Evofem slashes expenses, sees Phexxi sales growth in 2023

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Evofem slashes expenses, sees Phexxi sales growth in 2023

SAN DIEGO - Evofem Biosciences Inc. (OTCQB: OTC: EVFM ), a company specializing in women's sexual and reproductive health, reported a significant increase in net sales for its contraceptive product, Phexxi, in the year ended December 31, 2023. The company achieved $18.2 million in net product sales, a notable rise from the previous year's $16.8 million, despite a reduction in its field force and a lack of growth capital.

The sales growth is attributed to improved reimbursement rates and a price increase for Phexxi that took effect on October 1, 2022. Moreover, the company's operating expenses saw a sharp decline of 64% from 2022 levels, totaling $36.1 million. This reduction was a result of a strategic decrease in selling and marketing costs by 73%, and a significant cut in research and development expenses by 88% after the suspension of clinical activities in the fourth quarter of 2022.

For the fourth quarter of 2023, Evofem reported net product sales of $4.8 million, a substantial increase from $0.2 million in the corresponding period of the prior year. The company also improved its loss from operations, posting a $3.4 million loss compared to a $12.1 million loss in the fourth quarter of 2022.

The company's sales and marketing expenses as a percentage of net sales were 54% for the fourth quarter, marking the most favorable ratio since the launch of Phexxi in 2020. Additionally, the company announced a definitive agreement to be acquired by Aditxt, Inc. ( Nasdaq : ADTX), with the aim of accelerating Evofem's growth as a subsidiary and expanding into a multi-product women's health franchise. The transaction is expected to close in the second half of 2024.

Evofem's liquidity situation showed that as of December 31, 2023, the company had $0.6 million in restricted cash, compared to the previous year's $2.8 million in unrestricted cash and $1.2 million in restricted cash. The company made payments totaling $1.2 million to a U.S.-based healthcare-focused institutional investor as part of an agreement related to the purchase of convertible senior secured promissory notes in 2020.

This article is based on a press release statement.

InvestingPro Insights

In the wake of Evofem Biosciences Inc.'s (OTCQB: EVFM) recent financial results, a closer look at real-time data from InvestingPro paints a more nuanced picture of the company's financial health. Despite the reported increase in net product sales for its contraceptive product Phexxi, InvestingPro data indicates a market capitalization of just $0.85 million, reflecting the company's relatively small size within the industry.

Moreover, the company's revenue has seen a decline of nearly 33% over the last twelve months as of Q1 2023, a metric that underscores the challenges Evofem faces in generating consistent sales growth. This is further highlighted by a gross profit margin of 56.18%, which, while robust, may not be sustainable given the company's significant operating loss margin of -195.57% in the same period.

Adding to these concerns are two critical InvestingPro Tips. Firstly, Evofem operates with a significant debt burden, which could further strain its financial resources. Secondly, the company is quickly burning through cash, a situation that could impact its ability to sustain operations without additional financing or a successful strategic pivot.

For readers interested in a deeper dive into Evofem's financials and future prospects, InvestingPro offers additional insights. There are 14 more InvestingPro Tips available that can provide a more comprehensive understanding of the company's performance and trajectory. To access these insights, visit https://www.investing.com/pro/EVFM and use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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