UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2024
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from _____ to _____
Commission
File Number: 001-00100
THERAPEUTICSMD, INC.
(Exact name of Registrant as specified in its Charter)
(Address of principal executive offices) (Zip Code)
561-961-1900
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of Each Class Trading symbol Name of each exchange on which registered
Common Stock, par value $0.001 per share TXMD The Nasdaq Stock Market LLC
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If an emerging
growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If securities
are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June
30, 2024, the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the market price at which the common equity was last sold was $13,408,634.
As of March
20, 2025, there were outstanding 11,574,362 shares of the registrant’s common stock, par value $0.001 per share.
Documents
Incorporated by Reference
Part III
(Items 10, 11, 12, 13 and 14) of this annual report on Form 10-K is incorporated by reference from the definitive Proxy Statement for
the 2025 Annual Meeting of Stockholders or an amendment to this annual report on Form 10-K to be filed with the Securities and Exchange
Commission no later than 120 days after the end of the registrant’s fiscal year covered by this report.
TABLE
OF CONTENTS
Page
Part I
Item 1. Business 1
Item 1A. Risk factors 11
Item 1B. Unresolved staff comments 37
Item 1C. Cybersecurity 37
Item 2. Properties 38
Item 3. Legal proceedings 39
Item 4. Mine safety disclosures 39
Part II
Item 6. Reserved 40
Item 7A. Quantitative and qualitative disclosures about market risk 49
Item 8. Financial statements and supplementary data 49
Item 9A. Controls and procedures 50
Item 9B. Other information 50
Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections 50
Part III
Item 10. Directors, executive officers and corporate governance 51
Item 11. Executive compensation 51
Item 14. Principal accountant fees and services 51
Part IV
Item 15. Exhibits and financial statement schedules 52
i
Part
I
Item
1. Business
Overview
Throughout
this Annual Report on Form 10-K (“2024 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®, BIJUVA®, and IMVEXXY®,
which are protected under applicable intellectual property laws and are the property of the Company. This 2024 10-K Report also contains
trademarks, trade names and service marks of other companies, which are the property of their respective owners. Solely for convenience,
trademarks, trade names and service marks referred to in this 2024 10-K Report may appear without the ®, TM or SM symbols, but
such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights
or the right of the applicable licensor to these trademarks, trade names, and service marks. We do not intend our use or display of other
parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply a relationship
with, or endorsement or sponsorship of us by, these other parties.
In addition,
this 2024 10-K Report includes market and industry data that we obtained from periodic industry publications, third-party studies and
surveys, government-agency sources, filings of public companies in our industry, and internal-company surveys. Industry publications
and surveys generally state that their information has been obtained from sources believed to be reliable. Although we believe that the
industry and market data below is reliable as of the date of this 2024 10-K Report, this information could prove to be inaccurate as
a result of a variety of matters.
Forward-looking
statements
This 2024
10-K Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking
statements involve substantial risks and uncertainties. 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 2024 10-K Report entitled “Business”
and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in this 2024
10-K Report generally. These statements are generally accompanied by words such as “intend,” “anticipate,” “believe,”
“estimate,” “potential(ly),” “continue,” “forecast,” “predict,” “plan,”
“may,” “will,” “could,” “would,” “should,” “expect,” or the negative
of such terms or other comparable terminology.
We have based
these forward-looking statements on our current expectations and projections about future events. We believe that the assumptions and
expectations reflected in such forward-looking statements are reasonable, based on information available to us on the date of this 2024
10-K Report, but we cannot assure you that these assumptions and expectations will prove to have been correct or that we will take any
action that we may presently be planning. These forward-looking statements are inherently subject to known and unknown risks and uncertainties.
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, competition from other businesses, market and general
economic factors, and the other risks discussed in Item 1A of this 2024 10-K Report. This discussion should be read in conjunction with
the consolidated financial statements and notes thereto included in this 2024 10-K Report.
1
We have identified
some of the important factors that could cause future events to differ from our current expectations and they are described in this 2024
10-K Report in the section entitled “Risk Factors” that you should review carefully. Please consider our forward-looking
statements in light of those risks as you read this 2024 10-K Report. If one or more of these or other risks or uncertainties materialize,
or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we project. 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.
Our company
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, currently receiving royalties on products licensed to pharmaceutical organizations that possess commercial
capabilities in the relevant territories. On December 30, 2022 (the “Closing Date”), we 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 (“Mayne Pharma Group”), in which we and our subsidiaries (i) granted Mayne Pharma
an exclusive license to commercialize our 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 our 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.
In a License
Agreement, dated December 4, 2022, between TherapeuticsMD and Mayne Pharma (the “Mayne License Agreement”), we 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.
Under the
Mayne License Agreement, Mayne Pharma will pay us one-time milestone payments 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 us royalties on net sales of all Products in
the United States at a royalty rate of 8.0% on the first $80.0 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 us 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.
Under the
Transaction Agreement, dated December 4, 2022, between TherapeuticsMD and Mayne Pharma (the “Transaction Agreement”), we
sold to Mayne Pharma, at closing, certain assets for Mayne Pharma to commercialize the Products in the United States, including, with
the Population Council’s consent, our exclusive license from the Population Council to commercialize ANNOVERA (the “Transferred
Assets”).
The total
consideration from Mayne Pharma to TherapeuticsMD for the purchase of the Transferred Assets under the Transaction Agreement 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.
2
On the Closing
Date, TherapeuticsMD 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 us approximately $1.0 million in prepaid
royalties on the Closing Date. The prepaid royalties reduced the first four quarterly payments that would have otherwise been payable
pursuant to the Mayne License Agreement by an amount equal to $257 thousand per quarterly royalty payment plus interest calculated at
19% per annum accruing from the Closing Date until the date such quarterly royalty payment was paid to us. We and Mayne Pharma settled
the $1.5 million of consideration due to Mayne Pharma for the assumed obligations under a long-term services agreement, including our
minimum payment obligations thereunder. As the parties agreed, Mayne Pharma reduced the second quarterly royalty payment otherwise payable
to us by an additional $0.6 million, and in August 2023 we remitted the remaining consideration of $0.9 million.
As part of
the transformation that included the Mayne License Agreement, all results associated with former commercial operations have been reflected
as discontinued operations in our consolidated financial statements. Assets and liabilities associated with the commercial business are
classified as assets and liabilities of discontinued operations in our consolidated balance sheets.
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.
Employees
As of December 31, 2024, we employed
one full-time employee primarily engaged in an executive position. We have engaged external consultants who support our relationship
with current partners and assist with certain financial, IT, legal, and regulatory matters and the continued wind-down of our historical
business operations. On August 15, 2023, we entered into a master services agreement with JZ Advisory Group, pursuant to which Joseph
Ziegler serves as our Principal Financial and Accounting Officer.
Going
concern
On the Closing
Date of the Mayne Transaction, we repaid all obligations under the Financing Agreement, dated as of April 24, 2019, as amended, with
Sixth Street Specialty Lending, Inc., as administrative agent, the various lenders from time-to-time party thereto, and certain of our
subsidiaries party thereto from time to time as guarantors (the “Financing Agreement”) and the Financing Agreement was terminated.
Following
the transaction with Mayne Pharma, our primary source of revenue is from royalties on products licensed to pharmaceutical organizations
that possess commercial capabilities in the relevant territories. We may need to raise additional capital to provide additional liquidity
to fund our operations until we become cash flow positive. To address our capital needs, we may pursue various equity and debt financing
and other alternatives. The equity financing alternatives may include the private placement of equity, equity-linked, or other similar
instruments or obligations with one or more investors, lenders, or other institutional counterparties or an underwritten public equity
or equity-linked securities offering. Our ability to sell equity securities may be limited by market conditions, including the market
price of our common stock and our available authorized shares.
3
To the extent
that we raise additional capital through the sale of such securities, the ownership interests of our existing stockholders will be diluted,
and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders.
If we are not successful in obtaining additional financing, we could be forced to discontinue or curtail our business operations, sell
assets at unfavorable prices, or merge, consolidate, or combine with a company with greater financial resources in a transaction that
might be unfavorable to us.
On May 1,
2023, we entered into a Subscription Agreement (the “Subscription Agreement”) with Rubric Capital Management LP (“Rubric”),
pursuant to which we agreed to sell to Rubric, or one or more of its affiliates, up to an aggregate of 5,000,000 shares of our common
stock, par value $0.001 per share (our “Common Stock”), from time to time during the term of the Subscription Agreement at
a purchase price of the five-day volume-weighted average price of the Common Stock at the time of the sale of such shares of Common Stock,
at an aggregate purchase price of up to $5,000,000. On June 29, 2023, we issued and sold 312,525 shares of Common Stock at a price per
share equal to $3.6797 pursuant to the Subscription Agreement. We received gross proceeds of $1.15 million from the draw down, before
expenses. On November 15, 2023, Rubric drew down an additional 877,192 shares of Common Stock at a price per share equal to $2.2761.
We received gross proceeds of $2.0 million from the drawdown, before expenses. There were no draw downs in 2024.
In February
2024, the Company received Mayne Pharma’s calculation of the net working capital allowances for payer rebates and wholesale distributor
fees pursuant to the Transaction Agreement, which differed significantly from the Company’s estimate of the allowances. The Company
continues to believe its estimated allowances for payer rebates and wholesale distributor fees are reasonable and intends to resolve
this matter through the processes permitted in the Transaction Agreement. The outcome of this matter is uncertain at this point. As a
result, the Company cannot reasonably estimate a range of loss, and accordingly, the Company has not accrued any additional liability
associated with Mayne Pharma’s allowance calculation for payer rebates and wholesale distributor fees, particularly as the Company
believes the outcome of this matter to be intertwined with the resolution of the net working capital allowance for returns.
In August
2024, the Company received information from Mayne Pharma pertaining to the net working capital allowance for returns that differs significantly
from the Company’s estimate of the allowance. As of December 31, 2024, the Company believed no additional accrual was required
for amounts that may be owed for the allowance for returns under the Transaction Agreement. The Company has not recorded any contingent
gains or receivables for any such allowances. Management continues to monitor the unresolved and pending net working capital items as
changes to estimated amounts owed or amounts due from Mayne Pharma may be material.
If Mayne Pharma’s sales of Licensed Products grow more slowly
than expected or decline, including as a result of Mayne Pharma Group’s pending sale to Cosette Pharmaceuticals, Inc. (“Cosette”),
if the net working capital settlement with Mayne Pharma under the Transaction Agreement is greater than our current estimates, if we are
unsuccessful with future financings or the supply chains related to the third-party contract manufacturers are worse than we anticipate,
our existing cash reserves may be insufficient to satisfy our liquidity requirements. The potential impact of these factors in conjunction
with the uncertainty of the capital markets raises substantial doubt about our ability to continue as a going concern for the next twelve
months from the issuance of the financial statements included in this Annual Report on Form 10-K.
The
accompanying consolidated financial statements included in this Annual Report on Form 10-K do not include any adjustments that might
be necessary if we are unable to continue as a going concern.
Portfolio
of our royalty-bearing products
On December
30, 2022, we changed our business to become a pharmaceutical royalty company, currently receiving royalties on products licensed to pharmaceutical
organizations that possess commercial capabilities in the relevant territories. On December 30, 2022, we granted an exclusive license
to commercialize IMVEXXY, BIJUVA, and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands and assigned
our exclusive license to commercialize ANNOVERA to Mayne Pharma.
4
IMVEXXY
(estradiol vaginal inserts), 4-μg and 10-μg
This pharmaceutical
product is for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and
vaginal atrophy due to menopause. 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.
On December
30, 2022, we granted an exclusive license to commercialize IMVEXXY in the United States and its possessions and territories to Mayne
Pharma. We also have entered into licensing agreements with third parties to market and sell IMVEXXY outside of the U.S. We entered into
the Knight License Agreement, with Knight pursuant to which, we granted Knight an exclusive license to commercialize IMVEXXY in Canada
and Israel. We entered into the Theramex License Agreement with Theramex pursuant to which we granted Theramex an exclusive license to
commercialize IMVEXXY for human use outside of the U.S., except for Canada and Israel. In December 2024, we transferred the right to
commercialize IMVEXXY in Israel from Knight to Theramex.
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 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 Mayne License Agreement.
BIJUVA
(estradiol and progesterone) capsules, 1 mg/100 mg
This pharmaceutical
product is the first and only FDA approved bioidentical hormone therapy combination of estradiol and progesterone in a single, oral capsule
for the treatment of moderate-to-severe vasomotor symptoms (commonly known as hot flashes or flushes) due to menopause in women with
a uterus.
On December
30, 2022, we granted an exclusive license to commercialize BIJUVA in the United States and its possessions and territories to Mayne Pharma.
We also have entered into the Knight License Agreement with Knight pursuant to which we granted Knight an exclusive license to commercialize
BIJUVA in Canada and Israel. We have entered into the Theramex License Agreement with Theramex pursuant to which we granted Theramex
an exclusive license to commercialize BIJUVA for human use outside of the U.S., except for Canada and Israel. In December 2024, we transferred
the right to commercialize BIJUVA in Israel from Knight to Theramex.
ANNOVERA
(segesterone acetate (“SA”) and ethinyl estradiol (“EE”) vaginal system)
This pharmaceutical
product is a one-year ring-shaped contraceptive vaginal system (“CVS”) and the first and only patient-controlled, procedure-free,
reversible prescription contraceptive that can prevent pregnancy for up to a total of 13 cycles (one year).
On
December 30, 2022, we assigned our exclusive license to commercialize ANNOVERA in the United States and its possessions and territories
to Mayne Pharma.
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 prenatal name to Mayne Pharma.
5
Sales
concentration
Our business
model is dependent on third parties achieving specified milestones and product sales. For information on the concentration of licenses
of our products, see “Note 9. Revenue” to the consolidated financial statements included in this 2024 10-K Report. Currently,
the Company collects license revenue from two licensees.
Seasonality
The pharmaceutical
markets in which we license our products are not subject to seasonal sales fluctuations. However, our license revenues for the first
quarter of each year can be negatively affected by the annual reset of high-deductible commercial insurance plans.
Manufacturing
of our licensed products
As of December
30, 2022, we were no longer responsible for any manufacturing and have no manufacturing contracts. All manufacturing responsibility of
our licensed and assigned products has been transferred to our licensees.
Research
and development
As of December
30, 2022, we no longer conduct any research and development activities. Historically, our product development programs were concentrated
in advanced hormone therapy pharmaceutical products.
Intellectual
property
Patents
and trademarks
Our success
depends, in part, on our ability to obtain patents, maintain trade-secret protection, and operate without infringing the proprietary
rights of others. Our intellectual property portfolio is one way we attempt to protect our competitive position. We rely primarily on
a combination of know-how, trade secrets, patents, trademarks, and contractual restrictions to protect our products and to maintain our
competitive position. We are diligently seeking ways to protect our intellectual property through various legal mechanisms in relevant
jurisdictions. Where permitted, patents for our hormone therapy drug products have been submitted to the Orange Book.
As of December
31, 2024, we have many domestic and foreign patents that cover our licensed products, including many for each of BIJUVA and IMVEXXY that
are Orange Book listed for the licensed products.
We hold multiple
U.S. trademark registrations and have numerous pending trademark applications. Issuance of a federally registered trademark creates a
rebuttable presumption of ownership of the mark; however, it is subject to challenge by others claiming first use in the mark in some
or all the areas in which it is used. Federally registered trademarks have a perpetual life so long as they are maintained and renewed
on a timely basis and used properly as trademarks, subject to the rights of third parties to seek cancellation of the trademarks if they
claim priority or confusion of usage. We believe our patents and trademarks are valuable and provide us certain benefits in marketing
our products.
We intend
to actively protect our intellectual property with patents, trademarks, trade secrets, or other legal avenues for the protection of intellectual
property and to aggressively prosecute, enforce, and defend our patents, trademarks, and proprietary technology, including those licensed
by Mayne Pharma, Knight and Theramex, with our licensees to the extent permitted under their respective license agreements. The loss,
by expiration or otherwise, of any one patent may have a material effect on our business. Defense and enforcement of our intellectual
property rights can be expensive and time consuming, even if the outcome is favorable to us. It is possible that the patents issued or
licensed to us will be successfully challenged, that a court may find that we are infringing on validly issued patents of third parties,
or that we may have to alter or discontinue the development of our products or pay licensing fees to account for patent rights of third
parties. See “– Pharmaceutical Regulation – Regulatory Exclusivity” below for information regarding our intellectual
property and challenges to that intellectual property.
While we
seek broad coverage under our patent applications, there is always a risk that an alteration to the process may provide sufficient basis
for a competitor to avoid infringement claims. In addition, patents expire, and we cannot provide any assurance that any patents will
be issued from our pending application or that any potentially issued patents will adequately protect our intellectual property.
6
Mayne Pharma
licensed US patents and trademarks for our commercial products. Under the terms of the Mayne License Agreement, Mayne Pharma exclusively
took over prosecution of our US patent and trademark portfolio and enforcement of our licensed patents and trademarks.
Government
regulation
In the U.S.,
the FDA regulates pharmaceuticals, biologics, medical devices, dietary supplements, and cosmetics under the Federal Food, Drug, and Cosmetic
Act (“FDCA”) and its implementing regulations. These products are also subject to other federal, state, and local statutes
and regulations, including federal and state consumer protection laws, laws regarding pricing transparency, laws requiring the implementation
of compliance programs, laws requiring the reporting of payments or other transfers of value to HCPs or other healthcare professionals,
laws governing the financial relationships between manufacturers and HCPs or other referral sources and industry stakeholders, laws protecting
the privacy of health-related information, laws restricting items and services of value provided to patients, and laws prohibiting unfair
and deceptive acts and trade practices. See also Item 1A. Risk Factors – “Risks related to our business” for a discussion,
among other things, of the extensive and costly governmental regulation we are subject to.
Pharmaceutical
regulation
The process
required by the FDA before a new drug product may be marketed in the U.S. generally involves the following:
An IND application
is a request for authorization from the FDA to administer an investigational drug product to humans.
Post-Approval
Regulation
Mayne Pharma
is required to comply with several post-approval requirements for our currently approved drug products. We no longer have responsibility
for any post-approval requirements. As the holder of an approved NDA, Mayne Pharma is required to report, among other things, certain
adverse reactions and production problems to the FDA, to provide updated safety and efficacy information, to adhere to product sampling
and distribution requirements, fulfill post-marketing study commitments, and to comply with requirements concerning advertising and promotional
labeling for any of our drug products, which include, among other things, standards for direct-to-consumer advertising, restrictions
that prohibit promoting products for certain uses or in patient populations that are not described in the product’s approved indications
or that are not otherwise consistent with the approved, FDA-required label (known as “off-label use”), limitations on industry-sponsored
scientific and educational activities, and requirements for promotional activities involving the internet. Although physicians may prescribe
legally available products for off-label use if they deem such use to be appropriate in their professional medical judgment, manufacturers
may not market or promote such off-label uses.
7
Also, quality
control and manufacturing procedures must continue to conform to cGMPs to ensure and preserve the long-term stability of the drug product.
cGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of records
and documentation and the obligation to investigate and correct any deviations from cGMP. Manufacturers and other entities involved in
the manufacture and distribution of approved products are, depending on the nature and scope of their activities, subject to FDA and
certain state agency requirements relating to establishing and maintaining product quality. Changes to the manufacturing process are
strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations
also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon us and
any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in
production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.
Our licensees
rely, and expect to continue to rely, on third parties to produce commercial quantities of our licensed drugs. Future FDA and state inspections
may identify compliance issues at the facilities of the manufacturers of our licensed products that may disrupt production or distribution
or require substantial resources to correct. In addition, discovery of previously unknown problems (for example, through adverse events
observed in the post-marketing context, or in Phase 4/post-marketing studies) with a product or the failure to comply with applicable
requirements may result in restrictions on a product, manufacturer, or holder of an approved NDA, including withdrawal or recall of the
product from the market or other voluntary, FDA-initiated or judicial action that could delay or prohibit further marketing. Newly discovered
or developed safety or effectiveness data may require changes to a product’s approved labeling, including the addition of new warnings
and contraindications, and may require the implementation of other risk management measures. Also, new government requirements, including
those resulting from new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory
approval of our products.
Regulatory
exclusivity
There are
two types of NDAs available under Section 505(b) of the FDCA. Section 505(b)(1) of the FDCA provides a marketing approval pathway that
is known as the “traditional” or “full” NDA process. Sponsors use 505(b)(1) applications to obtain marketing
approval of a new drug with active ingredients that have not previously been approved by FDA. The data package necessary for approval
of this new drug requires demonstration of safety and efficacy based on adequate and well controlled human clinical trials conducted
by or for the sponsor, without allowance for reference to third party data. In contrast, Section 505(b)(2) of the FDCA provides an alternative
NDA process for approving a new drug that contains the same active ingredient as a previously approved product but allows sponsors to
rely on clinical trials not conducted by or for the sponsor, as well as other clinical data or literature produced by other parties.
In addition, Section 505(j) of the FDCA provides for a significantly shortened regulatory pathway for approval of a “generic”
version of a new drug, by way of an Abbreviated New Drug Application (“ANDA”). Rather than demonstrating safety and effectiveness as required
for an NDA, the ANDA requires proof that the generic drug is the “same” as or “bioequivalent” to the new drug
under the standard of “bioequivalence,” often using pharmacokinetic, pharmacodynamic, and/or in vitro studies.
A Section
505(b) NDA applicant may be eligible for its own regulatory exclusivity period, such as a five-year or three-year exclusivity. The first
approved Section 505(b) NDA applicant for a drug containing an active ingredient that has not previously been approved in any other 505(b)
NDA (a “new chemical entity,” or NCE), is eligible for a five-year NCE exclusivity period starting on the date of the NDA
approval. An ANDA or 505(b)(2) application for a drug containing the protected active
ingredient of the NCE product generally cannot be submitted to FDA until the end of the five-year exclusivity period, except that such
applications can be submitted at year four if the product is covered by an Orange Book listed patent and the ANDA or 505(b)(2) NDA includes
a Paragraph IV Certification challenging such patent. Additional exclusivities may also apply.
The first
approved Section 505(b) NDA applicant for a particular condition, or a supplemental NDA approval for a change to a marketed product,
such as a new extended-release formulation for a previously approved product, may be eligible for a three-year Hatch-Waxman exclusivity
if one or more new clinical studies, other than bioavailability or bioequivalence studies, was essential to the approval of the application
and was conducted or sponsored by the applicant. Should this occur, the FDA would be precluded from granting final approval to any ANDA
or 505(b)(2) application for the same condition of use or change to the marketed product that was granted exclusivity until after that
three-year exclusivity period has run.
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Additionally,
any ANDA or 505(b)(2) NDA that references the 505(b) product must include one of several types of patent certifications. If the Section
505(b) NDA drug has one or more unexpired patents listed in the Orange Book, an ANDA or 505(b)(2) NDA must include either a “Paragraph
III Certification” or a “Paragraph IV Certification.” A Paragraph III Certification identifies the expiration date
of the listed patent and requires FDA to withhold final approval until that patent has expired. A “Paragraph IV Certification”
states that, in the applicant’s opinion, the relevant patent is invalid, unenforceable, or would not be infringed by the commercial
marketing of the proposed ANDA or 505(b)(2) NDA product. The sponsor of a Paragraph IV ANDA or 505(b)(2) NDA must also provide the holder
of the marketed product NDA, and the owner of the challenged patent, with notification of the Paragraph IV filing along with a detailed
statement of the reasons the applicant believes the patent is invalid, unenforceable, or would not be infringed. If the patent owner
brings an infringement action against the Paragraph IV applicant within 45 days of the notification, a statutory stay is imposed which
prevents FDA from granting final approval of the Paragraph IV application for 30 months from the date of the Paragraph IV Notification.
Generally, no more than one 30-month stay may be applied against any specific Paragraph IV ANDA or 505(b)(2) NDA. A 30-month stay can
be terminated early, and the Paragraph IV application can be immediately approved, if the district court rules in favor of the Paragraph
IV applicant that the patent is invalid, unenforceable, or would not be infringed.
In February 2020, we received a Paragraph IV certification notice letter
(the “IMVEXXY Notice Letter”) regarding an ANDA submitted to FDA by Teva Pharmaceuticals USA, Inc. (“Teva”). See
“Legal Proceedings” in Item 3 of this 2024 10-K Report for additional information.
In March
2020, we received a Paragraph IV certification notice letter (the “BIJUVA Notice Letter”) regarding an ANDA submitted to
FDA by Amneal Pharmaceuticals (“Amneal”). In April 2020, we filed a complaint for patent infringement against Amneal in the
U.S. District Court for the District of New Jersey arising from Amneal’s ANDA filing with FDA. In December 2021, we entered into
a settlement agreement (the “Settlement Agreement”) with Amneal Pharmaceuticals, Inc., Amneal Pharmaceuticals, LLC and Amneal
Pharmaceuticals of New York LLC (collectively “Amneal”) to resolve the litigation over our patents listed in FDA’s
Orange Book that claim compositions and methods of BIJUVA (the “BIJUVA Patents”). Under the terms of the Settlement Agreement,
the Company granted Amneal a non-exclusive, non-transferable, royalty-free license to commercialize Amneal’s generic formulation
of BIJUVA in the U.S. commencing in May 2032 (180 days before the current expiration date in November 2032 for the last to expire of
our BIJUVA Patents), or earlier under certain circumstances customary for settlement agreements of this nature.
Other
U.S. healthcare laws and compliance requirements
Certain federal
and state healthcare laws and regulations pertaining to fraud and abuse and patients’ rights, among other topics, are and will
be applicable to our business. Our licensees and the licensed products are subject to regulation by both the federal government and the
states in which we or our partners conduct our business. The healthcare laws and regulations that may affect our licensees’ ability
to operate and our ability to receive licensing revenues include:
9
Pharmaceutical
company interactions with HCPs, patient advocacy groups, and patients, including with respect to product and patient assistance programs
and other education and support initiatives, have been and continue to be, the subject of regulatory scrutiny for compliance with fraud
and abuse laws.
Because of
the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of the
business activities of the entities with whom we do business could be subject to challenge under one or more of such laws. Efforts to
ensure that our business arrangements with third parties comply with applicable healthcare laws and regulations could be costly. If our
past operations, including activities conducted by our sales team or agents, are found to be in violation of any of these laws or any
other governmental regulations that may apply to us, we may be subject to significant civil, criminal, and administrative penalties,
damages, fines, exclusion from third-party payer programs, such as Medicare and Medicaid, and the curtailment or restructuring of our
operations. If any of the HCPs, providers, or entities with whom we do business are found to not be in compliance with applicable laws,
they may be subject to criminal, civil, or administrative sanctions, including exclusion from government funded healthcare programs.
10
Many aspects
of these laws have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a
variety of subjective interpretations that increases the risk of potential violations. In addition, these laws and their interpretations
are subject to change. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to
incur significant legal expenses, divert our management’s attention from the operation of our business, and damage our reputation.
In addition
to the fraud and abuse laws, we continue to monitor the potential impact of proposals to change prescription drug costs at the federal
and state level. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control
pharmaceutical pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing
cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
We are unable to predict the future course of federal or state healthcare legislation in the U.S. directed at broadening the availability
of healthcare and containing or lowering the cost of healthcare.
In addition,
from time to time in the future, our licensees and the licensed products may become subject to additional laws or regulations administered
by the FDA, the FTC, U.S. Department of Health and Human Services (“HHS”), or by other federal, state, local, or foreign
regulatory authorities, or the repeal of laws or regulations that we generally consider favorable, such as DSHEA, or to more stringent
interpretations of current laws or regulations. We are not able to predict the nature of such future laws, regulations, repeals, or interpretations,
and we cannot predict what effect additional governmental regulation, if and when it occurs, would have on our business in the future.
Such developments could, however, require reformulation of certain products to meet new standards, recalls or discontinuance of certain
products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of certain products,
additional or different labeling, additional scientific substantiation, additional personnel, or other new requirements. Any such developments
could have a material adverse effect on our business.
Available
information
We are a
Nevada corporation, and we maintain our principal executive offices at 951 Yamato Road, Suite 220, Boca Raton, Florida 33431. Our telephone
number is (561) 961-1900. We maintain a corporate website at www.therapeuticsmd.com. The information contained on our website or that
can be accessed through our website is not incorporated by reference into this 2024 10-K Report or in any other report or document we
file with the SEC.
Item
1A. Risk factors
Investing
in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with all of the
information included in this 2024 10-K Report and our other filings with the SEC, before you decide to purchase shares of our common
stock. We believe the risks and uncertainties described below are the most significant we face. Additional risks and uncertainties of
which we are unaware, or that we currently deem immaterial, also may become important factors that affect us. If any of the following
risks occur, our business, financial condition, or results of operations could be materially and adversely affected. In that case, the
trading price of our common stock could decline, and you may lose all or part of your investment.
Our
business is subject to a number of risks and uncertainties. The following is a summary of the principal risk factors described in this
section:
● There is substantial doubt about our ability to continue as a going concern.
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● We could be affected by transitions in our senior management team.
● Our products and our licensees are subject to extensive government regulation.
● Our success is tied to the distribution channels of our licensees.
12
Risks
related to our business
We
currently derive all revenue from royalties related to sales of our licensed women’s healthcare products, and the failure of our
licensees to maintain or increase sales of these products could have an adverse effect on our business, financial condition, results
of operations, and growth prospects.
Following
the Mayne Transaction, we derive all revenue from royalties related to sales of our women’s healthcare products, including patient-controlled,
long-acting contraceptive, hormone therapy pharmaceutical products, prenatal and women’s multi-vitamins, and iron supplements.
We cannot assure you that our licensees will be able to sustain such sales or that such sales will grow. In addition to other risks described
herein, the ability of our licensees to maintain or increase existing product sales is subject to several risks and uncertainties, including
the following:
● changed or increased regulatory restrictions or regulatory actions by the FDA;
● acceptance of our products as safe and effective by physicians and patients.
If
revenue from royalties related to sales of our products does not increase, we may be required to seek to raise additional funds, which
could have an adverse effect on our business, financial condition, results of operations, and growth prospects. In addition, our revenue
from royalties is based on information compiled by, and received from, our licensees. If the sales information provided by our licensees
is erroneous, it could have an adverse effect on our business, financial condition and results of operations.
We
have incurred net losses in the past and there are no assurances we will be able to maintain or increase profitability in the future.
In the past, we have incurred recurring net losses, including net losses
of $2.2 million and $10.3 million for 2024 and 2023, respectively. In 2022, we recognized net income of $112.0 million due to the net
proceeds from the Mayne Transaction and divestiture of our former subsidiary vitaCare Prescription Services, Inc. (“vitaCare”)
exceeding our costs and expenses. We utilized most of the net proceeds to repay borrowings and redeem our preferred stock. As of December
31, 2024, our stockholders’ equity was $27.4 million. We have funded our operations to date primarily through revenue from licensed
royalties, public offerings of our common stock and private placements of equity and debt securities and the transactions with Mayne Pharma.
We may incur substantial additional losses over the next few years because of costs associated with the wind down of our historical business
as well as the ongoing costs of being a public company. As a result, we may not maintain or increase profitability. If we continue to
incur substantial losses, because the royalties of our products are insufficient or otherwise, and are unable to secure additional financing,
we could be forced to discontinue or curtail our business operations, merge, consolidate, or combine with a company with greater financial
resources in a transaction that might be unfavorable to us.
There is substantial doubt about our ability to continue as a
going concern.