Evofem Biosciences, Inc.

Net product sales increased 42% sequentially to $6 million in Q2 2022, driven by higher ex-factory sales. Gross-to-net was 40% in the quarter, and total operating expenses declined 8% to $30.5 million, including R&D of $7.7 million. Loss from operations improved 16% to $24.4 million. Management reaffirmed full-year 2022 net product sales guidance of $30 million to $35 million, representing 264% to 325% year-over-year growth, and said gross-to-net should be 40% or better, trending lower in the second half. The company also reiterated an expectation to be cash flow breakeven on a quarterly basis no later than the end of 2023; at quarter-end it had $19.9 million of unrestricted cash and $1.6 million of restricted cash, and said current cash should fund operations into Q4.

Saundra Pelletier framed the quarter as evidence that Phexxi is gaining traction, citing four new datasets, payer wins, media attention, and growing awareness after the Roe v. Wade ruling. She emphasized that Phexxi is the only FDA-approved women-controlled non-hormonal contraceptive and argued that the current environment is increasing interest from both providers and patients. Her tone was highly optimistic and promotional, especially around the STI opportunity, where she said positive data could create a major value inflection.

Jay File highlighted the quarter-over-quarter improvement in sales, margins, and expense control: $6 million in net product sales, $30.5 million in operating expenses, and a $24.4 million operating loss. He said R&D was lower because the EVOGUARD trial was winding down, with costs expected to fall significantly in Q4 and beyond, and noted the company remains on track to cut costs by $50 million in 2022. On liquidity, he said Q2 included $18.1 million of net proceeds from an offering, $2 million from an equity line that was later terminated, and $22.4 million from warrant exercises through August 3; he also said cash should last into Q4, excluding any non-dilutive capital.

Analysts focused on whether Roe v. Wade was increasing demand, what the gross-to-net outlook looked like beyond 2022, and whether self-pay demand was rising. Management said provider interest has clearly increased, women are asking more about sustainable contraception access, and counseling activity has picked up; however, they said self-pay is still not a major part of the business and better visibility will come in Q3. They also said gross-to-net should remain in the 40% range through year-end and could improve over the next few years, helped by a new PBM contract, ACA-related coverage enforcement, and lower use of copay programs.