What changed in this filing

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Item 1. Business

2023-04-07 compared with 2022-03-23 · 190 added, 504 removed, 257 unchanged (73% of the section changed)

Throughout this Annual Report on Form 10-K (“2021 10-K Report”), the terms “we,” “us,” “our,” “TherapeuticsMD,” “the Company,” or “our company” refer to TherapeuticsMD, Inc., a Nevada corporation, and unless specified otherwise, include our wholly owned subsidiaries vitaMedMD, LLC, a Delaware limited liability company (“vitaMed”), BocaGreenMD, Inc., a Nevada corporation (“BocaGreen”), and vitaCare Prescription Services, Inc., a Florida corporation (“vitaCare”).

TherapeuticsMD owns or has rights to trademarks, service marks, or trade names that are used in connection with the operation of its business including TherapeuticsMD ® , vitaMedMD ® , BocaGreenMD ® , vitaCare TM , ANNOVERA ® , BIJUVA ® , and IMVEXXY ® , which are protected under applicable intellectual property laws and are the property of, or licensed to, the Company.

Throughout this Annual Report on Form 10-K (“2022 10-K Report”), the terms “we,” “us,” “our,” “TherapeuticsMD,” “the Company,” or “our company” refer to TherapeuticsMD, Inc., a Nevada corporation, and unless specified otherwise, include our wholly owned subsidiaries vitaMedMD, LLC, a Delaware limited liability company (“vitaMed”), and BocaGreenMD, Inc., a Nevada corporation (“BocaGreen”).

TherapeuticsMD owns or has rights to trademarks, service marks, or trade names that were previously used in connection with the operation of its business, or are now licensed by another party, including TherapeuticsMD ® , vitaMedMD ® , BocaGreenMD ® , vitaCare TM , BIJUVA ® , and IMVEXXY ® , which are protected under applicable intellectual property laws and are the property of the Company.

This 2022 10-K Report also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners.

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These forward-looking statements involve substantial risks and uncertainties.

For example, statements regarding our operations, financial position, business strategy, product development, and other plans and objectives for future operations, and assumptions and predictions about future product development and demand, research and development (“R&D”), marketing, expenses and sales are all forward-looking statements.

For example, statements regarding our operations, financial position, business strategy, and other plans and objectives for future operations, and assumptions and predictions about future demand, marketing, expenses and sales are all forward-looking statements.

These statements may be found in the items of this 2022 10-K Report entitled “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in this 2022 10-K Report generally.

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Actual results or experience may differ materially from those expected or anticipated in the forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, our liquidity requirements, competition from other businesses, market and general economic factors, and the other risks discussed in Item 1A of this 2021 10-K Report.

Factors that could cause or contribute to such differences include, but are not limited to, competition from other businesses, market and general economic factors, and the other risks discussed in Item 1A of this 2022 10-K Report.

This discussion should be read in conjunction with the consolidated financial statements and notes thereto included in t his 2022 10-K Report .

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We do not undertake to update any forward-looking statements or to publicly announce the results of any revisions to any statements to reflect new information or future events or developments.

TherapeuticsMD is a women’s healthcare company with a mission of creating and commercializing innovative products to support the lifespan of women from pregnancy prevention through menopause.

At TherapeuticsMD, we combine entrepreneurial spirit, clinical

expertise, and business leadership to develop and commercialize health solutions that enable new standards of care for women.

Our solutions range from a novel patient-controlled, procedure free, long-lasting contraceptive to advanced U.S.

Food and Drug Administration (“FDA”) approved bio-identical hormone therapy pharmaceutical products for the treatment of vasomotor symptoms and dyspareunia .

We also have a portfolio of branded and generic prescription prenatal vitamins under the vitaMedMD and BocaGreenMD brands that furthers our women’s healthcare focus.

Our portfolio of products focused on women’s health allows us to efficiently leverage our sales and marketing plans to grow our recently approved products.

Beginning in 2018, the FDA approval of our pharmaceutical products transitioned our company from predominately focused on conducting R&D to one focused on commercializing our pharmaceutical products.

In July 2018, we launched our FDA-approved product IMVEXXY (estradiol vaginal inserts) for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy, or VVA, due to menopause, which was approved by the FDA in May 2018.

In April 2019, we launched our FDA-approved product BIJUVA (estradiol and progesterone) capsules, our hormone therapy combination of bioidentical 17ß-estradiol and bio-identical progesterone in a single, oral softgel capsule, for the treatment of moderate-to-severe vasomotor symptoms, or VMS, due to menopause in women with a uterus, which was approved by the FDA in October 2018.

In October 2019, we began a “test and learn” market introduction for our FDA-approved product ANNOVERA (segesterone acetate and ethinyl estradiol vaginal system), the first and only annual patient-controlled, procedure-free, reversible prescription contraceptive option for women, which was approved by the FDA in August 2018 and which we have licensed for commercialization in the U.S.

pursuant to an exclusive license agreement (the “Population Council License Agreement”) with the Population Council, Inc.

(the “Population Council”).

We paused the full commercial launch of ANNOVERA in March 2020 due to the impact of the COVID-19 pandemic and resumed this initiative in July 2020.

We have also entered into license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S.

TherapeuticsMD was previously a women’s healthcare company with a mission of creating and commercializing innovative products to support the lifespan of women from pregnancy prevention through menopause.

In December 2022, we changed our business to become a pharmaceutical royalty company, primarily collecting royalties from our licensees.

Our Company is no longer engaging in research and development or commercial operations and is transforming to a virtual company with limited infrastructure.

On December 30, 2022 (the “Closing Date”), the Company completed a transaction (the “Mayne Transaction”) with Mayne Pharma LLC, a Delaware limited liability company (“Mayne Pharma”) and subsidiary of Mayne Pharma Group Limited, an Australian public company, pursuant to which the Company and its subsidiaries (i) granted Mayne Pharma an exclusive license to commercialize the Company’s IMVEXXY, BIJUVA and prescription prenatal vitamin products sold under the BocaGreenMD® and vitaMedMD® brands (collectively, the “Licensed Products”) in the United States and its possessions and territories, (ii) assigned to Mayne Pharma the Company’s exclusive license to commercialize ANNOVERA ® (together with the Licensed Products, collectively, the “Products”) in the United States and its possessions and territories, and (iii) sold certain other assets to Mayne Pharma in connection therewith.

Pursuant to a License Agreement, dated December 4, 2022, between the Company and Mayne Pharma (the “Mayne License Agreement”), the Company granted Mayne Pharma, on the Closing Date, (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and commercialize the Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization in the United States and its possessions and territories.

Pursuant to the Mayne License Agreement, Mayne Pharma will make one-time, milestone payments to the Company of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million.

Further, Mayne Pharma will pay to the Company royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years following the Closing Date.

The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United States.

Mayne Pharma will pay to the Company minimum annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below (the “Minimum Annual Royalty”).

Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed Products.

Pursuant to a Transaction Agreement, dated December 4, 2022, between the Company and Mayne Pharma (the “Transaction Agreement”), the Company sold to Mayne Pharma, at closing, certain assets for Mayne Pharma to commercialize the Products in the United States, including the Company’s exclusive license from the Population Council to commercialize ANNOVERA (the “Transferred Assets”).

The total consideration from Mayne Pharma to the Company for the purchase of the Transferred Assets and the grant of the licenses under the Mayne License Agreement was (i) a cash payment of $140.0 million at closing, (ii) a cash payment of approximately $12.1 million at closing for the acquisition of net working capital as determined in accordance with the Transaction Agreement and subject to certain adjustments, (iii) a cash payment of approximately $1.0 million at closing for prepaid royalties in connection with the Mayne License Agreement Amendment (as defined below) and (iv) the right to receive the contingent consideration set forth in the Mayne License Agreement, as amended.

On the Closing Date, the Company and Mayne Pharma entered into Amendment No.

1 to the Mayne License Agreement (the “Mayne License Agreement Amendment”).

Pursuant to the Mayne License Agreement Amendment, Mayne Pharma agreed to pay the Company approximately $1.0 million in prepaid royalties on the Closing Date.

The prepaid royalties will reduce the first four quarterly payments that would have otherwise be received pursuant to the Mayne License Agreement by an amount equal to $257,250 per quarterly royalty payment plus interest calculated at 19% per annum accruing from the Closing Date until the date such quarterly royalty payment is paid to the Company.

In addition, the parties agreed that Mayne Pharma will reduce one quarterly royalty payment (other than the first quarterly royalty payment) otherwise payable to the Company by $1.5 million in consideration of Mayne Pharma assuming the Company’s obligations under a long-term services agreement, including the Company’s minimum payment obligations thereunder.

This action represented a shift in our business and therefore, the related assets and liabilities associated with commercial operations are classified as discontinued operations on our consolidated balance sheets and the results of operations have been presented as discontinued operations within our consolidated statements of operations and comprehensive income (loss) for all periods presented.

See Note 2 - Discontinued Operations to the consolidated financial statements included in this Annual Report on Form 10-K for further details.

The Company also has license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S.

In July 2018, we entered into a license and supply agreement (the “Knight License Agreement”) with Knight Therapeutics Inc.

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In 2021, Theramex secured regulatory approval for BIJUVA in certain European countries and began commercialization efforts in those countries.

In connection with the Company’s transformation into a pharmaceutical royalty company, the termination of our executive management team (except for Mr.

Marlan Walker, our former General Counsel and current Chief Executive Officer) and all other employees was completed by December 31, 2022.

Severance obligations for all employees other than executive officers were paid in full in the first quarter of 2023 and severance obligations for terminated executive officers will be paid in accordance with their employment agreements and separation agreements as previously disclosed.

As of December 31, 2022, we employed one full-time employee primarily engaged in an executive position.

We have engaged external consultants, including certain former members of our management team, who support our relationship with current partners and assist with certain financial, legal and regulatory matters and the continued wind-down of our historical business operations.

vitaCare divestiture

On March 6, 2022, we entered into a stock purchase agreement (the “Purchase Agreement”) with GoodRx, Inc.

(“GoodRx”), a Delaware corporation and wholly-owned subsidiary of GoodRx Holdings, Inc.

(“GoodRx Holdings”), which provides for the sale of all of the issued and outstanding capital stock of vitaCare to GoodRx (the “vitaCare Divestiture”).

Under the terms of the Purchase Agreement, upon the closing of the vitaCare Divestiture (the “Closing”), we will receive a cash payment of $150.0 million, subject to adjustment as provided in the Purchase Agreement and customary holdbacks.

In addition, we may receive up to an additional of $7.0 million in earn-out consideration, contingent upon vitaCare’s financial performance through 2023 as determined in accordance with the terms of the Purchase Agreement.

On April 14, 2022, we completed the divestiture of vitaCare Prescription Services, Inc.

(“vitaCare”) with the sale of all vitaCare’s issued and outstanding capital stock (the “vitaCare Divestiture”).

We received net proceeds of $142.6 million, net of transaction costs of $7.2 million, and we recognized a gain on sale of business of $143.4 million.

Included in the net proceeds amount was $11.3 million of customary holdbacks as provided in the stock purchase agreement (the “Purchase Agreement”), which is recorded as restricted cash in the consolidated balance sheets.

The restricted cash was held by an escrow agent and was released to us in March 2023.

Additionally, we may receive up to an additional $7.0 million in earn-out consideration, contingent upon vitaCare’s financial performance through 2023 as determined in accordance with the terms of the Purchase Agreement.

We will record the contingent consideration at the settlement amount when the consideration is realized or realizable.

The Purchase Agreement contains customary representations and warranties, covenants, and indemnities of the parties thereto.

In addition, the Purchase Agreement provides that at the Closing:

(i) we will enter into a long-term services agreement with vitaCare to continue utilization of the vitaCare platform with respect to our products;

(ii) we and vitaCare will enter into a transition services agreement for us to provide certain transition services to vitaCare for up to 12 months following the Closing;

and (iii) certain employees of ours and/or vitaCare will enter into employment agreements with GoodRx,

The vitaCare Divestiture is expected to close in the second quarter of 2022, subject to the satisfaction or waiver of certain customary conditions, including the receipt of certain regulatory approvals.

The commitments under a long-term services agreement related to vitaCare was transferred to Mayne Pharma as part of the Mayne Transaction.

In addition, under the Mayne License Agreement Amendment, Mayne Pharma will reduce one quarterly royalty payment (other than the first quarterly royalty payment) otherwise payable to us by $1.5 million in consideration of Mayne Pharma assuming our obligations under the long-term services agreement related to vitaCare.

The pre-divesture operations of vitaCare were reclassified to discontinued operations in December 2022 when the Company transitioned to becoming a royalty company and licensing its products to Mayne Pharma.

The impact of COVID-19 on our business

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The extent of the future impact of the COVID-19 pandemic on our business continues to be highly uncertain and difficult to predict.

The ultimate global recovery

from the pandemic will be dependent on, among other things, actions taken by governments and businesses to contain and combat the virus, including any variant strains, the speed and effectiveness of vaccine production and global distribution, as well as how quickly, and to what extent, normal economic and operating conditions can resume on a sustainable basis globally.

Since the early phase of the COVID-19 pandemic, we have been using substantial virtual options to ensure business continuity.

We have also worked with independent community pharmacies and multiple third-party online pharmacies and telemedicine providers that focus on contraception or menopause which provide patients real-time access to both diagnosis and treatment.

We continue to support prescribers’ needs with samples and product materials through our sales force.

If access is restricted, we have mailing options in place for these materials.

We also have business continuity plans and infrastructure in place that allows for live virtual e-detailing of our products.

The full impact of the COVID-19 pandemic continues to evolve.

However, we remain committed to the execution of our corporate goals, despite the ongoing COVID-19 pandemic, as demonstrated in part by the increase in product revenue throughout 2021.

The future extent to which the COVID-19 pandemic may continue to materially impact our financial condition, liquidity, or results of operations remains uncertain.

We are continuing to assess the effect of the COVID-19 pandemic on our operations by monitoring the spread of COVID-19 and the various actions implemented to combat the pandemic throughout the world.

As of the date of the filing of this Annual Report, the future extent to which the COVID-19 pandemic may continue to materially impact our financial condition, liquidity, or results of operations remains uncertain and difficult to predict.

Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.

While we currently believe that our COVID-19 contingency plan has the ability to mitigate many of the negative effects of the COVID-19 pandemic on our business, the severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic, the duration of “social distancing” orders, the ability of our sales force to access healthcare providers to promote our products, increases in unemployment, which could reduce access to commercial health insurance for our patients, thus limiting payer coverage for our products, and the impact of the pandemic on our global supply chain, all of which remain uncertain.

Our future results of operations and liquidity could be materially adversely affected by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions, uncertain demand, and the impact of any initiatives or programs that we may undertake to address financial and operations challenges that we may face.

Our business model

At TherapeuticsMD, our purposeful and continuous partnership with healthcare professionals (“HCPs”) and women is at the heart of our strategies for delivering innovative solutions for women.

From pregnancy to post-menopause, we believe the only way to truly connect with and understand women and their HCPs is to ask questions.

Healthcare has become increasingly consumer driven.

Therefore, patients are seeking more information, control, and convenience, which places additional time and financial pressures on HCPs and as a result, HCPs are looking for improved ways to provide better service to their patients.

A study by IMS Health Inc.

concluded that HCPs desire fewer but more encompassing relationships with companies that can provide more valuable information, deliver more relevant services, and better respond to specific needs of their practice and patients.

Our goal is to meet this challenge by focusing on the opportunities in women’s health, specifically the OB/GYN market, to provide a better customer experience for healthcare providers, payers, pharmacists, and patients through the following means:

We offer HCPs a comprehensive product line of women’s healthcare products across a woman’s reproductive lifecycle.

Our hormone therapy pharmaceutical products are designed to respond to both HCP and patient needs in the marketplace – low dose, FDA-approved bio-identical and convenience.

Our contraceptive product is the only long-lasting, reversible contraceptive option that is patient-controlled and procedure-free.

We believe the attributes of our prenatal vitamins will result in greater consumer acceptance and satisfaction than competitive products while offering high-quality products with differentiating ingredients.

We focus on improved patient education, a high level of patient compliance, and a competitive cost of products, which can result in lower cost of care for payers and improved outcomes for patients.

At the forefront of our sales approach is the philosophy that the HCPs should recommend or prescribe products based only on what is best for the patient.

In general, a better outcome is achieved by providing patients with the best products and care at the best value.

We believe having a portfolio of high-quality product options that can be recommended or prescribed by HCPs, and reimbursed by either government or private third-party payers, is the foundation of providing valuable options to the patient.

We are dedicated to enabling HCPs to advance the health of women by offering new treatment options and giving voice to women’s needs and health concerns.

We are committed to partnering with women’s health advocacy organizations as we create and commercialize solutions to help women transform how they experience reproductive health.

Our sales model focuses on the “4Ps”:

patient, provider, pharmacist, and payer.

We market and sell our products primarily through a dedicated national sales force that calls on HCPs primarily in the OB/GYN market space.

In addition, our products allow HCPs to offer an alternative to patients at a co-payment that provides patients a cost that is competitive in the marketplace.

We also believe that our combination of branded and authorized generic lines of prenatal vitamins offers HCPs, women, and payers cost-effective alternatives for top-quality care.

We supply our prescription products to consumers through pharmacies nationwide.

Our fully staffed customer care center uses current customer relationship management software to respond to HCPs, pharmacies, and consumers via incoming and outgoing telephone calls, e-mails, and live chat.

We believe our sales force has developed strong relationships in the OB/GYN market to sell our current products.

We have established relationships with some of the largest OB/GYN practices in their respective markets.

By delivering our portfolio to similar customer bases of women and OB/GYNs, we believe we can leverage our already deployed assets to increase sales of our products and achieve profitability.

We leverage our existing infrastructure, including our sales force, to efficiently commercialize our FDA-approved pharmaceutical products:

ANNOVERA, IMVEXXY, and BIJUVA and our vitaMedMD and BocaGreenMD line of prenatal vitamins.

In addition to our focus on direct selling from our sales organization in 103 territories, we utilize other commercial levers such as non-personal promotion to HCPs and direct-to-consumer marketing as appropriate to drive awareness and education of our product portfolio.

Finally, we partner with strategic partners and licensees to commercialize our pharmaceutical products in specialty segments of the birth control markets and in non-U.S.

Currently, we market and sell ANNOVERA, IMVEXXY, and BIJUVA under the TherapeuticsMD brand, our prescription prenatal vitamins under our vitaMedMD brand name, and authorized generic formulations of our prescription prenatal vitamin products under our BocaGreenMD brand name.

Our growth strategy

We believe that the relationships our national sales force has developed with OB/GYNs, through our prescription prenatal vitamin products and our FDA-approved pharmaceutical products, will continue to grow as these products offer HCPs new opportunities to serve the needs of their patients.

By delivering our entire portfolio through the same sales channel and demonstrating how these products can help women as different needs emerge throughout their lifetime, we believe we can create efficiencies and synergies to further our growth.

Exclusive focus on woman’s health issues .

We have steadily developed relationships with many of the largest OB/GYN practices in the country through the sales of our prenatal vitamins and our FDA-approved pharmaceutical products.

We believe that our singular focus on women’s health issues enables us to continue to build long-term relationships with women as they move through their life cycles of family planning to post-menopause.

Focus on hormone therapy products .

We continue our focus on the commercialization of FDA-approved bio-identical hormone therapy products designed to (1) alleviate the symptoms of, and reduce the health effects resulting from, menopause-related hormone deficiencies, including VMS and VVA, and (2) fill the large unmet need in this segment of the market.

Deepening focus on other aspects of a women’s reproductive lifecycle.

With the acquisition and launch of ANNOVERA, we demonstrated our intent to provide effective and innovative products for women at all lifecycle stages.

Penetrate compounding market with FDA-approved products .

BIJUVA is currently the only FDA-approved hormone therapy combination product that is bio-identical to the estradiol and progesterone produced by the ovaries.

BIJUVA provides a proven alternative to non-FDA approved compounded bio-identical hormone therapy products at potentially a lower price to patients since most insurance companies do not provide coverage for compounded hormone products, which are not FDA-approved and the safety of which has been questioned by professional societies.

We continue to work with independent and community-based pharmacies that currently compound bio-identical hormone therapy products to help introduce patients and prescribers to our FDA-approved products.

Multi-channel marketing emphasis .

We continue our emphasis on large group OB/GYN practices that provide opportunities to reach large patient bases and that are receptive to the data and savings we provide.

In addition, we work with strategic partners and licensees to commercialize and/or market our pharmaceutical products in non-U.S.

markets, we have broadened our channels that allow for wide patient access.

The proliferation of digital technology has dramatically increased the amount of information available to patients and providers.

We believe this makes patient/provider engagement and experience a more important factor for life sciences companies and that providing patients and providers with important information on a real-time basis is a critical piece of serving this market.

As an example of the impact of technology on women’s health, products such as ANNOVERA can be prescribed to patients via online platforms, and other direct-to-consumer telehealth platforms.

Subject to state telehealth and prescribing laws, prescribers affiliated with direct-to-consumer telehealth platforms can prescribe or offer products to patients through a convenient virtual platform.

Multiple distribution partners .

We have multiple distribution partners, including large chain pharmacies, independent community pharmacies, mail order, and compounding and specialty pharmacies.

We believe that providing a higher level of customer care through unique programs targeted at each of these distribution partners can produce better outcomes and value for the patient, provider, and payer.

Geographical territories .

We continue to adjust our marketing footprint in the United States (U.S.) and sales team, which currently totals 103 territories, as we continue to commercialize ANNOVERA, IMVEXXY, and BIJUVA.

We changed our business in 2022, by out-licensing our products and collecting royalties, after granting an exclusive license to commercialize the Company’s IMVEXXY, BIJUVA, and prescription prenatal vitamin products sold under the BocaGreenMD® and vitaMedMD® brands in the United States and its possessions and territories and assigning the Company’s exclusive license to commercialize ANNOVERA in the United States and its possessions and territories to Mayne Pharma.

The Company also has license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S.

In July 2018 we entered into the Knight License Agreement pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel.

In June 2019, we entered into the Theramex License Agreement to commercialize IMVEXXY and BIJUVA outside of the U.S., excluding Canada and Israel.

In 2021, Theramex secured regulatory approval for BIJUVA in certain European countries and began commercialization efforts in those countries.

Currently, we collect royalties on sales of ANNOVERA, IMVEXXY, and BIJUVA under the TherapeuticsMD brand, prescription prenatal vitamins under our vitaMedMD brand name, and authorized generic formulations of our prescription prenatal vitamin products under BocaGreenMD brand name.

We expect that the primarily source of our future revenue will be based on payments we may receive for milestones and royalties related to these products.

The Company no longer has research and development, commercial, manufacturing and finance infrastructure and operates as a virtual corporation with no material capital investment in fixed assets.

Industry and market

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Additionally, 1.0% of women experience premature menopause before the age of 40, due to permanent ovarian failure that may be associated with sex chromosome abnormalities.

Classic symptoms of menopause are VMS (including hot flashes and night sweats), vulvovaginal symptoms (including dyspareunia and vaginal dryness) and sleep disturbances.

These symptoms are caused by the reduced levels of circulating estrogen as ovarian production

Classic symptoms of menopause are vasomotor symptoms (“VMS”) (including hot flashes and night sweats), vulvovaginal symptoms (including dyspareunia and vaginal dryness) and sleep disturbances.

These symptoms are caused by the reduced levels of circulating estrogen as ovarian production shuts down.

Common treatments for menopausal VMS and vulvovaginal symptoms of menopause range from prescription medications, including hormone therapy and non-hormonal options, to over-the-counter supplements and lubrication options.

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Prenatal vitamin products are marketed as either nonprescription products or prescription products, with many companies marketing their products through both channels.

Our contraceptive product

The segesterone acetate component of ANNOVERA was classified by the FDA as a “new chemical entity,” or NCE, and thus ANNOVERA has five years of regulatory exclusivity under the Drug Price Competition and Patent Term Restoration Act of 1984, otherwise known as the Hatch-Waxman Act.

ANNOVERA is a one-year (13 cycles) ring-shaped contraceptive vaginal system, or CVS.

ANNOVERA, which is made with a silicone elastomer, contains segesterone acetate, a 19-nor progesterone derivative also known as Nestorone ® , or SA, and ethinyl estradiol, or EE.

EE is an approved active ingredient in many marketed hormonal contraceptive products.

Segesterone acetate, an NCE, is a potent progestin that, based on pharmacological studies in animals and in vitro , does not bind to the androgen or estrogen receptors and has no glucocorticoid activity at contraceptive doses.

SA has been evaluated in 51 clinical studies across these delivery systems with more than 26,794 cycles of exposure.

ANNOVERA can be inserted and removed by the woman herself without the aid of a healthcare provider and, unlike oral contraceptives, ANNOVERA does not require daily administration to obtain the contraceptive effect.

After 21 days of use, the woman removes ANNOVERA for seven days, thereby providing a regular bleeding pattern (i.e., withdrawal/scheduled bleeding).

The same CVS is then re-inserted for additional 21/7-days in/out, for up to a total of 13 cycles (one year).

ANNOVERA releases daily vaginal doses of both active ingredients (SA and EE).

The claimed release rate of 150 μg/day SA and 13 μg/day EE is supported by the calculated average release rate from an ex vivo analysis of ANNOVERA used for 13 cycles and is also supported by data from 13 cycles of in vitro release.

As part of the approval of ANNOVERA, the FDA has required a post-approval observational study be performed to measure the risk of venous thromboembolism.

In accordance with the post-marketing requirements, the full protocol for the study was submitted to the FDA in August 2019.

We have agreed to perform and pay the costs and expenses associated with this post-approval study, provided that if the costs and expenses associated with such post-approval study exceed $20.0 million, half of such excess will offset against royalties or other payments owed by us under the Population Council License Agreement.

Given the observational nature of the study, we do not believe that the costs of the study will be material on an annual basis.

We believe that ANNOVERA competes across all the contraception options for women, especially for those women seeking a long-lasting option without a procedure.

Additionally, we previously submitted a supplemental new drug application (“NDA”) to FDA to revise certain manufacturing testing limits for ANNOVERA to allow for normal commercial manufacturing variation.

In December 2021, FDA determined that it could not approve the supplemental NDA without additional information.

In its complete response letter (“CRL”), FDA provided recommendations and requested additional information that could support approval of revisions to certain testing specifications.

In January 2022, we responded to the CRL, and provided the requested additional information to the FDA and modified the request for the manufacturing testing limits based on the FDA recommendations.

We expect a response from the FDA by the end of second quarter of 2022.

We will continue to manufacture and supply ANNOVERA under the existing specification.

In the meantime, our third-party

contract manufacturer may not be able to supply us with sufficient ANNOVERA to adequately supply the market , which would have an adverse effect on our business, results of operations and financial condition.

For patients, ANNOVERA provides a single, long-lasting, reversible birth control product that does not require a procedure at the doctor’s office for insertion or removal, empowering women to be in complete control of their fertility and menstruation with a 21/7 regimen.

We believe that ANNOVERA is a unique alternative for women who have previously chosen other forms of birth control.

These include nulliparous women (or women who have never given birth), women who are considering an IUD but would rather not have a procedure, women who are between pregnancies but desire protection without a long-term commitment, and women who are not satisfied with oral options due to the daily usage or potential side effects.

We believe that the strong commercial net revenue per unit of ANNOVERA and commercial insurance adoption provide us with an opportunity to deploy additional financial resources to maximize ANNOVERA’s consumer-focused commercialization strategy and leverage the ability of doctor/patient choice of contraceptive to override insurance company formularies when necessary.

As part of this strategy, we are pursuing distribution opportunities for ANNOVERA to provide women with additional access to ANNOVERA, particularly during the COVID-19 pandemic, with multiple direct-to-consumer telehealth platforms that extend the reach of ANNOVERA.

Based on prescription data from Symphony Health Solutions, the FDA-approved prescription market in the U.S.

for contraceptive products during 2021 amounted to more than 69 million prescriptions, generating $5.4 billion in gross sales.

For 2021, 2020, and 2019, 44.2%, 31.2% and 18.1%, respectively, of our consolidated product revenue was generated by ANNOVERA.

Our menopause portfolio

Our Licensed Menopause portfolio

On December 30, 2022, we granted an exclusive license to commercialize the Company’s IMVEXXY in the United States and its possessions and territories to Mayne Pharma.

IMVEXXY is a small, digitally inserted, softgel vaginal insert that dissolves when inserted into the vagina.

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IMVEXXY demonstrated efficacy as early as two weeks (secondary endpoint) and maintained efficacy through week 12 in clinical studies, with no increase in systemic hormone levels beyond the normal postmenopausal range (the clinical relevance of systemic absorption rates for vaginal estrogen therapies is not known).

As part of the FDA’s approval of IMVEXXY, we have committed to conduct a post-approval observational study to evaluate the risk of endometrial cancer in post-menopausal women with a uterus who use a low-dose vaginal estrogen unopposed by a progestogen.

We previously granted licenses to commercialize the Company’s IMVEXXY product outside of the United States to Theramex and Knight.

As part of the FDA’s approval of IMVEXXY, we committed to conduct a post-approval observational study to evaluate the risk of endometrial cancer in post-menopausal women with a uterus who use a low-dose vaginal estrogen unopposed by a progestogen.

The FDA has also asked the sponsors of other vaginal estrogen products to participate in the observational study.

In connection with the observational study, we will be required to provide progress reports to the FDA on an annual basis.

The development of this method is underway, and we do not believe that the costs will be material on an annual basis.

Based on prescription data from Symphony Health Solutions, the FDA-approved prescription market in the U.S.

for the treatment of VVA symptoms includes seven products (including branded products and their generic equivalents) generated an aggregate of $1.9 billion in gross sales on 6.5 million prescriptions for 2021.

Of the total gross sales, $371 million were generated by PREMARIN ® cream (Pfizer), the leading brand in the market.

In addition, ESTRACE ® cream and Vagifem ® are now mostly generic which generated $1.2 billion in gross sales for 2021.

These three products are localized estrogen therapy which is the most commonly used method for the treatment of VVA.

For 2021, 2020, and 2019, 36.8%, 43.2% and 47.6%, respectively, of our consolidated product revenue was generated by IMVEXXY.

In connection with the observational study, we would have been required to provide progress reports to the FDA on an annual basis.

The obligation to conduct this study was transferred to Mayne Pharma as part of the License Agreement.

On December 30, 2022, we granted an exclusive license commercialize the Company’s BIJUVA in the United States and its possessions and territories to Mayne Pharma.

BIJUVA offers the convenience of a single-capsule combination of two hormones (estradiol and progesterone), which may improve a user’s compliance.

The estradiol and progesterone in BIJUVA are plant-based, not animal-sourced, and do not contain peanut oil unlike other FDA-approved progesterone products.

BIJUVA provides a sustained steady state of estradiol which reduced the frequency and severity of hot flashes in clinical studies with no demonstrated impact on a patient’s weight or blood pressure.

BIJUVA provides a sustained steady state of estradiol

which reduced the frequency and severity of hot flashes in clinical studies with no demonstrated impact on a patient’s weight or blood pressure.

Additionally, through clinical trials, BIJUVA has demonstrated endometrial safety and greater than 90% amenorrhea rates, while providing no clinically meaningful changes in mammograms, or in coagulation or lipid parameters, and while providing clinically meaningful improvements in quality of life and sleep disturbance.

In December 2021, the FDA approved the supplemental NDA for the 0.5 mg/100 mg dose of BIJUVA .

We are currently evaluating plans for commercialization of the low dosage BIJUVA ® product.

We previously granted licenses to commercialize the Company’s BIJUVA product outside of the United States to Theramex and Knight.

Estrogen (with or without a progestin) is most commonly used to treat VMS due to menopause that is a direct result of the decline in estrogen levels associated with ovarian shutdown at menopause.

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Progestins are also used to treat dysfunctional uterine bleeding and endometriosis.

According to Symphony Health Solutions, the total FDA-approved prescription market in the U.S.

for all estrogen and progestin drug products for the treatment of VMS generated an aggregate of $2.1 billion of gross sales on 23.5 million prescriptions for 2021.

The three primary hormone therapy products are estrogen, progestin, and a combination of estrogen and progestin, which are produced in a variety of forms, including oral tablets or capsules, skin patches, gels, and emulsions.

For 2021, gross sales in the U.S.

of FDA-approved branded and generic products for estrogen-only amounted to an aggregate of $1.3 billion on 13.2 million prescriptions.

For 2021, gross sales in the U.S.

of FDA-approved branded and generic products for progestins-only amounted to an aggregate of $372 million on 8.4 million prescriptions.

For 2021, gross sales in the U.S.

of FDA approved branded and generic products for estrogens/progestins combined amounted to an aggregate of $435 million on 1.7 million prescriptions.

With the approval of BIJUVA, the FDA required a post-approval commitment to further develop and validate our in-vitro dissolution method to show how BIJUVA is released from the capsule in an in-vitro setting for quality control assessments.

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We believe that our FDA-approved pharmaceutical products offer advantages in terms of demonstrated safety and efficacy, consistency in the hormone dose, lower patient cost due to the increased likelihood of insurance coverage, and improved access as a result of availability from major retail pharmacy chains rather than custom order or formulation by individual compounders.

The largest competitors for BIJUVA in the FDA-approved market are Pfizer (PREMPRO ® ) and Premarin, with sales of PREMPRO and Premarin constituting the largest branded products.

The remainder of the market is represented almost exclusively by generic products (estradiol, the generic version of Estrace oral, and generic micronized progesterone).

None of the competing FDA-approved drugs for the treatment of moderate-to-severe VMS due to menopause are a combination of both bio-identical estradiol and progesterone.

The market for non-FDA-approved compounded hormone therapy products is generally considered very fragmented because the products are prepared and sold by individual compounding pharmacies.

We believe that BIJUVA represents the first time a combination product of estradiol and progesterone that is bio-identical to the estradiol and progesterone produced by the ovaries in a single combined product has been FDA approved.

For 2021, 2020, and 2019, 12.3%, 10.1% and 5.4%, respectively, of our consolidated product revenue was generated by BIJUVA.

Our prenatal vitamin products

We continue to manufacture and distribute our prescription prenatal vitamin product lines under our vitaMedMD brand name and authorized generic formulations of some of our prescription prenatal vitamin products under our BocaGreenMD Prena1 name.

We will continue to support the vitaMedMD and BocaGreenMD products as they are important products to our core customers and help provide us with continued access to sell our women’s health portfolio.

Our current prenatal vitamin product line features a unique, proprietary combination of FOLMAX™, FePlus™, and pur-DHA™ and includes the following products:

vitaMedMD One Rx Prenatal Multivitamin

vitaMedMD RediChew ® Rx Prenatal Multivitamin

BocaGreenMD Prena1 True

BocaGreenMD Prena1 Pearl

BocaGreenMD Prena1 Chew

According to Symphony Health Solutions, for 2021, 4.2 million prescriptions for prenatal vitamins were issued in the U.S.

resulting in total sales of $188 million.

For 2021, 2020, and 2019, 6.7%, 15.5% and 29.0%, respectively, of our consolidated product revenue was generated by our prenatal vitamin products.

Commercialization model

We are commercializing the products in our portfolio through a common model focused on the belief that providing good experiences for both HCPs and patients will drive profitability for TherapeuticsMD.

Given that our portfolio focus is exclusively on women’s health, we believe that each new product launch will allow us to further leverage our existing infrastructure and build out our reputation as the premier women’s health organization in the U.S.

Below is more detail on our commercialization model:

HCP Education - Initially, we focus on the high writing and high potential HCPs in each territory to gain a full understanding of their prescribing behavior and practices.

Our focus is on driving initial prescriptions of these writers for each new product launch and utilizing the time to also pull through on our portfolio of existing products.

Once regular writing is established with the initial group of HCPs, we expand our reach to a larger set of HCPs writing in the category.

We educate HCPs on our products primarily with our field sales organization supplemented by non-personal promotion.

Our sales force currently has 103 territories, which includes the most significant part of the addressable markets across our product portfolio.

As of December 31, 2021, 10,700 HCPs had written at least one prescription for ANNOVERA, 28,900 HCPs had written at least one prescription for IMVEXXY, and 9,800 HCPs had written at least one prescription for BIJUVA.

In addition to our sales organization, we leverage non-personal promotion (multi-channel advertising) to HCPs designed to drive awareness, education, and action.

These efforts are designed to allow for pull through of the sales organization’s efforts and identification of new targets that have interest in writing prescriptions for one or more of our products.

We believe this will drive increased prescribing for our products and lift the overall writing universe and our products to top of mind in the HCP community.

Payer Access.

With the ever-changing payer environment, we believe it is critical to maximize breadth of coverage as quickly as possible to not inhibit patient access to product.

We do this while working to negotiate the best possible contracts for us.

Many commercial payers employ “new-to-market blocks” for newly launched products until the payers have the opportunity to make a coverage decision based upon their internal review of the product.

When a product is not covered, the patient is responsible to pay the full price for the medication, which can significantly limit utilization of the product.

As we seek to increase the number of lives covered by commercial payers, it is our objective to continue to seek unrestricted coverage.

For IMVEXXY, through December 31, 2021, we achieved unrestricted coverage with the majority of the top nine commercial payers of VVA products by commercial payer lives, and as of December 31, 2021, 62% of the commercial payer market covered IMVEXXY with unrestricted access under pharmacy benefits.

For BIJUVA, through December 31, 2021, we achieved unrestricted coverage with the majority of the top nine commercial payers of VMS products by commercial payer lives, and as of December 31, 2021, 66% of the commercial payer market covered BIJUVA with unrestricted access under pharmacy benefits.

For ANNOVERA, we believe that its unique characteristics will assist us in pursuing favorable commercial payer coverage, including only one pharmacy fill fee per year and no office visit or procedure fees.

We have made substantial progress in achieving unrestricted access to ANNOVERA through commercial payers, and we continue to pursue discussions with several of the country’s largest commercial insurers to further expand coverage.

As of December 31, 2021, 66% of the commercial payer market covered ANNOVERA with unrestricted access under pharmacy benefits and 74% covered ANNOVERA with step access.

In addition, the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010 (the “ACA”), mandates that private health plans provide coverage for women’s preventative services, without imposing patient cost-sharing requirements, as recommended by the Health Resources and Services Administration (“HRSA”).

HRSA guidelines require private health plans to cover, without cost-sharing, at least one form of contraception, or product, in each of the methods, or classes, identified by the FDA for women in its Birth Control Guide, which currently includes 17 separate classes.

For classes with more than one type of treatment, private payers need only provide no-cost coverage for one product in each class and may use reasonable medical management to determine whether and to what extent to cover other products in the class.

We believe that given no other vaginal contraceptive product offers contraceptive benefits for an entire year that it is possible that FDA could determine that ANNOVERA constitutes a new class of contraceptive, which could allow for coverage of ANNOVERA by private health plans with no out-of-pocket cost for patients.

However, there is no assurance that FDA will make such a determination and it is possible that other FDA-approved products could also be included in such a new class.

For instance, the FDA may find that ANNOVERA fits into the vaginal contraceptive ring class, which it would share with NuvaRing and its generic equivalents, and potentially others.

To the extent ANNOVERA is not the only FDA-approved product in a designated class of contraception, private payers may choose not to cover ANNOVERA or may require patient cost-sharing obligations.

Some states have amended and expanded requirements to match the standard set in the ACA mandate, specifically requiring coverage for the full range of contraceptive methods, counseling and services used by women and eliminating out-of-pocket costs and limiting other health plan restrictions.

However, the Trump administration implemented policies that permit certain employers to claim a religious or moral objection to the birth control coverage mandate under the ACA.

Originally, the religious exemption applied only to churches, but the Department of Health and Human Services extended that privilege in 2017 to

family-owned, non-publicly traded corporations whose owners state that paying for birth control would violate their religious beliefs.

Exempted entities no longer need to certify their objection or otherwise notify the federal government of their decision to stop providing coverage.

In July 2020, the U.S.

Supreme Court issued a ruling in the case styled Little Sisters of the Poor Saints Peter and Paul Home v.

Pennsylvania et al ., upholding the legality of the Trump Administration’s religious exemption to the contraceptive mandate.

Prior to his election, President Biden stated that he would undo the religious exemption expansion if he were elected.

To date, the Biden a dministration has not issued any Executive Order, regulation, or other policy change to reverse the Trump a dministration religious exemption policy, but such action may be forthcoming.

We anticipate that any impact on contraception coverage due to religious exemption will be low;

however, healthcare reform continues to attract significant legislative and administrative interest, legal challenges, regulatory and compliance requirements, new approaches and public attention that create uncertainty and the potential for additional changes.

Healthcare reform implementation, additional legislation or regulations, and other changes in government policy or regulation may repeal the contraception coverage mandate, affect our reimbursement or impose additional coverage limitations and/or cost-sharing obligations on patients, any of which could have a material adverse effect on patient usage of ANNOVERA.

In February 2020, we entered into an agreement with Afaxys Pharma, LLC, a pharmaceutical company focused on serving women in the public health system, to market ANNOVERA in the U.S.

public health sector.

As part of the Population Council License Agreement, we agreed to provide significantly reduced pricing to federally designated Title X family planning clinics serving underrepresented women.

We also have agreements to market ANNOVERA to the U.S.

Department of Defense, the U.S.

Department of Veteran’s Affairs, and in Puerto Rico.

Obtaining and maintaining favorable reimbursement can be a time-consuming and expensive process, and there is no guarantee that we will be able to negotiate or continue to negotiate reimbursement or pricing terms for our products with payers at profitable levels.

We take active steps to ensure our products are available in all classes of trade and delivery systems.

We offer our products through traditional chain wholesalers (Cardinal, McKesson and AmerisourceBergen) and independent retail pharmacies, community compounding pharmacies, and online pharmacies.

Patient Affordability Programs.

We have affordability and adherence programs in place for patients so that we can support appropriate use of our products by patients.

Our co-pay assistance programs allow patients to access our products at a reasonable cost.

We continue to support our patient education and affordability program that allows all eligible patients who enroll to receive IMVEXXY and BIJUVA at a reasonable cost.

When a product is not covered by a patient’s commercial insurance, the patient is responsible to pay the full price for the medication, which can significantly limit a patient’s ability to pay for the product and subsequently led to reduced utilization of the product.

For IMVEXXY and BIJUVA, enrolled patients paid as little as $35.00 for a prescription with commercial insurance coverage and pay as little as $75.00 for a prescription without commercial insurance coverage.

For ANNOVERA, for commercially insured patients, we offer patients assistance for as low as $60.00 for an annual prescription.

However, many patients will not need a co-pay assistance program for ANNOVERA given the requirements of the ACA at the federal level and similar laws at the state level.

We continue to dialogue with the FDA regarding the potential inclusion of ANNOVERA as a new class of contraception for women in the FDA’s Birth Control Guide, which would require private health plans to cover ANNOVERA with no patient out-of-pocket costs as part of the ACA.

There is no assurance that the FDA will make such a determination and it is possible that other FDA-approved products could also be included in such a new class.

The FDA may also find that ANNOVERA fits into the vaginal contraceptive ring class, which it would share with NuvaRing and its generic equivalents, and potentially others.

Eight states require insurance coverage of prescription contraception with co-pay regardless of inclusion in the FDA’s Birth Control Guide and 11 states, plus Washington D.C., require coverage of prescription contraception with no co-pay regardless of inclusion in the FDA’s Birth Control Guide.

Patient Adherence.

Establishing compliance and adherence programs that make getting on a prescription medication and obtaining prescribed refills easy and convenient for the patient and HCPs is a critical lever in our commercial model.

Our focus is on minimizing complications in patients filling their first prescription and engaging with them throughout the life of their treatment to ensure patients stay on and use therapy for the appropriate length of time.

We have delivered effective patient engagement programs for all of our products.

Consumer Communication .

Another critical level in the commercial model is consumer outreach.

Our initial focus is on those patients who are already predisposed to seek treatment, such as those patients new to therapy, and those patients dissatisfied with their current therapy.

Next, we are focused on expanding the market by energizing patients who are experiencing bothersome symptoms but who have not been motivated to seek treatment.

Methods of communication include online, and offline media and span branded and unbranded communication to ensure we drive action from awareness of symptoms to desire to speak to an HCP to acquire a prescription.

License a greements

Population Council license agreement

Under the terms of the Population Council License Agreement, we paid the Population Council a milestone payment of $20.0 million in 2018, which was within 30 days following the approval by the FDA of the NDA for ANNOVERA, and $20.0 million in 2019 following the first commercial batch release of ANNOVERA.

The aggregate $40.0 million of milestone payments were recorded as license rights.

For additional information, see “Note 6.

License rights and other intangible assets” to the consolidated financial statements included in this 2021 10-K Report .

The Population Council is also eligible to receive future payments upon the achievement of certain commercial sales milestones of ANNOVERA.

We are required to pay the Population Council additional milestone payments of $40.0 million upon cumulative net sales of ANNOVERA in the U.S.

by us and our affiliated and permitted sublicensees of each of $200.0 million, $400.0 million and $1.0 billion.

The Population Council has agreed to perform and pay the costs and expenses associated with four post-approval studies required by the FDA for ANNOVERA, and we have agreed to perform and pay the costs and expenses associated with a post approval study required by the FDA to measure risk for venous thromboembolism, provided that if the costs and expenses associated with such post-approval study exceed $20.0 million, half of such excess will be offset against royalties or other payments owed by us to the Population Council under the Population Council License Agreement.

To the extent that the Population Council does not fulfil these studies to FDA’s satisfaction, FDA may impose additional requirements and penalties against us, as we hold the NDA for ANNOVERA.

In July 2021, we received a letter from FDA indicating that the post-marketing commitment study being conducted by the Population Council for ANNOVERA to characterize the in vivo release rate of ANNOVERA was not fulfilled to FDA’s satisfaction.

In addition, the final reports for the two post-marketing requirement studies being performed by the Population Council for ANNOVERA were not submitted by the initial listed submission deadline, which deadlines have since been extended by FDA.

We are working with Population Council to complete the post-marketing commitment study to FDA’s satisfaction and reduce the delay in submitting the post-marketing requirement final reports.

To the extent that the Population Council does not fulfil these studies to FDA’s satisfaction, FDA may impose additional requirements and penalties against us, as we hold the NDA for ANNOVERA.

We and the Population Council have agreed to form a joint product committee responsible for overseeing activities under the Population Council License Agreement.

We are responsible for all aspects of marketing, promotion, product positioning, pricing, education programs, publications, sales messages and any additional desired clinical studies for the one-year vaginal contraceptive system, subject to oversight and decisions made by the joint product committee.

We are also required to pay the Population Council, on a quarterly basis, step-based royalty payments based on our annual net sales of ANNOVERA as follows:

(i) if annual net sales are less than or equal to $50.0 million, a royalty of 5% of net sales;

(ii) for annual net sales greater than $50.0 million and less than or equal to $150.0 million, a royalty of 10% of such net sales;

and (iii) for net sales greater than $150.0 million, a royalty of 15% of such net sales.

The annual royalty rate will be reduced to 50% of the initial rate during the six-month period beginning on the date of the first arms-length commercial sale of a generic equivalent of the one-year vaginal contraceptive system that is launched by a third-party in the U.S., and thereafter will be reduced to 20% of the initial rate.

Unless earlier terminated, the Population Council License Agreement will remain in effect until the later of the expiration of the last-to-expire of the Population Council’s U.S.

patents that are licensed to us, or the date following such expiration that follows a continuous period of six months during which we and our affiliates have not made a commercial sale of ANNOVERA in the U.S.

The Population Council License Agreement may also be terminated for certain breach and bankruptcy-related events and by us on 180 days’ prior notice to the Population Council.

Our licensed prenatal vitamin products

On December 30, 2022, we granted an exclusive license to commercialize, in the United States and its possessions and territories, our prescription prenatal vitamin product lines under our vitaMedMD brand name and authorized generic formulations of some of our prescription prenatal vitamin products under our BocaGreenMD Prena1 name to Mayne Pharma.

License agreements

Mayne license agreement

Pursuant to the Mayne License Agreement, on the Closing Date the Company granted Mayne Pharma (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and commercialize the Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization in the United States and its possessions and territories.

Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed Products.

Pursuant to the Transaction Agreement, the Company sold to Mayne Pharma, at closing, certain assets for Mayne Pharma to commercialize the Products in the United States, including the Company’s exclusive license from the Population Council to commercialize ANNOVERA.

The total consideration from Mayne Pharma to the Company for the purchase of the Transferred Assets and the grant of the licenses under the License Agreement was ( i ) a cash payment of $140.0 million at closing, (ii) a cash payment of approximately $12.1 million at closing for the acquisition of net working capital as determined in accordance with the Transaction Agreement and subject to certain adjustments, (iii) a cash payment of approximately $1.0 million at closing for prepaid royalties in connection with the Mayne License Agreement Amendment and (iv) the right to receive the contingent consideration set forth in the Mayne License Agreement, as amended.

On the Closing Date, the Company and Mayne Pharma entered into the Mayne License Agreement Amendment.

Pursuant to the Mayne License Agreement Amendment, Mayne Pharma agreed to pay the Company approximately $1.0 million in prepaid royalties on the Closing Date.

The prepaid royalties will reduce the first four quarterly payments that would have otherwise been payable pursuant to the Mayne License Agreement by an amount equal to $257,250 per quarterly royalty payment plus interest calculated at 19% per annum accruing from the Closing Date until the date such quarterly royalty payment is paid to the Company.

Knight license agreement

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As part of the Knight License Agreement, Knight is prohibited from exporting IMVEXXY and BIJUVA to the U.S.

Theramex l icense a greement

Theramex license agreement

Under the terms of the Theramex License Agreement, Theramex paid us EUR 14 million, or $15.5 million, in cash as an upfront fee in August 2019.

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Either party may terminate the Theramex License Agreement for any material breach by the other party that is not cured within certain specified time periods or if the other party files for bankruptcy or other related matters.

Preclinical development

As our current focus is the commercialization of our three FDA-approved pharmaceutical products, we have placed on hold our five preclinical projects:

(i) a progesterone-alone transdermal cream (TX-005HR), (ii) a combination estradiol and progesterone transdermal cream (TX-006HR), (iii) a pair of transdermal patch product candidates (TX-007HR and TX-008HR), and (iv) an oral progesterone and estradiol formulation (TX-009HR).

“In vivo” and “in vitro” proof-of-concept preclinical studies were conducted to assess TX-005HR and TX-006HR with respect to penetration of the estradiol and progesterone, and successful opposition of subcutaneous estradiol on the endometrium.

TX-009HR previously showed improved bioavailability in animals, and in 2019, TX-009HR was tested in a Phase 1 study of healthy postmenopausal women and was well-tolerated in that study.

We may, in the future, engage with a financing partner to advance one or more of these product candidates.

On December 30, 2022, we assigned the Company’s exclusive license to commercialize ANNOVERA to Mayne Pharma.