TherapeuticsMD Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
TXMD$1.74+1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-12.
0001213900-24-067771
Item 2. Management’s discussion and analysis of financial condition and results of operationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001213900-24-096811
Item 2. Management’s discussion and analysis of financial condition and results of operationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 93 current paragraphs.
63 unchanged; 27 reworded; 3 added; 0 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Other income (expense), net. During the third quarter of 2024, we had other income of $292 thousand compared to other income of $339 thousand in the third quarter of 2023. Other income in the 2024 period was mainly comprised of interest income, while other income in the prior year period was mainly comprised of royalties.
Current report
Managed Client Agreement with IWG
Current report
On September 30, 2024 (the “Commencement Date”), we entered into a Managed Client Agreement (the “Managed Client Agreement”) with RGN-MCA Florida VI, LLC (“IWG”) pursuant to which IWG agreed to provide managed services for flexible workspaces under the “HQ” brand for 21,330 square feet of our office spaces located at 951 Yamato Road, Boca Raton, Florida 33431 (the “Premises”). The Managed Client Agreement is subject to termination by us or IWG if either party does not approve the specification, plans and drawings for the fit out of the Premises on or before the date that is 120 days after the Commencement Date.
Reworded paragraphs (27)
Previous wording
The Company’s estimate of the allowance for payer rebates and wholesale distributor fees was determined in accordance with the Transaction Agreement which establishes the process for the determination of net working capital. In February 2024, the Company received Mayne Pharma’s calculation of allowance for payer rebates and wholesale distributor fees which differed significantly from the Company’s estimate of the allowances. The Company and Mayne Pharma intend to resolve this matter through the dispute resolution process outlined in the Transaction Agreement.
Current wording
The Company’s estimate of the allowance for payer rebates and wholesale distributor fees was determined in accordance with the Transaction Agreement which establishes the process for the determination of net working capital. In February 2024, the Company received Mayne Pharma’s calculation of allowance for payer rebates and wholesale distributor fees which differed significantly from the Company’s estimate of the allowances. The Company intends to resolve this matter through the dispute resolution process outlined in the Transaction Agreement.
Previous wording
As of June 30, 2024, the Company believes no additional accrual is 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.
Current wording
In addition, the Company has received information from Mayne Pharma pertaining to the allowance for returns that differs from the Company’s estimate of the allowance. As of September 30, 2024, the Company believes no additional accrual is required for amounts that may be owed for the allowance for returns under the Transaction Agreement, as the Company cannot reasonably estimate a range of loss. 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.
Previous wording
We recorded $234 thousand in license revenue for the second quarter of 2024, primarily from the Mayne License Agreement, a decrease of $203 thousand, or 46.5%, compared to $437 thousand in license revenue for the second quarter of 2023. The decrease is primarily attributable to changes in sales of licensed products.
Current wording
We recorded $547 thousand in license revenue for the third quarter of 2024, primarily from the Mayne License Agreement, an increase of $600 thousand, compared to $(53) thousand in license revenue for the third quarter of 2023. The increase is primarily attributable to changes in sales of licensed products. Reported negative license revenue of ($53) thousand in the third quarter of 2023 was due to product sales adjustments reported by our licensees.
Previous wording
Operating expenses. Total operating expenses for the second quarter of 2024 were $2,674 thousand, a decrease of $235 thousand, or 8.1%, compared to the second quarter of 2023. This decrease was due to the further optimization of our business through the reduction of costs following our transition to a royalty-based business, and is partially off-set by the patent impairment recognized in the second quarter of 2024.
Current wording
Operating expenses. Total operating expenses for the third quarter of 2024 were $1,406 thousand, a decrease of $314 thousand, or 18.3%, compared to the third quarter of 2023. This decrease was due to the further optimization of our business through the reduction of costs following our transition to a royalty-based business.
Previous wording
*Selling, general and administrative.*Selling, general and administrative expenses were $1,233 thousand for the second quarter of 2024, a decrease of $1,548 thousand, or 55.7%, compared to the second quarter of 2023. This decrease was due to the increased efficiencies realized following our transition to a royalty-based business.
Current wording
*Selling, general and administrative.*Selling, general and administrative expenses were $1,310 thousand for the third quarter of 2024, a decrease of $280 thousand, or 17.6%, compared to the third quarter of 2023. This decrease was due to the increased efficiencies realized following our transition to a royalty-based business.
Previous wording
*Depreciation & amortization.*Depreciation and amortization expense was $180 thousand for the second quarter of 2024, an increase of $52 thousand, or 40.6%, compared to the second quarter of 2023. In the 2024 period, this balance is entirely comprised of amortization of license rights and intangible assets.
Current wording
*Depreciation & amortization.*Depreciation and amortization expense was $96 thousand for the third quarter of 2024, a decrease of $34 thousand, or 26.2%, compared to the third quarter of 2023. In the 2024 period, this balance is entirely comprised of amortization of license rights and intangible assets.
Previous wording
Loss from operations. In the second quarter of 2024, we had a loss from operations of $2,440 thousand, as compared to a loss from operations of $2,472 thousand for the second quarter of 2023. This change reflects the streamlining of our business and increased efficiencies realized as a royalty-based business.
Current wording
Loss from operations. In the third quarter of 2024, we had a loss from operations of $859 thousand, as compared to a loss from operations of $1,773 thousand for the third quarter of 2023. This change reflects the streamlining of our business and increased efficiencies realized as a royalty-based business.
Previous wording
Provision for income taxes. During the second quarter of 2024 and 2023, we recorded no provision for income taxes for continuing operations.
Current wording
Provision for income taxes. During the third quarter of 2024 and 2023, we recorded no provision for income taxes for continuing operations.
Previous wording
Net loss from continuing operations. For the second quarter of 2024, we had a net loss of $1,050 thousand, or $0.09 per basic and diluted common share, compared to a net loss of $2,414 thousand, or $0.24 per basic and diluted common share, for the second quarter of 2023.
Current wording
Net loss from continuing operations. For the third quarter of 2024, we hada net loss of $567 thousand, or $0.05 per basic and diluted common share, compared to a net loss of $1,434 thousand, or $0.13 per basic and diluted common share, for the third quarter of 2023.
Previous wording
Discontinued Operations – Net loss from discontinued operations was $40 thousand for the second quarter of 2024, compared to a net loss from discontinued operations of $0 thousand for the second quarter of 2023.
Current wording
Discontinued Operations – Net loss from discontinued operations was $42 thousand for the third quarter of 2024, compared to a net loss from discontinued operations of $1,944 thousand for the third quarter of 2023.
Previous wording
Six months ended June 30, 2024 compared with six months ended June 30, 2023
Current wording
Nine months ended September 30, 2024 compared with nine months ended September 30, 2023
Previous wording
We recorded $547 thousand in license revenue for the first six months of 2024, primarily from the Mayne License Agreement, a decrease of $306 thousand, or 35.9%, compared to $853 thousand in license revenue for the first six months of 2023. The decrease is primarily attributable to changes in sales of licensed products.
Current wording
We recorded$1,094 thousandin license revenue for the first nine months of 2024, primarily from the Mayne License Agreement, an increase of$294 thousand, or 36.8%, comparedto $800 thousand in license revenue for the first nine months of 2023. The increase is primarily attributable to changes in sales of licensed products.
Previous wording
Operating expenses. Total operating expenses for the first six months of 2024 were $4,129 thousand, a decrease of $1,863 thousand, or 31.1%, compared to the first six months of 2023. This decrease was due to the further optimization of our business through the reduction of costs following our transition to a royalty-based business , and is partially off-set by the patent impairment recognized in the second quarter of 2024.
Current wording
Operating expenses. Total operating expenses for the first nine months of 2024 were $5,535 thousand, a decrease of $2,177 thousand, or 28.2 %, compared to the first nine months of 2023. This decrease was due to the further optimization of our business through the reduction of costs following our transition to a royalty-based business and is partially off-set by the patent impairment recognized in the second quarter of 2024.
Previous wording
*Selling, general and administrative.*Selling, general and administrative expenses were $2,555 thousand for the first six months of 2024, a decrease of $3,282 thousand, or 56.2%, compared to the first six months of 2023. This decrease was due to the increased efficiencies realized following our transition to a royalty-based business.
Current wording
*Selling, general and administrative.*Selling, general and administrative expenses were $3,865 thousand for the first nine months of 2024, a decrease of $3,562 thousand, or 48.0%, compared to the first nine months of 2023. This decrease was due to the increased efficiencies realized following our transition to a royalty-based business.
Previous wording
*Depreciation & amortization.*Depreciation and amortization expense was $313 thousand for the first six months of 2024, an increase of $158 thousand, or 101.9%, compared to the first six months of 2023. In the 2024 period, this balance is entirely comprised of amortization of license rights and intangible assets.
Current wording
*Depreciation & amortization.*Depreciation and amortization expense was $409 thousand for the first nine months of 2024, an increase of $124 thousand, or 43.5%, compared to the first nine months of 2023. In the 2024 period, this balance is entirely comprised of amortization of license rights and intangible assets.
Previous wording
Loss from operations. In the first six months of 2024, we had a loss from operations of $3,582 thousand, as compared to a loss from operations of $5,139 thousand for the first six months of 2023. This change reflects the streamlining of our business and increased efficiencies realized as a royalty-based business.
Current wording
Loss from operations. In the first nine months of 2024, we had a loss from operations of $4,441 thousand, as compared to a loss from operations of $6,912 thousand for the first nine months of 2023. This change reflects the streamlining of our business and increased efficiencies realized as a royalty-based business.
Previous wording
Other income, net. During the first six months of 2024, we had other income of $1,723 thousand compared to other income of $415 thousand in the first six months of 2023. The difference is mainly due to a $1,250 thousand one-time consideration the Company received from its sublessee on its early termination on the sublease, which was recognized in the second quarter of 2024. Royalties reported as other income for intellectual property licensed by us totaled approximately $404 thousand in the first six months of 2024.
Current wording
Other income, net. During the first nine months of 2024, we had other income of $2,015 thousand compared to other income of $754 thousand in the first nine months of 2023. The difference is mainly due to a $1,250 thousand one-time payment the Company received from its sublessee on its early termination on the sublease, which was recognized in the second quarter of 2024. Royalties reported as other income for intellectual property licensed by us totaled approximately $660 thousand in the first nine months of 2024.
Previous wording
Provision for income taxes. During the first six months of 2024 and 2023, we recorded no provision for income taxes for continuing operations.
Current wording
Provision for income taxes. During the first nine months of 2024 and 2023, we recorded no provision for income taxes for continuing operations.
Previous wording
Net loss from continuing operations. For the first six months of 2024, we had a net loss of $1,859 thousand, or $0.16 per basic and diluted common share, compared to a net loss of $4,724 thousand, or $0.47 per basic and diluted common share, for the first six months of 2023.
Current wording
Net loss from continuing operations. For the first nine months of 2024, we had a net loss of$2,426 thousand, or$0.21 perbasic and diluted common share, compared to a net loss of $6,158 thousand, or $0.60 per basic and diluted common share, for the first nine months of 2023.
Previous wording
Discontinued Operations - Net income from discontinued operations was $35 thousand for the first six months of 2024, compared to a net loss from discontinued operations of $1,293 thousand for the first six months of 2023. This change reflects the continued wind-down of our legacy business.
Current wording
Discontinued Operations - Net loss from discontinued operations was $7 thousand for the first nine months of 2024, compared to a net loss from discontinued operations of $3,237 thousand for the first nine months of 2023. This change reflects the continued wind-down of our legacy business.
Previous wording
Our primary use of cash is to fund our continued operations. We have funded our operations primarily through public offerings of our common stock and private placements of equity and debt securities, the divestiture of our former subsidiary vitaCare, and the transactions with Mayne Pharma. As of June 30, 2024, we had cash and cash equivalents totaling $5,232 thousand. We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation insured limits of $250 thousand per bank. We have never experienced any losses related to these funds.
Current wording
Our primary use of cash is to fund our continued operations. We have funded our operations primarily through public offerings of our common stock and private placements of equity and debt securities, the divestiture of our former subsidiary vitaCare, and the transactions with Mayne Pharma. As of September 30, 2024, we had cash and cash equivalents totaling $5,047 thousand. We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation insured limits of $250 thousand per bank. We have never experienced any losses related to these funds.
Previous wording
Pursuant to 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 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 minimal 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. 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.
Current wording
Pursuant to 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 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. 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.
Previous wording
See “Going Concern” above for further discussion related to our ability to generate and obtain adequate amounts of cash to meet our liquidity needs and our plans for to satisfy our such needs in the short-term and in the long-term. As a result, there is substantial doubt about our ability to continue as a going concern for the next twelve months from the issuance of these financial statements.
Current wording
See “Going Concern” above for further discussion related to our ability to generate and obtain adequate amounts of cash to meet our liquidity needs and our plans to satisfy our such needs in the short-term and in the long-term. As a result, there is substantial doubt about our ability to continue as a going concern for the next twelve months from the issuance of these financial statements.
Previous wording
Operating Activities from continuing operations. For the first six months of 2024, net cash provided by operating activities was $1,224 thousand, compared to net cash used in operating activities of $12,093 thousand for the first six months of 2023. This change of $13,317 thousand or 110.1%, was primarily due to a $2,865 thousand decrease in our net loss from continuing operations following our transition from a manufacturing and commercialization business to a royalty-based business combined with the pay-down of current liabilities in the prior-year period.
Current wording
Operating Activities from continuing operations. For the first nine months of 2024, net cash provided by operating activities was $1,153 thousand, compared to net cash used in operating activities of $18,121 thousand for the first nine months of 2023. This change of $19,274 thousand was primarily due to a $3,732 thousand decrease in our net loss from continuing operations following our transition from a manufacturing and commercialization business to a royalty-based business combined with the pay-down of current liabilities in the prior-year period.
Previous wording
*Financing Activities from continuing operations.*For the first six months of 2024, there was no cash received from financing activities, compared to net cash received from financing activities of $1,150 thousand for the first six months of 2023, reflecting the sale of common stock during the first six months of 2023.
Current wording
*Financing Activities from continuing operations.*For the first nine months of 2024, there was no cash received from financing activities, compared to net cash received from financing activities of $1,149 thousand for the first nine months of 2023, reflecting the sale of common stock during the first nine months of 2023.
Previous wording
Net cash used in discontinued operations. Net cash used in operating activities from discontinued operations for the first six months of 2024 was $319 thousand as compared to net cash used in operating activities of $24,645 thousand for the first six months of 2023. This change relates primarily to a decrease in expenses incurred and the payment of current liabilities associated with our transition from a manufacturing and commercialization business to a royalty-based business.
Current wording
Net cash used in discontinued operations. Net cash used in operating activities from discontinued operations for the first nine months of 2024 was $433 thousand as compared to net cash used in operating activities of $22,179 thousand for the first nine months of 2023. This change relates primarily to a decrease in expenses incurred and the payment of current liabilities associated with our transition from a manufacturing and commercialization business to a royalty-based business.
Previous wording
Receivable from Mayne. On December 30, 2022, Mayne Pharma acquired our accounts receivable balance of approximately $29.3 million which is subject to certain working capital adjustments. As of June 30, 2024, we had a royalty receivable of $2,778 thousand relating to the short-term portion of receivable from Mayne Pharma and $17,224 thousand relating to the long-term portion of royalty receivable which includes royalties recognized from the Minimum Annual Royalty. See Note 1 Business, basis of presentation, new accounting standards and summary of significant accounting policies (Revenue Recognition) to the consolidated financial statements included in our 2023 10-K Report.* *
Current wording
Receivable from Mayne. On December 30, 2022, Mayne Pharma acquired our accounts receivable balance of approximately $29.3 million which is subject to certain working capital adjustments. As of September 30, 2024, we had a royalty receivable of$3,160 thousand relating to the short-term portion of receivable from Mayne Pharma and$16,610 thousand relating to the long-term portion of royalty receivable which includes royalties recognized from the Minimum Annual Royalty. See Note 1 Business, basis of presentation, new accounting standards and summary of significant accounting policies (Revenue Recognition) to the consolidated financial statements included in our 2023 10-K Report.* *
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Other income (expense), net. During the second quarter of 2024, we had other income of $1,390 thousand compared to other income of $58 thousand in the second quarter of 2023. The difference is mainly due to a $1,250 thousand one-time consideration the Company received from its sublessee on its early termination on the sublease, which was recognized in the second quarter of 2024. Royalties reported as other income for intellectual property licensed by us totaled approximately $108 thousand in the second quarter of 2024.