Traders News Source Editor, Mark Roberts Interviews Evofem Biosciences, Inc. (NASDAQ: EVFM) CEO Saundra Pelletier
Chief Executive Officer and interim Chair of the Board
Saundra thank you giving us your time to answer some questions.
EVFM recently completed a reverse split followed by a public offering to raise cash. Can you tell us how many common shares are outstanding today?
Yes, we recently completed an underwritten public offering that raised $26.6 million in gross proceeds. Importantly, this raise extends the cumulative net revenue covenant under Evofem’s secured note agreement. We currently have 46.5 million shares outstanding.
What is the company’s cash level today, and beyond operations what will EVFM do with the cash?
We closed the first quarter with $2.8 million in cash and cash equivalents plus $4.2 million in restricted cash as of March 31, 2022. Gross proceeds of the public offering were $26.6 million, and we are being mindful of how we allocate this capital as we work to contain costs and extend our runway as long as possible. This is in keeping with our stated goal of significantly reducing our operating expenses in 2022. We are focusing spend on areas of the business that we believe will fuel future growth, specifically driving Phexxi revenues and completing our Phase 3 EVOGUARD trial evaluating Phexxi for the prevention of chlamydia and gonorrhea in women. This registrational trial will readout early this fall, with costs declining as women exit the study.
What is your perspective on the female contraceptive market now and in the future?
The female contraceptive market is definitely changing for the better. Since the FDA approval and launch of Phexxi in 2020, women have an important new option for contraception – one that is hormone-free, controlled by the woman, and used only when she needs it. Phexxi is the first new contraceptive innovation in decades, with a unique mechanism of action as a vaginal pH modulator. Because Phexxi contains no hormones, it does not cause the side effects that many women suffer as a result of using hormonal contraception, such as weight gain, moodiness and loss of libido. Approximately 30% of women switching to Phexxi were previously using the hormonal pill, patch or ring.
Contraceptive access has been impacted by the insurance landscape in the U.S., and here too we are seeing positive change. In January 2021, the U.S. Department of Labor and Health Resources and Services Administration updated contraceptive guidelines to ensure women have access to all FDA-approved contraceptives, including Phexxi, at zero copay under the Affordable Care Act. We believe these new guidelines make it clear to insurers that barriers to access such as step edits, claim denials, and prior authorization letters must end. Elected officials in the House and the Senate continue to call for heightened enforcement and adherence to the new guidelines. We look forward to the day when every woman has access, at no out-of-pocket cost, to the FDA-approved contraceptive that she and her healthcare provider have decided is the best method for her.
The FDA has extended the shelf life of Phexxi from three to four years. How does that impact the company?
This shelf-life extension provides a significant and valuable operational efficiency. It allows us to better manage inventory within the growing U.S. market. Also, as we expand to take Phexxi into ex-U.S. markets through licensing agreements, we gain overall inventory stability especially in LMIC countries we expect to enter in under our agreement with Adjuvant Capital.
How, specifically, will a successful conclusion to the Phase III EVOGUARD trial impact EVFM?
We expect positive data from this registrational Phase 3 trial, which we will report by the end of October, will have a very meaningful impact on the stock. Positive data would enable FDA submissions in the first half of 2023 to expand the Phexxi label for two potential new indications – the prevention of chlamydia in women, and the prevention of gonorrhea in women.
The CDC estimates there are 4 million new cases of chlamydia infections, and 1.6 million new gonorrhea infections annually in the United States, which correlates to $962 million in direct medical costs.
According to the CDC, every sexually active person is at risk of catching these common infections. Right now, the choices to prevent these STIs are condoms or abstinence. Around the world, public health experts and advocates are highlighting the need for new preventative measures. Given that chlamydia is the leading cause of infertility and gonorrhea is increasingly resistant to antibiotics, we expect an FDA-approved preventive measure will be well received.
Once the submissions are accepted for filing, we expect a six-month review because we have fast track and QIDP designation for Phexxi for both diseases. Accordingly, with positive data we will be preparing to launch Phexxi for prevention of chlamydia and gonorrhea in women in late 2023. We expect approval in these new indications would significantly increase the global addressable market opportunity for Phexxi.
Are there any plans for an advertising campaign, on a national scale, to raise consumer awareness for Phexxi?
In September 2021, we launched a national direct-to-consumer (DTC) advertising campaign with Emmy-Award winning actress Annie Murphy designed to broaden awareness and drive uptake of Phexxi. This “House Rules” campaign has significantly raised our target audience awareness of Phexxi, while also driving women to their healthcare provider (HCP) to request a sample. It has also helped drive significant increases in new HCPs recommending and prescribing Phexxi.
This ongoing year-long campaign was a key contributor to the substantial Phexxi growth in the second half of 2021, alongside the ongoing work of our sales force with OB/GYNs, nurse practitioners and midwives. We continue to leverage the “House Rules” assets, and for 2022 have shifted our DTC strategy toward digital channels such as streaming, and other social media-based approaches versus broad awareness tactics, like television.
We have other DTC initiatives in the works for 2022 to more directly reach our target consumer audience and look forward to discussing these closer to roll-out.
Can you talk about how and when the relationship with Bora will impact the company?
The Bora agreement is part of Evofem’s efforts to reduce spend and continue to improve gross margin. We expect that our relationship with Bora will decrease our cost of goods by 45% related to manufacturing, packaging, and testing of Phexxi.
We initiated technical transfer activities in the second quarter of 2022, and we expect that Bora will begin manufacturing Phexxi toward the end of this year. Initially they will manufacture for ex-U.S. nations where Phexxi is currently under regulatory review, including Mexico and Nigeria.
Which aspect of your company makes you enthusiastic?
There are moments in time when categories change forever. That is happening now in the category of birth control. Women are demanding a better quality of life including safe and effective contraception without subjecting their bodies to exogenous hormones every day. We have the solution for the problem that 50% of the world is facing. Men have had access to sex on demand for over 150 years by using a condom to prevent pregnancy and sexually transmitted infections. Women now have an equal opportunity with our product Phexxi.
What do you think is the biggest strength of EVFM right now?
Evofem’s biggest strength is a truly unique asset that we believe will address multiple unmet needs for women in several different therapeutic categories that will all deliver significant shareholder return. Phexxi is the first and only birth control with no hormones. Women use it only when they have sex, versus a synthetic hormonal birth control method – the pill, patch, ring or IUD – which women must use every day, when we all know that women do not have sex every day. Our product is so innovative that we expect to expand its label to include the prevention of chlamydia and gonorrhea; with positive outcomes of our Phase 3 trial and FDA approval, we expect Phexxi will be the first and only product in the world indicated to prevent the two most serious sexually transmitted infections.
What does your company do well?
Our company understands our key customers – the woman, the OB/GYN, the nurse practitioner and the midwife. This allows us to deliver the right message, in the right way, to influence behavior that delivers results. Our team are experts in women’s healthcare.
Thank you for your time Saundra.
The Traders News Team
Additional Information About Evofem:
Evofem Biosciences Inc., (Nasdaq: EVFM) is a commercial San Diego-based biotech company focused on empowering women through innovation in women’s sexual and reproductive health. We developed and market Phexxi, the first and only FDA-approved, non-hormonal, on demand birth control method that women only use when they have sex and never when they don’t.
Because Phexxi is an innovative non-hormonal contraceptive, it is not associated with side effects like depression, weight gain, headaches, mood swings and irritability. Taking hormones may not be right for some women especially for those with certain medical conditions including clotting disorders and cancer, or when they are breast feeding or have a BMI over 30, smoke, have diabetes and hormones lower women’s libido. SO, the very thing we have been taking to have sex, makes us not want to do it in the first place. More than 23M women in the U.S. do not want to get pregnant and will not use a hormonal contraceptive, so the unmet need for an innovation like Phexxi is significant. I was diagnosed with stage III breast cancer in 2018 due to using hormonal birth control for 15 years and after many surgeries, chemo and the experience of being bald and now flat (humbling and oddly gratifying), I am still fighting for women to have sex on demand, to protect themselves from STIs just like men have had condoms for 150 years. There are many who would find pleasure in my failure but also those who believe change is not only coming, but the world is better when women rise and feel good about themselves!
In Sept 2021 we launched our DTC campaign with Emmy award-winning actress Annie Murphy (from Schitt’s Creek fame) to generate awareness of Phexxi, while also highlighting the contraceptive journey of millions of women, like Annie, who are tired of dealing with the side effects of hormones in their birth control. If you have not seen the commercial and Annie’s testimonial, I hope you will take a moment to view them at: https://www.youtube.com/c/phexxi
We are also expanding Phexxi’s label to include two potential new indications – the prevention of chlamydia and gonorrhea in women. There are no FDA-approved prescription products to prevent infection with either of these pathogens. We just completed enrollment in our registrational Phase 3 STI trial and will announce top-line data this fall. We are planning for FDA submissions in early 2023 and expect to hear back on approval within 8 months.
Chlamydia and gonorrhea are the most commonly-reported sexually transmitted infections in the U.S. and every day, more than 1 million new cases of STIs are acquired worldwide among people aged 15-49 years. Untreated chlamydia can result in long-term reproductive problems and is the leading cause of infertility in women. Assuming FDA approval, Phexxi will be the first and only prescription product approved for the prevention of pregnancy, chlamydia and gonorrhea infections.