TherapeuticsMD, Inc. (NASDAQ: TXMD) is an innovative healthcare company focused on developing and commercializing products exclusively for women. With its SYMBODA™ technology, TherapeuticsMD is developing advanced hormone therapy pharmaceutical products to enable delivery of bio-identical hormones through a variety of dosage forms and administration routes.
In October, 2017, TXMD switched from a NYSE listing to a listing on the NASDAQ exchange. The ticker symbol remains the same.
The company last released its quarterly earnings results on Thursday, August 3rd. The company reported ($0.10) EPS for the quarter, exceeding analysts’ consensus estimates of ($0.11) by $0.01. The analyst expects the company to report earnings of ($0.09) per share for the current fiscal quarter. The company is expected to release its Q3 earnings report on, or about, November 2, 2017.
Several equities research analysts recently issued favorable reports on TXMD shares. Cantor Fitzgerald restated an “overweight” rating and set a $33.00 price objective on shares of TXMD on, August 15th. Morgan Stanley initiated coverage on, September 8th. They set an “equal weight” rating and a $6.00 target price. Jefferies Group LLC reaffirmed a “buy” rating and set a $15.00 target price on, August 11th. Oppenheimer Holdings, Inc. set a $10.00 target price and gave a “buy” rating on, October 16th. The company currently has an average rating of “Buy” and an average price target of $15.
The company has developed an asset called TX-004HR, which is for the treatment of moderate-to-severe vaginal pain during sexual intercourse (dyspareunia), a common symptom of vulvar and vaginal atrophy (VVA) caused due to menopause. It submitted the data to the FDA as part of a New Drug Application (NDA). However, the agency responded with a Complete Response Letter (CRL) detailing the fact that it required some long-term safety data before approval could be granted.
Subsequently, TherapeuticsMD collected the data and had already resubmitted it. On November 3, TXMD will sit down with the FDA as part of a type A meeting and will understand whether the data it has collected would be enough for approval or whether TherapeuticsMD will have to carry out additional trials to collect the information it needs.
If the concerned authorities accept data as is, TherapeuticsMD is likely to surge in anticipation of a near-term approval. On the flip side, If the FDA requires further data, TherapeuticsMD is very likely to still pick up an approval, but it’s going to have to spend some money conducting trials before it does.
Furthermore, there’s abundant historical data already available that signals to the long-term safety and viability of this sort of asset and there doesn’t look to be any material reason why TherapeuticsMD won’t be able to get the asset approved eventually.
The company recently announced the closing of its previously announced underwritten public offering of 12.4 million shares of its common stock.
At closing, TherapeuticsMD received net proceeds from the offering of approximately $68.5 million. The company intends to use a majority of the net proceeds from the offering to fund pre-commercialization and commercialization activities for TX-004HR and TX-001HR. As a result of this dilution, there has been some loss of investor confidence, which potentially contributed to the recent price drop (The stock price has dropped since the secondary offering; >20%)
Notwithstanding this dilution, the analysts believe that the overall fundamental remains intact for the company. It’s just that the stock price tends to fall when a capital raise is announced. Also, for an early stage biotech company like this, with high cash burn rate and limited financing options, a secondary offering is often inevitable.
Markets are now looking to the upcoming quarterly result and the potential upside catalyst for the company and, if this news hits press favorably, the stock of the company will be on a rapid growth trajectory. Even if it misses, the subsequent dip in share price will serve as an option to make a position for the eventual upside run.
About the company: TherapeuticsMD, Inc. is an innovative healthcare company focused on developing and commercializing products exclusively for women. With its SYMBODA™ technology, TherapeuticsMD is developing advanced hormone therapy pharmaceutical products to enable delivery of bio-identical hormones through a variety of dosage forms and administration routes.
The company’s late-stage clinical pipeline includes two phases 3 product candidates:
- TX-001HR for treatment of moderate-to-severe vasomotor symptoms (VMS) due to menopause and;
- TX-004HR for treatment of moderate-to-severe vaginal pain during sexual intercourse (dyspareunia), a symptom of vulvar and vaginal atrophy (VVA) due to menopause.
The company also manufactures and distributes branded and generic prescription prenatal vitamins under the vitaMedMD® and BocaGreenMD® brands.
About Vulvar and Vaginal Atrophy (VVA): An estimated 32 million women in the United States are currently suffering from symptoms of VVA, and only 2.3 million (7 percent) are currently being treated with prescription therapy. VVA symptoms can range from mild to severe and include dyspareunia, vaginal dryness, urinary tract infections, and vaginal bleeding associated with sexual activity. Vaginal dryness and dyspareunia are considered the most bothersome symptoms of VVA. Because of the chronic nature of VVA due to menopause, its symptoms will not likely resolve without intervention.
- Multi-Billion Dollar Total Substitutable Market Opportunity. If approved, TX-001HR can provide a single pill solution for women and physicians who:
- Demand an FDA-approved bio-identical combination hormone product
- Do not trust compounded hormones
2nd Quarter 2017 Financial Results:
Net revenue from the company’s prescription prenatal vitamin business was approximately $4.3 million for the second quarter of 2017 compared with net revenue of approximately $4.4 million for the prior year’s quarter. These changes were primarily due to a decrease in the number of units sold.
Cost of goods sold was approximately $0.7 million for the second quarter of 2017, compared with approximately $1.1 million for the prior year’s quarter.
Net loss for the second quarter of 2017 was approximately $19.7 million, or $0.10 per basic and diluted share, compared with approximately $21.1 million, or $0.11 per basic and diluted share, for the second quarter of 2016.
At June 30, 2017, cash on hand was approximately $96.5 million, compared with approximately $131.5 million at December 31, 2016.
Key risk factors and potential stock drivers:
The company is optimistic about the positive outcome of the November 3 meeting. This meeting will be a critical catalyst for the company going forward.
The outcome of the upcoming milestones/catalysts could be the near-term trigger for the company. Any non-favorable developments could impinge the business and financial risk profile of the company.
TXMD may not be able to successfully develop, launch and commercialize TX-004 or any other potential future development programs.
Debt financing terms will play a significant role in the likelihood of further dilution. If the terms of the loan are unfavorable, management might potentially resort to the equity markets once again as the source of financing.
The company may experience financial, regulatory, or operational difficulties, which may impair its ability to commercialize their drug products. In fact, in the past, markets sold off on TherapeuticsMD heavily when the FDA issued the CRL to the company.
On Wednesday, October 25th, 2017, in intra-day trading, TXMD was at $5.00 (-1.4%) on volume of 833K shares exchanging hands. Market capitalization is $1.08 billion. The current RSI is 42.08
In the past 52 weeks, shares of TXMD have traded as low as $3.50 and as high as 8.30
At $5.00, shares of TXMD are trading below its 50-day moving average (MA) at $5.69 and below its 200-day MA at $5.58 as well.
The present support and resistance levels for the stock are at $4.89 & $5.12 respectively.
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