What is the current TherapeuticsMD Inc share price?

The current share price of TherapeuticsMD Inc is US$ 1.93

How many TherapeuticsMD Inc shares are in issue?

TherapeuticsMD Inc has 11,574,362 shares in issue

What is the market cap of TherapeuticsMD Inc?

The market capitalisation of TherapeuticsMD Inc is USD 22.34M

What is the 1 year trading range for TherapeuticsMD Inc share price?

TherapeuticsMD Inc has traded in the range of US$ 0.9811 to US$ 2.95 during the past year

What is the PE ratio of TherapeuticsMD Inc?

The price to earnings ratio of TherapeuticsMD Inc is 262.45

What is the cash to sales ratio of TherapeuticsMD Inc?

The cash to sales ratio of TherapeuticsMD Inc is 6.73

What is the registered address of TherapeuticsMD Inc?

The registered address for TherapeuticsMD Inc is 951 Yamato Road, Boca Raton, Florida, 33431

What is the TherapeuticsMD Inc website address?

The website address for TherapeuticsMD Inc is www.therapeuticsmd.com

Which industry sector does TherapeuticsMD Inc operate in?

TherapeuticsMD Inc operates in the Pharmaceuticals sector

TherapeuticsMD【TXMD】銘柄情報

期間 †	前日比	前日比 %	始値	高値	安値	平均出来高	VWAP
1	-0.13	-6.31067961165	2.06	2.12	1.84	107609	1.96947499	CS
4	-0.01	-0.515463917526	1.94	2.17	1.84	39626	1.99924357	CS
12	-0.25	-11.4678899083	2.18	2.4	1.84	28655	2.05569804	CS
26	0.27	16.265060241	1.66	2.95	1.58	55029	2.12408452	CS
52	0.72	59.5041322314	1.21	2.95	0.9811	89663	1.56122618	CS
156	-2.11	-52.2277227723	4.04	4.35	0.7	89750	1.53376366	CS
260	0.67	53.1746031746	1.26	11.69	0.1503	1277422	1.04399973	CS

期間 †

前日比

前日比 %

始値

高値

安値

平均出来高

VWAP

-0.13

-6.31067961165

2.06

2.12

1.84

107609

1.96947499

-0.01

-0.515463917526

1.94

2.17

1.84

39626

1.99924357

-0.25

-11.4678899083

2.18

2.4

1.84

28655

2.05569804

0.27

16.265060241

1.66

2.95

1.58

55029

2.12408452

0.72

59.5041322314

1.21

2.95

0.9811

89663

1.56122618

156

-2.11

-52.2277227723

4.04

4.35

0.7

89750

1.53376366

260

0.67

53.1746031746

1.26

11.69

0.1503

1277422

1.04399973

Amended Statement of Ownership: Solicitation (sc 14d9/a)
June 28 2022 - 04:32PM
Edgar (US Regulatory)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14D-9

(Rule 14d-101)

SOLICITATION/RECOMMENDATION STATEMENT

UNDER SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 1)

TherapeuticsMD, Inc.

(Name of Subject Company)

TherapeuticsMD, Inc.

(Name of Person(s) Filing Statement)

COMMON STOCK, PAR VALUE $0.001 PER SHARE

(Title of Class of Securities)

88338N206

(CUSIP Number of Class of Securities)

Hugh O’Dowd

Chief Executive Officer

TherapeuticsMD, Inc.

951 Yamato Road, Suite 220

Boca Raton, FL 33431

Telephone: (561) 961-1900

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications

on Behalf of the Person(s) Filing Statement)

With copies to:

Marlan Walker

General Counsel

TherapeuticsMD, Inc.

951 Yamato Road, Suite 220

Boca Raton, FL 33431

Telephone: (561) 961-1900

Joshua M. Samek, Esq.

J.A. Glaccum, Esq.

DLA Piper LLP (US)

200 South Biscayne Boulevard, Suite 2500

Miami, Florida 33131

Telephone: (305) 423-8500

?
Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

This Amendment No. 1 (this “Amendment”) to Schedule 14D-9 amends and supplements the Solicitation / Recommendation Statement on Schedule 14D-9 previously filed by TherapeuticsMD, Inc., a Nevada corporation (the “Company,” “TherapeuticsMD,” “we,” “our” or “us”), with the Securities and Exchange Commission on June 13, 2022 (the “Schedule 14D-9”), relating to the cash tender offer by Athene Merger Sub, Inc. (“Merger Sub”), a Nevada corporation and wholly-owned subsidiary of Athene Parent, Inc., a Nevada Corporation (“Parent”), to purchase all of the issued and outstanding shares of the Company’s common stock, par value $0.001 per share (the “Shares”), at a purchase price of $10.00 per Share, net to the seller in cash, without interest, and subject to withholding taxes, upon the terms and subject to the conditions set forth in the Agreement and Plan of Merger, dated as of May 27, 2022, by and among the Company, Parent and Merger Sub, the Offer to Purchase, dated as of June 6, 2022 and the related Letter of Transmittal, each of which may be amended or supplemented from time to time.

Except as otherwise set forth in this Amendment, the information set forth in the Schedule 14D-9 remains unchanged and is incorporated herein by reference to the extent relevant to the items in this Amendment. Capitalized terms used but not defined herein have the meanings ascribed to them in the Schedule 14D-9.

Item 4. The Solicitation or Recommendation.

The subsection of Item 4 of the Schedule 14D-9 entitled “Background of the Transactions” is hereby amended as follows:

On page 18, the first full paragraph is amended and supplemented by adding the following sentences as the fourth and fifth sentences of the paragraph:

Substantially all of the confidentiality agreements signed in connection with the Company’s attempted refinancing processes included a customary standstill provision for the benefit of the Company that permitted the counterparty and its affiliates to initiate private discussions with, and submit confidential private proposals to, the Company. None of the confidentiality agreements contained a provision prohibiting the participants in the process from making any request that the Company waive the standstill restriction, known as a “don’t ask/don’t waive” provision.

On page 18, the fifth full paragraph is amended and supplemented by adding the following sentence at the end of the paragraph:

Mr. Borkowski left the Company to pursue other opportunities.

On page 19, the first full paragraph is amended and supplemented by adding the following sentence as the second sentence of the paragraph.

Mr. Finizio’s departure was part of a CEO succession plan.

On page 19, the final paragraph is amended and restated as follows (new language underlined):

A total of 27 parties engaged in the process signed confidentiality agreements with the Company, including six potential strategic parties and 21 potential financial sponsors. All of the confidentiality agreements included a customary standstill provision for the benefit of the Company that permitted the counterparty and its affiliates to initiate private discussions with, and submit confidential private proposals to, the Company. Eight of the confidentiality agreements (including Bidder Party C) contained “fallaway” provisions pursuant to which either the confidentiality agreement would be terminated or the standstill provision would no longer be applicable in certain circumstances. The standstill provision in Bidder Party C’s confidentiality agreement is no longer in effect. None of the confidentiality agreements contained a provision prohibiting the participants in the strategic process from making any request that the Company waive the standstill restriction, known as a “don’t ask/don’t waive” provision. Of the 27 parties that signed confidentiality agreements, four ultimately submitted non-binding indications of interest to acquire the Company – EW, “Bidder Party A,” “Bidder Party B” and “Bidder Party C.”

On page 20, the fifth paragraph is amended and supplemented by adding the following sentence at the end of the paragraph:

The indication of interest noted that EW could be a “value-added partner to management and the company,” that EW takes “the approach of partnering with our portfolio companies and management teams to help grow each company,” and that a key component of EW’s previous experience in building high growth companies in the pharmaceutical space “is each company was led by a highly experienced, successful management team.” Neither this indication of interest nor any subsequent communication otherwise mentioned management retention or director participation in the surviving corporation or any terms for management compensation or equity participation in the surviving corporation.

On page 22, the fourth full paragraph is amended and supplemented by adding the following sentence at the end of the paragraph:

Mr. D’Arecca resigned to become the Chief Financial Officer of another public company.

The subsection of Item 4 of the Schedule 14D-9 entitled “Summary of Greenhill’s Financial Analysis” is hereby amended as follows:

On page 38, the paragraph under the subsection “Other” is amended and restated as follows (new language underlined):

For the information of the Board of Directors and for reference purposes only, Greenhill observed that the most recent publicly available price target for the Company’s Common Stock, published on May 16, 2022, by Cantor Fitzgerald, the sole Wall Street research firm analyst that covers the Company, was $1.00 per share.

On page 39, the second full paragraph is amended and restated as follows (new language underlined):

Greenhill has acted as financial advisor to the Company in connection with the Transaction. Except in connection with Greenhill’s engagement as financial advisor to the Company in connection with the Strategic Process and the Financing Process, during the two years preceding the date of its opinion Greenhill had not been engaged by, performed any services for or received any compensation from the Company, Parent or their respective affiliates. Under the terms of Greenhill’s engagement with the Company, the Company has agreed to pay Greenhill a monthly advisory fee in the amount of $125,000 per month since January 2022. The Company has agreed to pay Greenhill a fee for rendering its opinion equal to $1,000,000 and an M&A Transaction advisory fee in the amount of $3,250,000, which includes the $1,000,000 opinion fee, the principal portion of which is contingent on the consummation of the Transaction. The Company has also agreed to pay Greenhill a fee in the amount of $250,000 in connection with certain amendments to or waivers under the Company’s Financing Agreement entered into in connection with the Transaction, $125,000 of which would be credited against the M&A Transaction advisory fee. Pursuant to its engagement agreement with the Company, Greenhill would also be entitled to be paid certain advisory fees if, rather than the Transaction, the Company had engaged or does engage in certain restructuring or financing transactions, including, in addition to the monthly advisory fee referenced above, a $3,250,000 restructuring transaction fee if the Company consummated a restructuring transaction and additional financing fees depending upon the type of capital raised. In addition, the Company agreed to indemnify Greenhill for certain liabilities arising out of its engagement.

The subsection of Item 4 of the Schedule 14D-9 entitled “Company Management’s Unaudited Projections” is hereby amended as follows:

On page 40, the first full paragraph is amended and supplemented by adding the following sentence at the end of the paragraph:

In assessing the effects the Manufacturing Failure Rates would have on projected cost of goods sold, the Company examined historical rates and, using its business and industry knowledge, updated such rates to reflect manufacturing process improvements and the supplemental New Drug Application approval.

On page 40, the third full paragraph is amended and supplemented by adding the following sentence at the end of the paragraph:

Further, the Projections were prepared based on the explicit assumption that the Company would have sufficient capital to fund its operations during the forecasted period, which it currently does not.

On page 40, the last paragraph is amended and supplemented by adding the following sentence at the end of the paragraph:

The information presented in this section is forward-looking in nature and, therefore, the information should be read in light of the factors discussed in Item 8 under the section titled “—Forward-Looking Statements.”

The subsection “Projections” beginning on page 41 is deleted and replaced with the following:

The following tables present summary selected unaudited projected financial information for the Company on a standalone basis prepared by management in connection with the review of the proposed strategic transaction with Parent and Merger Sub as provided to Parent.

January Projections:

(in thousands) Fiscal Year
2022 2023 2024 2025 2026
Revenue, Net:

Product

$ 132,061 $ 236,250 $ 371,027 $ 537,559 $ 698,566
License/royalty revenue

$ 1,000 $ 2,000 $ 3,000 $ 4,000 $ 5,000
Total revenue, net

$ 133,061 $ 238,250 $ 374,027 $ 541,559 $ 703,566
Cost of goods sold

$ 22,919 $ 40,742 $ 63,960 $ 92,608 $ 120,312
Total gross profit

$ 110,142 $ 197,509 $ 310,067 $ 448,951 $ 583,254
Operating Expenses:

Selling and marketing

$ 80,885 $ 89,326 $ 142,603 $ 143,124 $ 148,918
General and administrative

$ 54,138 $ 55,762 $ 58,096 $ 60,532 $ 63,076
Research and development

$ 11,457 $ 11,801 $ 24,614 $ 15,643 $ 14,917
Total operating expenses

$ 146,481 $ 156,889 $ 225,313 $ 219,299 $ 226,911
Operating income (loss)

$ (36,339 ) $ 40,620 $ 84,755 $ 229,652 $ 356,343
Non-cash compensation

$ 9,564 $ 9,851 $ 10,343 $ 10,860 $ 11,403
Depreciation and amortization

$ 4,541 $ 4,995 $ 5,495 $ 6,044 $ 6,648
Adjusted EBITDA

$ (22,234 ) $ 55,465 $ 100,592 $ 246,556 $ 374,395
April Projections:

(in thousands) Nine months
ended December 31,
2022 Fiscal Year
2023 2024 2025 2026
Revenue, Net:

Product

$ 107,550 $ 236,250 $ 371,027 $ 537,559 $ 698,566
Revenue from vitaCare

$ 25 — — — —
License/royalty revenue

$ 750 $ 2,000 $ 3,000 $ 4,000 $ 5,000
Total revenue, net

$ 108,325 $ 238,250 $ 374,027 $ 541,559 $ 703,566
Cost of goods sold

$ 20,681 $ 43,873 $ 67,758 $ 98,306 $ 127,719
Total gross profit

$ 87,644 $ 194,377 $ 306,269 $ 443,253 $ 575,847
Operating Expenses:

Selling and marketing

$ 64,291 $ 89,326 $ 142,603 $ 143,124 $ 148,918
General and administrative

$ 49,408 $ 67,876 $ 72,076 $ 76,707 $ 79,251
Research and development

$ 9,357 $ 11,801 $ 24,614 $ 15,643 $ 14,917
Total operating expenses

$ 123,056 $ 169,003 $ 239,293 $ 235,474 $ 243,086
Operating income (loss)

$ (35,413 ) $ 25,374 $ 66,976 $ 207,779 $ 332,761
Non-cash compensation

$ 5,936 $ 9,851 $ 10,343 $ 10,860 $ 11,403
Depreciation and amortization

$ 3,120 $ 4,995 $ 5,495 $ 6,044 $ 6,648
Adjusted EBITDA

$ (26,357 ) $ 40,219 $ 82,814 $ 224,684 $ 350,813
May Projections:

(in thousands) Nine months
ended
December 31,
2022 Fiscal Year
2023 2024 2025 2026
Revenue, Net:

Product

$ 114,150 $ 236,250 $ 371,027 $ 537,559 $ 698,566
Revenue from vitaCare

$ 25 — — — —
License/royalty revenue

$ 750 $ 2,000 $ 3,000 $ 4,000 $ 5,000
Total revenue, net

$ 114,925 $ 238,250 $ 374,027 $ 541,559 $ 703,566
Cost of goods sold

$ 21,498 $ 42,370 $ 66,230 $ 96,014 $ 124,739
Total gross profit

$ 93,427 $ 195,880 $ 307,797 $ 445,545 $ 578,827
Operating Expenses:

Selling and marketing

$ 64,291 $ 89,326 $ 142,603 $ 143,124 $ 148,918
General and administrative

$ 49,408 $ 67,876 $ 72,076 $ 76,707 $ 79,251
Research and development

$ 9,357 $ 11,801 $ 24,614 $ 15,643 $ 14,917
Total operating expenses

$ 123,056 $ 169,003 $ 239,293 $ 235,474 $ 243,086
Operating income (loss)

$ (29,629 ) $ 26,877 $ 68,504 $ 210,071 $ 335,741
Non-cash compensation

$ 6,046 $ 9,851 $ 10,343 $ 10,860 $ 11,403
Depreciation and amortization

$ 3,120 $ 4,995 $ 5,495 $ 6,044 $ 6,648
Adjusted EBITDA

$ (20,464 ) $ 41,723 $ 84,342 $ 226,976 $ 353,793
Milestone Payments (Annovera Licensing)

— $ (40,000 ) $ (40,000 ) — $ (40,000 )
Net working capital changes

$ (38,093 ) $ 7,954 $ 1,627 $ (29,954 ) $ (25,421 )
Capital expenditures

$ (870 ) $ (1,995 ) $ (2,495 ) $ (3,044 ) $ (3,648 )
Cash taxes(1)

— $ (162 ) $ (324 ) $ (1,080 ) $ (1,755 )
Unlevered free cash flow

$ (59,426 ) $ 7,520 $ 43,150 $ 192,898 $ 282,968

(1)
Reflects management expectations of minimal cash taxes due at the federal level due, in part, to significant net operating losses of $885.1 million (as of December 31, 2021) and at the state level due to net operating losses of $38.0 million (as of December 31, 2021). Actual state cash taxes paid in projected future periods could vary due to certain state limitations on the use of NOL carryforwards, pre-tax income in an amount exceeding management’s current estimates, and other factors.

The table below presents liquidity projections for the Company on a standalone basis prepared by management in connection with the review of the proposed strategic transaction with Parent and Merger Sub as provided to Greenhill. This liquidity forecast was based on the Company’s standalone operations without giving effect to any new capital, interest payments, or debt repayment and was prepared for analytical purposes only.

Week Split
($s in thousands) Six Days 1 Day
5/27/2022 6/3/2022 6/10/2022 6/17/2022 6/24/2022 6/30/2022 7/1/2022 7/8/2022 7/15/2022 7/22/2022 7/29/2022 8/5/2022 8/12/2022
Total Net Receipts

$ 7,993 $ 4,592 ($ 486 ) $ 4,694 $ 1,362 $ 1,450 $ 597 $ 2,491 ($ 1,456 ) $ 1,097 $ 3,057 ($ 623 ) $ 2,292
Corporate Expenses

(3,803 ) (3,015 ) (2,654 ) (1,250 ) (2,242 ) (425 ) (923 ) (3,448 ) (250 ) (2,890 ) (250 ) (2,330 ) (550 )
vitaCare Expenses

— — — — — — — — — — — — —
IT Expenses

— — (260 ) — — — — — — (140 ) — (185 ) (75 )
Commercial Expenses

(359 ) (395 ) (1,879 ) (262 ) — — (1,335 ) — — (462 ) — (2,455 ) (2,474 )
Production Cost

(316 ) (282 ) — (505 ) (608 ) — (150 ) — (1,038 ) — — — —
A/P Aging - Other

(300 ) (300 ) (300 ) (300 ) (300 ) — (300 ) (300 ) (300 ) (300 ) (300 ) (600 ) (600 )
Interest / Debt Repmt

— — — — — — — — — — — — —

Net Cash Flow

$ 3,216 $ 599 ($ 5,579 ) $ 2,377 ($ 1,788 ) $ 1,025 ($ 2,111 ) ($ 1,257 ) ($ 3,044 ) ($ 2,695 ) $ 2,507 ($ 6,193 ) ($ 1,406 )

Beginning Cash

19,297 22,513 23,112 17,533 19,910 18,122 19,147 17,036 15,779 12,735 10,039 12,546 6,354

Ending Cash

$ 22,513 $ 23,112 $ 17,533 $ 19,910 $ 18,122 $ 19,147 $ 17,036 $ 15,779 $ 12,735 $ 10,039 $ 12,546 $ 6,354 $ 4,948

Item 8. Additional Information.

The subsection of Item 8 of the Schedule 14D-9 entitled “Legal Proceedings” is hereby amended and restated as follows (new language underlined):

Legal Proceedings.

As of the date of this Schedule 14D-9, there are currently no legal proceedings pending relating to the Offer or the Merger.

On June 15, 2022, a stockholder complaint was filed in the United States District Court, Southern District of New York, against the Company and the individual members of the Company’s Board, captioned O’Dell v. TherapeuticsMD, Inc., et al., Case No. 1:22-cv-5001 (the “O’Dell Complaint”). On June 20, 2022, a stockholder complaint was filed in the United States District Court, Southern District of New York, against the Company and the individual members of the Company’s Board (other than Mr. O’Dowd), captioned Ravichandran v. TherapeuticsMD, Inc., et al., Case No. 1:22-cv-05160 (the “Ravichandran Complaint”). On June 20, 2022, a stockholder complaint was filed in the United States District Court, Southern District of New York, against the Company and the individual members of the Company’s Board, captioned Wilson v. TherapeuticsMD, Inc., et al, Case No. 1:22-cv-05172 (the “Wilson Complaint”). On June 24, 2022, a stockholder complaint was filed in the United States District Court, Eastern District of New York, against the Company and the individual members of the Company’s Board, captioned Coffman v. TherapeuticsMD, Inc., et al., Case No. 1:22-cv-03736 (the “Coffman Complaint”). On June 26, 2022, a stockholder complaint was filed in the United States District Court, Southern District of New York, against the Company and the individual members of the Company’s Board and certain members of management, captioned Woolard v. TherapeuticsMD, Inc., et al., Case No. 1:22-cv-05392 (the “Woolard Complaint” and together with the O’Dell Complaint, the Ravichandran Complaint, the Wilson Complaint, and the Coffman Complaint, the “Federal Stockholder Complaints”).

Each of the Federal Stockholder Complaints assert that the defendants violated Section 14(e), Section 14(d) and Section 20(a) of the Exchange Act and certain rules and regulations promulgated thereunder by allegedly making false and misleading statements, or failing to disclose allegedly material facts necessary to make the statements made not misleading, relating to the Merger in this Schedule 14D-9, including allegations relating to the background of the Merger, financial projections, and analyses of the Company’s financial advisor.

The Company believes that the Federal Stockholder Complaints are without merit. However, in order to avoid the costs, risks and uncertainties inherent in litigation, and to moot the allegations contained in the Federal Stockholder Complaints, the Company is providing certain additional disclosures (“Supplemental Disclosures”) in this Amendment. The Supplemental Disclosures should not be regarded as an indication that the Company, EW Healthcare Partners, or the Company’s or EW Healthcare Partners’ respective affiliates, officers, directors or other representatives, or any recipient of this information, considered or now considers the information contained in the Supplemental Disclosures to be material; rather, the Company believes that the Schedule 14D-9 as filed on June 13, 2022 disclosed all necessary information and denies that any additional disclosures are or were required under any federal or state law.

Additional complaints may be filed in connection with the transactions contemplated by the Merger Agreement, the Schedule TO and the Schedule 14D-9. If additional similar lawsuits are filed, absent new or different allegations that are material, the Company will not necessarily announce such additional filings. In addition to the complaints referenced above, eight demand letters have been received from purported stockholders of TherapeuticsMD as of the date of this filing, each asserting disclosure claims similar to those asserted in the Federal Stockholder Complaints.

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.

Dated: June 28, 2022

THERAPEUTICSMD, INC.
By:
/s/ Marlan D. Walker

Marlan D. Walker
Title: General Counse

TherapeuticsMD: Privatization Deal Expected To Meet With Shareholder Pushback
Jun. 16, 2022 2:43 PM ETTherapeuticsMD, Inc. (TXMD)

https://seekingalpha.com/article/4518823-therapeuticsmd-privatization-deal-shareholder-pushback

Summary
TherapeuticsMD’s $177 million buyout deal with EW Healthcare largely undervalues the biotech.
TherapeuticsMD is close to stimulating the commercialization of Annovera which may increase its value as a standalone company in the long run.
Shareholders were informed of a 50:1 reverse stock split at the end of Q1 2021 just a few days before the buyout was announced.
Investors are in support of the acquisition due to TherapeuticsMD's poor financial position but insist on better terms including an expanded bidding process.
Reaching an agreement in laboratory!
skynesher/E+ via Getty Images

News about the pending acquisition of TherapeuticsMD (NASDAQ:TXMD) by private equity firm EW Healthcare Partners has surprised the market. Over the past month, the share price has ticked higher by more than 200% after it trailed by 84.54% in the one-year analysis. Some investors have appreciated this acquisition with analysts viewing it as an opportunity for TXMD to increase the development and marketing of new products for women. Still, a lot needs to be unpacked now that TXMD will become a privately-held company upon the closure of the deal.

Thesis
The $10 per share compensation that TherapeuticsMD stockholders are set to receive in the $177 million deal with EW Healthcare may elicit fierce opposition seeing the company is already undervalued. As a going concern, the company had decried the growth of the net loss incurred in Q1 2022 with TXMD indicating its desire to raise additional capital to repay the principal balance of its financing agreement from April 2019. Still, the company needs to rethink the return on investments for shareholders seeing it is on the verge of commercializing ANNOVERA after the US FDA approved its supplemental New Drug Application (sNDA).

Below the 52-week High
Investors supporting this transaction will argue that the $10-a-share buying price for the Boca Raton-based company will be close to 5 times the 52-week low attained in May 2022 where it clocked $2.14. But at the same time, the price is close to 7 times less than the 52-week high of $67 reached by the same stock in 2022.

On another front, it can be argued that the company is nearing the commercialization of ANNOVERA. To control the manufacturing challenges, TXMD filed a supplemental New Drug Application (sNDA) with the FDA back in August 2021. This would allow the company to modify the testing specifications and allow heightened consistent ANNOVERA supply once approved. After rejecting the application in December 2021, the company responded to the CRL in January 2022 with an adjustment to the manufacturing testing limits according to the FDA's requirements. TXMD expected the FDA's approval of the NDA by the end of Q2 2022, but then the approval came at the beginning of the quarter.

We must remember that the NDA application is the channel through which TXMD will formally propose that the FDA approve ANNOVERA for sale and marketing in the US. What we are looking at here is TXMD's plot to lock shareholders out of the increased revenues expected from this increased commercialization. It must be noted that ANNOVERA's disaggregate revenues have been higher than its peers IMVEXXY and BIJUVA.

Annovera's large revenue share in TXMD
TherapeuticsMD 10-Q

ANNOVERA contributed more than 44% of the company's revenue in Q1 2022 and is scheduled to produce more upon TXMD's NDA approval. This aspect will contribute to the growth of the share price in the long run. Still to be noted is that as of June 2020, Annovera had 66% of nationwide unrestricted access for patients with commercial insurance in the US. Further, it had 44% unrestricted access in 38 states and Washington D.C. The Annovera birth control ring is the only long-lasting birth control method that a pharmacist can prescribe to a woman and dispense on site. A look at the global hormonal contraceptive market size shows that it is expected to grow to $21.52 billion by 2025. It was forecast to grow from $16.16 billion in 2020 to $18.1 billion in 2021 (at a CAGR of 12%).

The +200% hike in the share price over the past month, is proof of the market's appreciation of TXMD's acquisition. The company's finances are not yet out of the woods. As of Q1 2022, it incurred a net loss of $49 million with current liabilities exceeding its current assets by $180.4 million. Further, its total liabilities also exceeded its total assets by $140.6 million. Its financial agreement entered into in April 2019 was due on June 1, 2022. With only $30.4 million in cash, it is evident that the company's cash position is a matter of concern.

The cash used in operations and CapEx used in the 12 months leading to March 31, 2022, stood at $135.8 million. With only $30.4 million in cash, the company had only 2 months to deplete the resources. TXMD's book value per share has also remained in the negative territory since December 2020. It rose from -$10.89 in December 2021 to -$16.22 by March 2022 showing that it is highly insolvent. Therefore, this acquisition was more than necessary, but it has fallen short of expectations.

Still, investors need to understand how it got here and whether there is more to the deal than the $177 million buyout at $10 a share.

Aspects of the Acquisition
In my opinion, EW Healthcare has largely underpaid in the TXMD acquisition deal. Despite having a market cap of $88.03 million, the company's debt stands at $212.12 million and its enterprise value (EV) is $269.76 million. Some pre-market analysis shows that the share price jumped up to $40 pre-market (not just once) with a break-even of $56.

Moreover, announcing the acquisition in less than 2 months to the acquisition seems almost sinister. Yes, we get it the company does not have the money to last that long, but the management must have known of this crisis and somehow issued a warning on time. With the product development pipeline, some investors were even expecting the break-even price to rise to $90 just slightly above the 52-week high of $67.

Well, the argument may appear as an exaggeration, but investors who had placed long-bets stand to lose quite some money if the deal pulls through. How about inviting many bids and allowing shareholders to rake in the highest value.

Further, as of May 6, 2022, TXMD conducted a reverse stock split (in the ratio of 50:1) following the $49.0 million net loss in Q1 2022 that had $5.69 per basic and diluted common share. It fell against the $39.4 million or $5.67 per basic and diluted common share for Q1 2021. The corresponding shares were reduced from 600 million shares to 12.0 million to give effect to this stock split.

Lawsuits
Several law firms such as M&A and Bragar Eagel & Squire have filed lawsuits in connection with TXMD's breach of fiduciary duties and violation of the federal securities laws. This violation is in regards to the acquisition and privatization by EW Healthcare Partners. The class-action suits may be successful or not especially since the deal is expected to close in July 2022. But of special consideration is that all parties are in agreement that EW Healthcare is paying too little for this acquisition.

This deal reminds me of the Bayer's (OTCPK:BAYZF) Monsanto takeover back in 2018 which has been described by analysts as the worst deal ever. The $63 billion buyouts were followed by $10 billion in write-downs and litigation. EW Healthcare's deal with TXMD may lead to a huge upset of this firm once it is ruled in favor of shareholders. Still, among the big pharmaceutical companies, Merck & Co.'s (MRK) planned takeover of Acceleron Pharma towards the end of 2021 at $11.5 billion was largely opposed. Litigants argued that the payout undervalued the biotech that had a clear path to substantial value creation.

Bottom Line
TherapeuticsMD's deal with EW Healthcare is a classic example of biting the hand that one is fed upon. It is true, that the company is in dire need of a buyout. The high net losses, debts, and overall liabilities against assets are telling. Still, commercialization of Annovera is soon to be stimulated especially after the FDA approves TXMD's sNDA. Without considering the financial strain faced by the company at the moment, there is a substantial value to be created if the company decides to pursue this revenue stream. The $177 million deal undervalues the company, and it is even inadequate to pay off debts let alone buy out the company. Additionally, there are several lawsuits filed against this acquisition that should be considered. Our recommendation is to hold on to this stock with the hope that TXMD will be forced to review the deal or allow for more bidders to strengthen this acquisition. With less than 2 months to go until the completion of the deal, we await to see the results.