Good day. Thank you for standing by. Welcome to the Agile Therapeutics First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matt Riley, Head of Investor Relations. Hello, everyone, welcome to today's conference call to discuss our first quarter 2023 financial results and corporate update. Before we start, let me remind you that today's call will include forward-looking statements based on current expectations, including statements concerning our financial outlook and financing prospects for the future, our outlook for the first half and full year of 2023, management's expectations for our future financial and operational performance, including our expectations regarding the market growth of Twirla and 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, 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. For more information concerning risk factors that may affect the company, please refer to our filings with the SEC, which are available through the Investor Relations section of our website. 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 not sufficient for prescribing decisions. Joining me on today's call is Al Altomari, Agile Therapeutics Chairperson and Chief Executive Officer. Following our prepared remarks, we'll open the call to your questions. I will now turn the call over to Al. Thank you, Matt, and good afternoon, everyone. I'm pleased to report another successful quarter for Twirla. We believe our Twirla net revenue levels to date, along with the demand continuing to grow at double-digit rates, have us on the path to achieving our 2023 financial goal of net revenue in the range of $25 million-$30 million. I want to begin by reviewing Twirla's first quarter 2023 performance and providing some commentary on our outlook in these areas. First, Twirla demand. We are excited about the growth in Twirla demand that we're seeing across all our channels. We think this demonstrates that we're making good progress penetrating our markets and that patients are continuing to choose Twirla. Twirla total demand for the first quarter, as reported by Symphony, was 45,036 total cycles, a 20% increase from the fourth quarter of 2022, a single quarter record. Retail demand, which is our most profitable channel, was 30,576 total cycles in the first quarter of 2023, a 20% increase from the fourth quarter of 2022. Non-retail demand the first quarter 2023 was 14,460 total cycles, also an increase of 20% from the fourth quarter of 2022. Throughout March and April, we've consistently seen new weekly highs for Twirla demand as reported by Symphony. We expect our telemedicine partnerships to further advance the retail channel demand beginning in the second half of 2023 as Twirla becomes the only patch to be offered by Nurx's partner pharmacy. Our vision and ambition is that our retail partnerships can potentially accelerate the growth in the retail channel like Afaxys accelerated the growth in our non-retail channel. Now turning to net revenue and factory sales. First quarter 2023, net revenue was $3.8 million, which was approximately the same as the net revenue reported in the fourth quarter of 2022 and in line with our expectations. Net revenue results for the first quarter 2023 reflect flat factory sales quarter on quarter due to wholesaler work down of inventories levels, which rose at the end of 2022, and a slightly higher mix on our non-retail sales, which represent higher gross to net reduction. Factory sales for the first quarter of 2023 as reported by our wholesalers were 43,446 cycles compared to 43,340 total cycles for the fourth quarter of 2022. Wholesaler inventory decreased in the first quarter by 24%, with the wholesaler purchasing patterns realized in April 2023 signaling we believe that channel inventory levels have now normalized. We would expect to see both net revenue and factory sales to grow at higher rates moving forward. Gross margin. Another encouraging sign for Agile is that we continue to make progress in generating gross profit. In the first quarter of 2023, we generated gross profit of about $1.8 million, or a gross margin of 47%, compared to only $234,000 for a gross margin of 13% in the first quarter of 2022. We believe that we have the ability to increase this growth over the rest of 2023. Now on to Operating Expenses. Non-GAAP Operating Expenses, or OpEx, for the first quarter of 2023 were $8.5 million, an 8% decrease from the $9.2 million reported for both the third and fourth quarters of 2022. We are proud of our ability to grow Twirla while effectively managing our OpEx levels. Our goal is to continue to manage OpEx to be in line with the first quarter of 2023 results, which would lead to a significant reduction in our full year 2023 OpEx compared to the $45.5 million reported for the full year of 2022. Looking ahead to the second quarter of 2023, we expect to see meaningful quarter-over-quarter growth in net revenue, factory sales, and demand while continuing to manage our OpEx levels. This is a formula that is driving our confidence in our ability to achieve the 2023 net revenue in the range of $25 million-$30 million. We believe we will continue to produce results by delivering on our business plan that is designed to allow Agile to thrive, not just survive by first focusing primarily on our five key states. Second, growing non-retail prescriptions through our partnership with Afaxys and focusing on the Planned Parenthood. Number three, growing our retail prescriptions through our telemedicine partnership while also increasing the effectiveness of our sales force. In the past, you've heard me allude to our business plan and its emphasis on leveraging external partnerships that allows us to keep our internal infrastructure lean and efficient. While this plan has demonstrated its ability to grow Twirla while keeping our OpEx managed, we believe it has also de-demonstrated our credibility as a true commercial partner. We believe our ability to launch and consistently grow Twirla makes us an effective potential partner as we continue exploration of business development and product licensing opportunities. While we believe we can achieve our 2023 net goal with Twirla alone, adding a second commercial product to the company could potentially allow us to accelerate the timeline to generating positive cash flow. Before we open the line for Q&A, I'd like to comment on a few other of our financial results, which we believe demonstrate our continued progress on our business. Cost of goods sold, which consists of direct and indirect costs related to the manufacturing Twirla sold, were $2 million for the first quarter of 2023, compared to $1.7 million for the fourth quarter of 2022. We ended the first quarter of 2023 with $4.4 million cash on hand. In addition to our ATM or at-the-market arrangement, we will continue to evaluate all available options to finance the company and continue to explore opportunities that could potentially accelerate our timeline to generate positive cash flow, including exploring business development opportunities. We closed out our first quarter of 2023 with a GAAP net loss of $5.4 million, or $5.91 per share, compared to a net loss of $10.4 million or $166.68 per share for the comparable period in 2022. Non-GAAP net loss was $7.1 million or $7.76 per share for the first quarter of 2023, compared to non-GAAP net loss of $11.8 million or $188.91 per share for the comparable period in 2022. The non-GAAP results reflect the exclusion of $1.7 million in other income for the first quarter of 2023 and $1.4 million in other income for the first quarter of 2022, resulting from the fair market value remeasurement on our warrant liabilities. We acknowledge that we are operating in very challenging times in the capital markets. We feel fortunate to be a growing revenue-generating company and believe this puts Agile in a more advantageous position to execute on our business plan. We believe that our results for this quarter demonstrate that our business plan is working, and that we're making good progress in achieving our goals and establishing Agile in the contraceptive marketplace by growing Twirla and moving towards positive cash flow generation. We'd now like to give our covering analysts a chance to ask us any questions. Operator, you can open the lines. Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our question comes from Oren Livnat of H.C. Wainwright. Thanks. I have several questions. First, you know, what obviously jumps off the page is this growth despite of revenue and demand and scripts that we see despite actually I think it was reduced OpEx quarter-over-quarter, and certainly much lower year-over-year. I'm curious, I think you said in your comments you hope to keep that approximately flat going forward through the year, despite pretty ambitious revenue growth. Did I hear that right? Hey, Oren, it's Al. Yeah, you heard it right. Yeah, that's. You know, we think we've got our arms around our, you know, the model that we wanna execute under. I mean, you see we're, you know, generating significant growth, you know, now I think believe five quarters in a row, so it's not a fluke. We think we figured out the way, the model should work and what should be on our books versus our partners books. Yeah, that's what we wanna do. We wanna kinda try to hold steady here, you know, so that in. I think we can do it. I think we can do it. You know, we're pleased to put up an 8% decrease, you know, from the first quarter, from, I'm sorry, from year-end in the first quarter. We wanna try to hold it from here. It sounds like, you know, these outsourced, if you wanna call it, or Partnerships models, you know, clearly there's some margin in it for them, but I'm trying to think about just the actual work of helping grow demand. You have your sales force out there in the traditional retail channel, but, you know, when you think about telemedicine and Nurx, What, you know, what's the flow of demand there? Are those patients coming in looking for anything and some algorithm or active engagement from the Nurx side potentially pushes them towards your product? Also, in that channel, can you remind us what is your relative positioning to Xulane? Is it that nobody can get Xulane through there at all or that they're just not offering it or promoting it, so to peak? Yeah. Yeah, great question. Yeah, so it's, you know, like two parts of our strategy, Oren. Like, first is the, like, we'll talk about specialty pharmacy. You know, I think we mentioned before to you and the everybody on the call that we have our strategy, a lot of times pharma companies said we're gonna have a hub or a specialty pharm that's our favorite. A lot of times the local doctors wanna use their local specialty pharm. Amy has built a network of, you know, first of all national players like Sterling and a number of regional players. We, you know, rather than putting all our eggs in one basket. That's, you know, specialty pharm, where doctors write the script, you know, you know, they wanna make sure the paperwork's filled out right. If there's the Letter of Medical Necessity to be done. They provide that service. That's for an office-based doc. In a Nurx model, it works a little bit differently. In that case, it's a truly a tele-prescribing. They employ doctors around the countries, you know, and then patients dial in, you know, and they wanna consult with the doctor. In this case, they wanna talk about contraception. The doctor at that point, you know, if they're a new start patient, you know, more than likely they're gonna counsel them on all the methods. All right? Including now patch. We are their preferred patch, you know. If they're gonna offer a patch, it's gonna be the Agile Patch Twirla. You know, we are in a unique relationship with them that with its partners, a true partnership. The doctor, let's say, writes a script for Twirla. They have a pharmacy, no different than an online pharmacy. The patient gets a choice, if you will. They could have it sent to their home through their online pharmacy, or they can have the script grabbed at CVS. Back to your question, you know, Oren, the way those scripts flow through, these doctors are gonna be more than likely captured in Symphony, like a retail doctor. In this case, you're gonna have optics and visibility and. You know, our reps, you know, if they have relationships with doctors, we know who they are. You know, we try to service them. You know, but these doctors generally don't have offices the way we think of offices. They sit, you know, in a unique situation online, you know, and just counsel the patients like that. They don't really have an office the way we think, an exam room and things like that. They're really doing online services. That's the way the patients flow. Beginning, you know, in the second quarter, you know, May first was our kinda go-l ive date, Twirla's the only patch they're offering, you know. You know, we're, you know, expecting, you know, that business kicks off in this quarter, and we expect that really augments our growth in the second half of the year, as I mentioned. That's the way the model works, and that's the way the ins and outs work. Begs an interesting question. If you're not calling on these docs directly like you would a traditional office-based physician, I guess what is the model for them being educated? Yeah. Is that done? Are they- Yeah. Ready to go? Are they... You know, how are they determining what sort of patient is best for. Yeah. for Twirla? Yeah, great question. We do train them. Like Amy, you know, first and foremost trains you know, their pharmacists and their marketing people. We do joint marketing. Amy, you know, and the home office people, I'll call, you know, Oren, has already trained them up. You know, her partner, Kimberly Whelan, you know, who's our Reimbursement and our Advocacy specialist, talked about, you know, talking through how to handle these letters of medical necessity. On the doctor's level, you know, our docs, Paul Korner in our home office has educated these doctors, you know. We've actually did a teach-in, you know. We make ourselves available, you know, to them and say, "Hey, if you have any questions, we can service you." You know, we do call on some of their doctors in the community. You know, our reps have some relationships with some of them. Again, it's not a traditional office setting. We don't go there and say, "Here's your one sample." They don't want samples. It's all done online. It's, you know, if we can, if we can get in front of them, we do. In the meantime, we, it's probably more effective that Amy handles it at a national level. We did a rollout. We did a training, a teach-in, and, you know, they asked a lot of questions, and they got, you know, kind of a private seminar with Paul Korner and Amy and Kimberly. From time to time, we'll check in with them. Say, "Okay, is there any questions? What are you hearing?" It's a lot more home office-driven, if you will. That's kind of the way the organization rolled it out. You know, they're excited. I believe, and this is the first time they've had a formal relationship with a brand, you know. I think this is a really important turning point for that, their model. You know, clearly. Interesting. brands have better margins. It's. They're excited. They're excited. We're excited. They're excited. Just a win-win for both companies, Oren. If that's the case, that it's sort of the first brand partnership for them, is it presumptuous for me to think that this is actually relatively important for them to show that it can be successful and actually drive demand for your product so they can do more of these with other companies in the future? Oh, sure. Oh, sure. I mean, this is. I mean, I've been involved with their CEO. He's a super. I believe we. This is a top to top. It's important to both organizations. Yes. I mean, we wanna prove principle here. You know, I just wanna clarify. To the best of my knowledge, is that the only brand they've ever dwelled, or certainly in contraception? They do other verticals, you know. I believe this is the first one ever. Look, brand's a little bit more complicated. It's a lot easier to dispense generic. You know, so they, you know. That's why, you know, filling out these forms and all that stuff is, you know, it's important for them to understand it. also understanding clinically what's different about our patch versus, the other patches out there. Sure. I'm sorry. Is this gonna take a few months to sorta ramp up, especially with the, you know, adjudication letters and ethical, is this more a second half thing than a second quarter? Yeah, that's why we're guiding. I think we wanna kinda walk before we run, you know. you know, the other thing that I think is exciting for us, one last thing I maybe failed to mention. Since they have a pharmacy that they actually, you know, dispense out of, they buy product right from us. In this case, it doesn't go through the wholesalers. you know, which is, you know, nothing wrong with the wholesalers, but we make a better margin if people buy directly with us. we like this model, Oren, a lot for a lot of reasons. Does it- There's a new patient base for us. We're guiding to the second half to give us a chance to get our sea legs under us. I think, you know, they purchase product from us. That's a good thing. We're seeing that they're reordering. That's a good thing. You know, their doctors are starting to write. You know, we always wanna kinda dampen expectations as if it's some kind of hockey stick. I think we're gonna, you know, continue to grow that business and as they get more clinical experience with us. The gross to nets on volume that goes through there, is that... Which end of the spectrum then all in, with their cut versus no wholesaler fees, you know, from retail to non-retail? I mean, our most profitable patient, as we said on the call, is a commercial patient. If a commercial patient flows through there, it kicks them up to a different level in a gross to net, you know. It's just because you're saving the margin on, quite frankly, because of you're not going from, you know, a wholesale organization. It's coming directly from the manufacturer. We pick up margin right there, even though they do get a margin. Just so I'm clear, they do get a kind of a wholesaling margin, but it's a lot more efficient, kinda just going directly to them. We pick up some margin. It's the same rank and order, Oren. Commercial is always first. You know, Medicaid, in this case, that's the Afaxys. This business won't flow through there. It's just kind of, you know, gives a couple of little bit extra points on the margin. Okay. Speaking of margins, on gross margin, it ticked down this quarter. I know it's been lumpy. Can you just help us understand what COGS or gross margins look like going forward? Yeah. through this year and long term as this product grows? Oh, yeah. I think this is just a little bit of a speed bump. We, you know, it's directly related to our sales and our volume and as I mentioned in there, the mix. Proportionally, the Afaxys business, you know, kind of, was more of a piece of our business in the first quarter. We kinda took a haircut on the gross to net to get in the business, and then it flows through to margin a little bit. There's nothing there. It's a little. We make some allocations and, you know, I think the good news is we broke through and we're generating margin. That new graph. Yeah. We're showing is my, now my favorite graph. I mean, hopefully, you and everybody else can see that we're closing in. We're closing in. If you look at the gap between those two, the red line and the green line, that's the loss, if you will. You look at the where we started. Sure. -and where we are now, and hopefully you can see. My job is to make those lines cross, Oren. I need the green line to get bigger, and I need the red line to get smaller. That's, that's the goal. That's why we're so confident that this company's, you know, zooming in, Oren, on cash flow, you know, to generate cash flow. That's. The margin's important, clearly, and OpEx management's important, but the best way to grow margin is your top line, right? I can't worry about- Right. the allocation. If I could shift to the non-retail channel, which, you know, you haven't spoken about as much on this call as in the past. Can you just remind us? You know, I can see in the data it's still going strong. Are we expecting any steps up or acceleration also in that business through this year as well? Like, are you expecting any new, Planned Parenthood material wins to kick in this year? Yeah. We're getting them already. Yeah, we've got it, getting them. Every Planned Parenthood, as we mentioned in the past, sort of has a different philosophy of how to bring on a new product. The first couple we got were what Amy was calling a complete conversion. They're like, "All right, you're in. We're not gonna use any other product, any other patch." It's kind of a, was a winner-take-all situation. Other ones tend to work down their inventory a little bit of, you know, of competitive products. We've landed some big accounts, you know, that are more in a work down. What that looks like, Oren, is what you're seeing in the, you know, your, you got IQVIA, but, more of a steady-state. T he answer is we keep picking up big accounts. They come online, sort of what I said before, you understand one Planned Parenthood, you understand one, you know. They all have a different. Okay. philosophy of transitioning. These newer ones seem to be in more of a, kind of a work down of their inventory versus, you know, kind of just one day you wake up and you got it all, you know. I like the latter one, by the way, better. Once they work through that. Sorry to interrupt, I'm sorry. Yeah. Once they work through that inventory, though, Do they tend to be exclusive that they're just doing Twirla? Oh, yeah. Yeah. Yeah. Oh, yeah. The a ll roads lead to exclusivity. Yeah. Yeah, they convert. Okay. They convert. Rather than convert, you know, like the hard part about the first model is you have to wait for that first purchase order. Like, when are they gonna get through that inventory, right? Amy and I pace in the offices and, you know. On the other one, you start seeing inventory being purchased as you go, and every week it gets bigger. You know what I mean? As they work down their inventory. 'Cause a lot of times these Planned Parenthood have multiple clinical sites. They, you know, so once they kind of exhaust their inventory, they start buying. It's steady and consistent growth, and then we get another account and you start it again. Really pretty exciting business though. I mean, it's really becoming important. The most important reason we're excited is that we're influencing the spillover we talk to everybody about. You know, once the Planned Parenthood come online, the local zip codes around them start writing more. The patients flow in the community, the docs go in the community. Our market share in the retail segments are growing in the epicenters around these clinics. Which is really exciting because clearly that's a better book of business for us. Everything's working. Yeah. Everything Amy, you seem to deserve a lot of credit. All right. Well, that was my last question that you beat me to it on the spillover. I think that does it for me. I appreciate all the patience. No, my pleasure, Oren. Thank you. All right. Thanks. Thank you. I would now like to turn it back to Matt Riley for closing remarks. I was gonna say Al, I'll close it out. Thank you. I think Oren takes everybody's questions, and we lose people out of the queue. Thank you, Oren. Just kidding, though. Great questions. I hope your takeaway from this call is that how excited we are about our consistent growth and our confidence that, you know, we've said it a number of times, this isn't a one-and-done quarter. We've showed you multiple quarters of consistent growth and consistent OpEx manage, which gives us a lot of confidence that I can say that we feel we're gonna have a strong quarter two. but the big picture, you know, we still feel confident that we're on track to deliver our promises that you'll see a $25 million-$30 million net revenue year for us. You know, our ultimate prize is the graph that Oren and I were just talking about, of getting those lines to cross. You know, the bigger we get our top line and the better we do at OpEx management, we can deliver, you know, the ultimate prize for us, which is to generate positive cash flow out of this business on the backs of one brand. Then, you know, then as we continue along and show people what we're doing, you know, it puts us in a position to be a candidate, you know, that somebody else can trust us with their brand. That's how this all comes together. You know, we are on the goal line, folks, and I really appreciate everybody's support, the support of our partners, that we've mentioned, but some we don't mention enough, Corium and Syneos, for instance, are just been fabulous business partners to us. We have established a business model we have a lot of confidence in. You should expect growth in the second quarter and expect that this will keep going. We love the fact that it's all in all books of business, that the growth is coming from all our channels. Thank you, and we really appreciate your support and staying close to our story. Everybody have a good day. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.