Earnings Transcript for AGRX - Q4 Fiscal Year 2023

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 Riley, Head of Investor Relations. Please go ahead.

Matt Riley: Hello, everyone, and welcome to today 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 Afaxys and its ability to promote growth; our product supply agreement with Nurx and its ability to make Twirla broadly available to 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 call is Al Altomari, 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 Twirla. 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, Twirla demand, and Twirla 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 will share our early impressions from the first 2 months of the first quarter of 2024 to support this. 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, Twirla demand. Twirla demand for 2023 full year as reported by Symphony was 243,841 total cycles, a 131% increase from the full year 2022. Twirla factory sales for the full year 2023, as reported by our wholesalers, was 248,220 total cycles, a 117% increase from the full year of 2022. For the full year of 2022, Twirla factory sales were 114,546. As a reminder, not all the prescription demand in retail or non-retail channels are reported to third parties like Symphony or IQVIA. The demand numbers we received from our wholesalers or factory 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 are 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 have decreased over 50%. In our view, the results represented by these key metrics is primarily attributed to the 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. Twirla demand for the fourth quarter 2023 as reported by Symphony was 68,793 total cycles, a 7% decreased from the 74,325 total cycles reported for the third quarter of 2023. Twirla factory sales for the fourth quarter of 2023 as reported by our wholesalers with 68,580, an 8% decrease from the 74,424 in the third quarter 2023. The gross-to-net charges in the fourth quarter 2023 increased primarily due to three things

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Operator: This concludes today’s conference call. Thank for your participation. You may now disconnect.