023 Agile Therapeutics Inc Earnings Call

Participants

Matthew Riley; Head of Investor Relations, Corporate Communications; Agile Therapeutics Inc

Al Altomari; Chair & Chief Executive Officer; Agile Therapeutics Inc

Presentation

Operator

Good morning, and welcome to the Agile Therapeutics Fourth Quarter and Full Year 2023 financial results conference call. Please note, today's event is being recorded I would now like to turn the conference over to Matt Reilly, Head of Investor Relations. Please go ahead.

Matthew Riley

Hello, everyone, and welcome to today's conference call to discuss our fourth quarter and full year 2023 financial results and corporate update.
Before we start, let me remind you that today's call will include forward-looking statements based on our current expectations, including statements concerning our financial outlook and financing prospects for the future, management's expectations for our future financial and operational performance, including our expectations regarding the market growth of Twirla and our ability to become cash flow positive, our operating expenses, our business strategy, our partnership with faxes and its ability to promote growth, our product supply agreement with Murex and its ability to make Twirla broadly available patients, the future availability of no-cost access to Twirla under federal law and our assessment of the combined hormonal contraceptive market, generally 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 Further, during the course of today's call, we will refer to certain non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in our press release issued today, which can be found on the Investor Relations section of our website. Please refer to our filings with the SEC, which are available through the Investor Relations section of the 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 is not sufficient for prescribing decisions.
Please note that we will not be conducting a Q&A session following our prepared remarks. Joining me on today's call is Alex Marie, Agile Therapeutics, Chair and Chief Executive Officer.

Al Altomari

Thank you very much, Matt, and thank you all for joining us today on our call. 2023 was a year for Agile Therapeutics. That we believe demonstrated our ability to continue to grow forward.
This time.
Last year, we were fielding questions from investors and analysts about the sustainability of our 2022 growth and performance moving forward, we believe we've answered the sustainability questions in 2023 by once again demonstrating meaningful year over year growth in net revenue for oil demand and for our factory sales while simultaneously reducing operating expenses to support our target revenue growth.
Today, I will review our 2023 full year growth metrics and then dive into the fourth quarter 2023 performance, which admittedly did not meet our expectations. We believe the fourth quarter represents an anomaly in our growth story, and I would share our early impressions from the first two months of the first quarter of 2024 to support them first, 2023 net revenue. Net revenue for full year 2023 was 19.6 million, which represents an 80% increase from the $10.9 million reported for full year 2022. Our 2023 net revenue reflects improvements in the following key areas. First, world demand total demand for 2023 full year as reported by Symphony was 243,841 total cycles a 131% increase from a full year 2022 thriller factory sales for the full year 2023, as reported by our wholesalers was 248,220 total cycles of 117% increase from the full year of 2022. For the full year 2022, Twirla factory sales were 114,546. As a reminder, not all the prescription demand and retail or non-retail channels are reported to third parties like since they are QBO. The demand numbers we receive from our wholesalers refractory sales do include the broader scope of the retail and non-retail sales. And therefore, we believe factory sales more closely represents the total demand for Twirla across all our channels, net revenue, demand and factory sales, our all key components of our overall growth plan. We are simultaneously managing our operating expenses to align with supporting the growth. As we think you'll see from our results, we were disciplined in managing our spending once again in 2023. Operating expenses for full year 2023 were $30.5 million, which represents a 33% decrease from the $45.5 million reported for the full year 2022, comparing our full year 2021 results. Against the full year 2023 full year net revenue has grown nearly 400% while full year operating expenses it decreased over 50%. In our view, the results represented by these key metric is primarily attributed to reengineering of our business plan as a commercial company that focuses on leveraging external partnerships while keeping our internal infrastructure, lean and efficient.
Next, our fourth quarter 2023 performance, we remain confident in our ability to execute our business plan and believe that our lean commercial platform can continue to produce strong results through 2024. With that said, we did experience a different performance during the fourth quarter of 2023, but I'll explain why we're confident that this was an anomaly and not the new normal fourth quarter 2023 net revenue was 3.6 million, a 46% decrease from the $6.7 million reported for the third quarter 2023. Total demand for the fourth quarter 2023, as reported by Symphony, was 68,793 total cycles, a 7% decrease from the 74,325 total cycles reported for the third quarter of 2023 for all of factory sales for the fourth quarter of 2023, as reported by our wholesalers was 68,580, an 8% decrease from the 74,004 and 24 in the third quarter of 2023. The gross to net changes in the fourth quarter 2023 increased primarily due to three things first increased activity in our Medicaid business, second, an increase in our overall returns reserve.
Third, a larger mix of non-retail business. Operating expenses for the fourth quarter of 2023 were 5.5 million, which represented a 33% decrease from the $8.2 million in the third quarter of 2023, primarily due to our decision to forego bonuses for all of 2023 for all employees, including management. I'd mention that we believe the dip in the fourth quarter 2023 performance was an aberration or in our growth story. We believe this is because we've already started to see NUMBERS rebound in the first quarter of 2024. Our preliminary total and January demand numbers show that we achieved the highest number of retail channel cycles in a single month since launch. Additionally, January was our second largest month for total cycles since launch pool of demand appears to be growing in February as well. While February total demand was not quite as high as January February, as demand was larger than any single month in the fourth quarter. Of 2023 in both retail and total cycles. We continue to believe in our business model and its emphasis on partnerships to maximize flows growth potential 2024 is a pivotal year for both the Company and the brand. And we will explore any and all strategic opportunities, both internally and externally as we seek to maximize Twirla growth and increased shareholder value.
To that end, I'll touch on several relevant corporate updates. First, the elimination of debt owed to Perceptive Advisors. Earlier this month, we announced the payoff of the remaining debt owed to Perceptive Advisors. This was a significant milestone for us, and we believe the flexibility this provides on our balance sheet will support our readiness to embrace and explore new opportunities while we continue to execute our business plan and growth Horlicks. Once again, we'd like to thank our partners at Perceptive to work collaboratively with us, especially during the challenging market environment. For biotechnology. Earlier this week, we announced we received a final delisting notice from NASDAQ due to our failure to regain compliance with their minimum stockholders' equity requirement as of March 26th, 2020 for the Company's common stock is now trading on the over-the-counter market, which is operated by the OTC markets groups under our existing AG. Rx trading symbol. We do not expect this transition to OCC to impact our business operations and remain focused on executing our business plan while continuing to explore strategic opportunities.
Now I'd like to talk about the Affordable Care Act. We remain optimistic about the steps being taken by the Biden administration to enhance access to no-cost contraception most recently in January 2020 for the Biden Harris administration announced new guidelines, so enable expanded access to all FDA approved contraceptives without costs following ongoing focus by the Biden administration and lawmakers on contraception and the widespread barriers to reproductive health care, the Department of Labor, Health and Human Services and treasury jointly released frequently asked questions or FAQs. In January 2024, the FAQs outlines a new pathway, which plans and assures to meet existing obligations under the federal law by covering at no cost, a broader range of FDA approved contraceptive drugs and certain reproductive devices. This pathway comes after reports of many plans and insurers imposing ongoing barriers to no cost contraceptive coverage. Implementation of new guidance could eliminate financial barriers for contraceptive products like Twirla for approximately 49 million women While there are no new updates since January 2024 guidance, we believe this development is promising for our continued growth.
Before concluding today's call, I will provide an updated snapshot of our current financial situation and outlook for 2024, you can see a full description of our financial results for the fourth quarter and full year 2023 in our press statements and our annual report on Form 10 K. And I'd like to take a minute to comment on a few of the other financial results, which we believe also demonstrates progress in 2023. We continued to narrow our losses in 2023. We closed out full year 2023 with a net loss of 14.5 million to a net loss of 25.4 million for a comparable period in 2022. We ended 2023 with 2.5 million of cash on hand in January 2024, we raised $4.8 million in gross proceeds proceeds through a warrant exchange agreement with a holder of our warrants. We will continue to evaluate all options to finance the company. Additionally, we are exploring a broader range of opportunities that could benefit our business, including business development opportunities and or other strategic transactions. We believe the performance of our business and its ability consistently growth formula, solidifying Agile's credibility as a potential partner in business development and other strategic transactions discussion. We will continue to explore any and all opportunities as we seek to grow Twirla and shareholder value.
This will conclude today's call, and we could encourage everyone to stay tuned for additional updates related to Agile Therapeutics and Twirla. Thank you again for joining us for this call and following us along.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.