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TherapeuticsMD Inc (TXMD) Q1 2019 Earnings Call Transcript

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TherapeuticsMD Inc  (NASDAQ: TXMD)
Q1 2019 Earnings Call
May. 06, 2019, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen. Thank you for joining us for the TherapeuticsMD First Quarter 2019 Financial Results Conference Call. Following prepared remarks from the Company, we will open the call for questions.

I would now like to turn the conference call over to Therapeutics, Vice President of Investor Relations, Nichol Ochsner.

Nichol Ochsner -- Vice President of Investor Relations

Good afternoon everyone. Thank you for joining today's call to discuss our first quarter financial results and business update. This afternoon TherapeuticsMD issued a press release announcing our first quarter financial results. The press release is available on the Company's website therapeuticsmd.com, in the investors and media section.

On today's call from TherapeuticsMD, our Chief Executive Officer, Robert Finizio; Chief Financial Officer, Daniel Cartwright and Chief Commercial Officer, Dawn Halkuff. I would like to remind everyone that certain statements made during this conference call may be forward looking statements. Such forward looking statements are based upon current expectations and there can be no assurance that results contemplated in these statements will be realized.

Actual results may differ materially from such statements due to a number of factors and risks, some of which are identified in our press release or annual, quarterly and other reports filed with the SEC. These forward looking statements are based on information available to TherapeuticsMD today and the Company assumes no obligation to update statements and circumstances change.

An audio recording and webcast replay for today's conference call will also be made available in the investors and media section of the Company's website for the benefit of those who may be listening to the replay or archived webcast this call was held and recorded May 6, 2019.

With that I'll turn the call over to TherapeuticsMD's, CEO, Rob Finizio.

Robert G. Finizio -- Chief Executive Officer, Co-Founder, and Director

Thanks Nicole. Good afternoon everyone, and thanks for joining today's call. Let's discuss the model we've chosen for long term success on Slide 3. Our strategy for the launch of IMVEXXY was to provide an open access market with our $35 copay card for patients, before commercial insurance coverage was established.

We did this because of our belief that IMVEXXY is a product that provides a highly differentiated treatment experience that we can -- for providers and women to IMVEXXY from legacy products. Let me show you the data on the next two slides that demonstrates our strategy is working and that we believe will conclude with IMVEXXY being the market leader for VVA products.

Turning to Slide 4. You can see that our approach has jump-started our volume and our units continue to grow as insurance coverage is building, IMVEXXY continues to trend with Vagifem. We expect this momentum to continue with the expansion of our sales force whose predominant focus will be on IMVEXXY while we're building insurance coverage for BIJUVA.

In March, we achieved 6% market share in just 10 months and believe our model is working. Now, let's turn to refills on Slide 5.

In just the first 10 months, we are already seeing an average of over three fills per patient. This is above our initial expectations and above the average in the VVA category. We believe it is clear from the data that women like IMVEXXY.

This also puts us on a path to driving market expansion through treatment adherence. I discussed the value of fills per patient later in the presentation. Let's turn to our results from IMVEXXY on Slide 6.

In addition to volume and refills, we're increasing net revenue from IMVEXXY quarter-over-quarter. Everything is trending in the right direction with net revenue increasing at a faster rate than units due to payer coverage starting to take hold. We believe this trend will continue as more payers begin adjudicating. In the third quarter of '19, we expect to have approximately 70% commercial payer cover contracted.

And in Q4 of '19, we anticipate the majority of Medicare Part D to be contracted. We believe this rise in coverage will be the major factor to us being able to achieve our normalized net revenue goal of $108 per unit in the third quarter of 2020, which is heavily weighted to our maintenance pack.

As this insurance contracting completes this year, we expect the majority of the gap from where we are today to the target goal of 108 net revenue per unit will be closed this year. A question that we have received is why our adjudication rates do not match our coverage lives. To answer this question, let's review how this all comes together. Please turn to Slide 7.

What we're showing here on line one, is a patient mix by payer type for the VVA category. For the VVA market, Medicare Part D is typically 25%. Commercial is typically approximately 66% and cash pay is typically approximately 9%. If you move to line two, it shows in fact these patient mix by payer type.

What you can see here is that our patient mix is overweighted toward Medicare Part D which is currently an area of our lowest coverage and utilization of insurance when filling a prescription. Now, let's look at Slide 8 for adjudication rates by payer type.

As you can see IMVEXXY -- for IMVEXXY, we have approximately 5% adjudication rate for Medicare Part D for the first quarter. For commercial plans, we had approximately a 41% adjudication rate. Together this gave us an overall blended adjudication rate of 27%, which is 5% of above what we expected and what we stated on our Q4 call .That transitions us nicely to Slide 9.

We are consistently seeing an improvement in adjudication rates. In just April, as the impact of copay card resets and high deductible plans lessened the overall adjudication rate increased to 32%. Let's bring it all together on Slide 10. Our gross to nets per unit will be primarily driven by increases in payer coverage across commercial and Medicare. So we expect the majority of that GAAP from where we are today to the target of $108 net revenue per unit will be closed this year. As we look forward to 2020, with all three of our products being launched. We anticipate that distribution costs will be significantly reduced. Likewise, in the first half of '20, we expect to identify and optimize IMVEXXY's copay card program.

We believe all this together will result in a normalization of $100 net revenue per unit in Q3 of '20. Turning to Slide 11, so why did we choose this model and what does this data suggest. With a very conservative assumption and we are assuming we only achieved 25%to 30% market share and assuming if you only -- if you take no price increases and if you have no new patients enter the VVA marketplace with only three fills per patient, which we have already achieved, we could add approximately a $225 million net business. The added value of each additional potential fill. Results in an additional $74 million of net revenue for IMVEXXY.

Now, let me turn the call over to Dawn Halkuff our Chief Commercial Officer to review our levers for growth.

Dawn Halkuff -- Chief Commercial Officer

Thank you, Rob. Let's turn to Slide 12. To achieve or exceed the potential that Rob just reviewed we are continuing to put pressure on each of the levers that we believe will help us achieve overall success and market leadership.

In the first quarter, we added about 50 sales representatives to expand our reach to an additional 5,000 prescribers which will support our growth in market share. In addition, we've launched BIOIGNITE with IMVEXXY and we plan to start our DTC campaign in the second half of the year to attract new menopausal women into the VVA space.

Let's move to Slide 13. Before we move on to BIJUVA, I want to spend a minute on what we are seeing with BIOIGNITE. As a reminder, BIOIGNITE is our program to partner with compounders to create a presents in VVA and to access to 12 million to 18 million annual compounded prescriptions in the E+P market. We have launched the model with IMVEXXY and now have 33 accounts live, 15 vetted accounts waiting for the first order and 153 in the vetting and processing stage. Importantly early indicator show that we are gaining steady volume from these initial accounts hearing that the patients who are now on IMVEXXY are happy with the new product choice and on covering high volume prescribers that we would not have otherwise targeted.

These types of prescribers do not show up in the IMS or Symphony data, as the products they are prescribing are compounded and not FDA approved.

Additionally, we are seeing strong refill rates and BIOIGNITE, that match what we are seeing in our other channels. These early indicators with IMVEXXY provide us confidence that we are on the right track for the BIJUVA launch.

Let's move on to BIJUVA on Slide 15. We announced the commercial availability of BIJUVA on April 17th. We believe BIJUVA fills an unmet need for menopausal women and prescribers. Phase one of our launch will focus on the traditional prescribers who prior to BIJUVA have prescribed the off label to product regimen of separate estradiol and separate progesterone products despite these not being approved to be used together and with two separate copays.

Since there is little to no promotion in the FDA approved hot flash category, TherapeuticsMD with BIJUVA will be one of the only voices presenting an opportunity to reshape this category and reinvigorate this therapeutic area.

We plan to launch BIJUVA into the BIOIGNITE network once payor coverage has been established which is expected in the fourth quarter of 2019.

Turning to Slide 16. BIJUVA will follow a similar commercialization path to IMVEXXY that starts with prescriber education while building payer coverage. Our 200 person sales force will be full focused predominantly on IMVEXXY, while BIJUVA payer coverage is building.

The overlap of prescribers from IMVEXXY and BIJUVA provides a portfolio advantage. BIJUVA also gives us an opportunity to connect with menopausal women early in the treatment paradigm that may allow for the transition from BIJUVA to IMVEXXY based on their symptoms.

Our sales force is promoting with a powerful prescribers marketing campaign as shown on the right hand side of the slide. The campaign focuses on the science of BIJUVA that led to the FDA approval of the first and only FDA approved bio identical combination of E+P.

Let's move to Slide 17. Our strategy for BIJUVA is simple. Just like IMVEXXY, it is focused on prescriber education and launched with an early experience program called Keep cool. We have the same $35 copay program, so prescribers and patients can access the product as insurance coverage builds as we build prescriber, patient and payer uptake we will then move into the next phases of launch similar to what we did for IMVEXXY.

Now, moving on to ANNOVERA, please turn to Slide 19, we view ANNOVERA as a potential game changer in the contraceptive market which is the largest FDA approved market in women's healthcare at $5 billion.

We conducted a recent market research survey to a panel of 200 physicians comprising over -- and primary care providers, that showed near universal acceptance to prescribe ANNOVERA. As a woman, let me explain to you why this product is so exciting to me.

To receive a long acting products like an IUD a woman has to make a long term commitment of five to seven years regarding her fertility and then have a procedure to have it inserted and then another procedure if she wants to have it removed.

With ANNOVERA for the first time women can choose to have a long term product and also choose to change her mind without the need to have an invasive procedure that is game changing. Moving to launch, in the third quarter, we plan to do a soft launch to meet incoming demand. We expect to be manufacturing at scale in the fourth quarter of this year with the full launch in the first quarter of 2020. The initial focus will be on the OBGYN target overlap with our menopause products.

Now, let me explain how the payor market for contraceptives is different than the HRT market. Under the Affordable Care Act or ACA, Insurance companies must cover at least one contraceptive product in each of the FDA's 18 categories of birth control with no copay.

We believe ANNOVERA will become the 19th method of contraception. That decision process will start when we launch and be determined by the FDA.

Turn now to Slide 20. Now that you understand the ACA national laws. Here's what you may not be aware of the state law. Certain states require immediate coverage regardless of the ACA mandate. Approximately 8 to 10 states comprising 42 million women mandate coverage with no copay regardless of the ACA decision. This is meaningful because the although they will likely do a clinical review, it may shorten our time to coverage.

Let's move to Slide 21. Slide 21, shows an additional nine states that require coverage, but could require a copay. We believe these state mandates assure in the timeline to pay our coverage and net revenue stabilization per unit. I would like to remind you once again, that contraceptives represent the largest FDA approved market in women's healthcare. We anticipate the whack price will be $1,800 to $2,000 per unit, aligned with our responsible pricing strategy and price lower than NuvaRing on an annual basis.

Now, I would like to turn the call over to our CFO, Dan Cartwright, to review the financials.

Dan Cartwright -- Chief Financial Officer

Thanks Dawn. First quarter 2019 financial results are included in the press release issued today. Let me summarize a few key points.

Please turn to Slide 23. For the first quarter, approximately 75,000 units of IMVEXXY were dispensed by pharmacist and paid for by patients. Compared with approximately 47,500 units in the fourth quarter. The average WAC sales price was approximately $202 for the first quarter. The difference between WAC and net revenue is mostly driven by the cost of our copay assistance program as discussed earlier. Which we expect to continue to lessen as payer coverage increases.

As such, in line with our expectations, net revenue for IMVEXXY was approximately $2 million for the quarter. Which is an increase of approximately 122% over the fourth quarter. We expect net revenue to increase substantially over the next few quarters. We continue to contract with insurance companies to reimburse for IMVEXXY.

At March 31, 2019, we had contracted with 7 of the 10 largest commercial payers in the VVA market. Our goal is to continue the contracting process with the remaining payers in the commercial space. Once completed, we believe our IMVEXXY scripts will translate into higher revenue as more insurance companies begin to pay for IMVEXXY through the adjudication process.

Net revenue from the Company's prescription prenatal vitamins business was approximately $1.9 million for the first quarter of 2019 compared to the approximately $3.8 million for the first quarter of 2018. A portion of the lower revenue was created by a price increase in the first quarter of 2019 which caused some customers to increase purchases of the Company's prescription prenatal vitamins in the fourth quarter of 2018. Total operating expenses for the first quarter of 2019 increased compared with the first quarter of 2018. These changes primarily reflect an increase in commercialization expenses for the launch of IMVEXXY and BIJUVA. This is reflected in the SG&A expenses for the first quarter of 2019 which were approximately $34.9 million compared with approximately $20.8 million for the prior year's quarter. This is primarily due to higher sales, marketing and personnel cost to support the commercialization including the expansion of our women's health sales force from 150 to approximately 200 to support the launch of BIJUVA.

Turning to the bottom line. Our net loss for the first quarter of 2019 was approximately $39.5 million or $0.16 per basic and diluted share, compared with approximately $24.4 million or $0.11 per basic and diluted share for the first quarter of 2018.

Move to Slide 24. Last month, we entered into a financing agreement for $300 million non-dilutive term loan facility with TPG Sixth Street Partners also known as TSSP. The initial funding was $200 million with additional funding available at $50 million upon the designation of ANNOVERA as a new category of contraception by the US Food and Drug Administration on/or prior to December 31, 2019. And another $50 million, upon achieving $11 million in net revenue from IMVEXXY and ANNOVERA and BIJUVA for the fourth quarter of 2019.

As you can see in this comparison slide of the differences between our TSSP and mid-cap debt facilities, we see that under the TSSP facility interest is payable quarterly as shown on the amortization line. The outstanding principal amount of the term loan facility will be payable in four equal quarterly installments beginning on June 30, 2023. With a term loan facility maturing on March 31st, 2024. While under the mid-cap facility, we started amortizing the loan in the third quarter of 2020 and the -- we finished the first quarter of 2019 with approximately $122.8 billion (ph) in cash. Compared with approximately $161.6 million at December 31st, 2018. And as we discussed above, we subsequently closed on the TSPP facility. Cash burn was approximately $38.8 million in the first quarter. Now, let me turn the call back to Rob, for closing remarks.

Robert G. Finizio -- Chief Executive Officer, Co-Founder, and Director

Thanks Dan. On today's call, we've talked a lot about IMVEXXY, but I'd like to remind everyone. That the value this Company is based on three FDA approved products not just one. In conclusion of today's presentation. Let me remind you of the overall opportunity the company represents, as outlined on Slide 26.

When you look at the some of the parts, the total addressable markets are large at $1.5 billion for IMVEXXY, $2 billion to $4.5 billion for BIJUVA, and $5 billion for ANNOVERA. That will all be launched this year, with very little promotional competition.

That being said, I'd like to turn the call over to operator for Q&A.

Questions and Answers:

Operator

Thank you. (Operator Instructions) And our first question coming from the line of Louise Chen with Cantor Fitzgerald. Your line is now open.

Louise Chen -- Cantor Fitzgerald -- Analyst

Hi. Thanks for taking my questions here. I had a few. So one question that we got from investors is on the covenants for your new debt piece. Just curious if you could outline anything important there?

And then secondly, I know you've talk through this, but just curious on more specifics, if you could give the gross to net for IMVEXXY, where it is now? Where it's going? What you expect by the end of the year?

And then do you owe any royalties on any of your products. And the last thing is, have you thought about strategically if the vitamins business is a core asset for you? Thank you.

Dan Cartwright -- Chief Financial Officer

Hi. Hi, this is Dan. How are you doing today?

Louise Chen -- Cantor Fitzgerald -- Analyst

Good.

Dan Cartwright -- Chief Financial Officer

Your first, I'm sorry? --

Louise Chen -- Cantor Fitzgerald -- Analyst

I said, good. Thank you.

Dan Cartwright -- Chief Financial Officer

Your first question on covenants, I think the most important covenant that's in the agreement is that we get if we reach $11 million in revenue from all three of our products in the fourth quarter we can get another $50 million as far as the debt agreement itself. We will file that with our third -- our second quarter 10-Q in August.

So the gross to nets, so are from depends on how you want to look at that. So our target $108 heavily, heavily biased on maintenance backs because that seems to be quite the trend right now. The gap between where we are today and $108 that we'll get to in Q3 of 2020, we think majority of that gap will close this year in Q4. So if you think about it the thing that makes that close is just finishing your payer contracting. In that sense, we'll finish commercial in Q3 and we'll finish Part D in Q4 this year.

All right. And as you see in April, the reduction in the headwinds of high deductible plans and copay resets we've already gone up 5% adjudication to approximately 32%. And we haven't had any new additional payer coverages, so we expect that to continue to accelerate a majority of that GAAP between here and $108 will close this year. And then we'll finish it off in 2020.

Robert G. Finizio -- Chief Executive Officer, Co-Founder, and Director

And then as far as royalties, today there aren't any royalties. The only royalties we have to pay would be on our ANNOVERA product when we start to sell that which we expect to come as early as third quarter. So at that point those royalties will vary. It's disclosed in the 10-Q in the footnotes that lays them out very clearly in the table.

Dan Cartwright -- Chief Financial Officer

Louise, last question, vitamins. So the vitamins are in essence of feeder for ANNOVERA, right. So, we have 60,000 to 70,000 new patients coming on that we connect with our copay assistance program and a high, high percentage of them will go on contraception after they're done breastfeeding or having a baby. So we think even though that market is being shunned by payers, we think keeping it and having the connection with those patients will pay huge dividends with ANNOVERA. And that's the intent of that business. If that answers your question.

Louise Chen -- Cantor Fitzgerald -- Analyst

It does. Thank you very much.

Dan Cartwright -- Chief Financial Officer

Thank you.

Operator

Our next question coming from the line of Ken Cacciatore with Cowen. Your line is open.

Ken Cacciatore -- Cowen and Company -- Analyst

Thanks guys. Just a few questions. First, Rob, a lot of detail on the normalization of pricing from IMVEXXY, just wondering is this the pattern or the timing that you expected? If not what has changed and maybe what learnings can we apply to BIJUVA?

And then Dawn, maybe you give us any thoughts on anything on IMVEXXY that's been surprising to you either more difficult or a little bit easy. And then just lastly, just wondering when all you're going to be able to report to IQVIA or the other databases, so we can see on a weekly basis and kind of go ahead and track the prescriptions and make it a bit easier on us. Thanks so much.

Robert G. Finizio -- Chief Executive Officer, Co-Founder, and Director

Yes, good questions Ken. So look, so as far as the timing goes, so I think it's pretty much in line with what we stated from an insurance standpoint. So -- if you look at the model the good news is there's enough data there, it's working. Think about it. Volumes accelerating significantly in this space. So, we're winning over women -- we're winning over doctors. But but the risk that we always heard from investors is as insurance companies come on, step that it's coming, co-pays change your -- you're going to slow down, you can't keep this rate up. Well guess what we're at 32% adjudication and it's just speeding up as we go. And adherence or the fills rate are already above the industry average here in just the 10th month. So you know the game here is to finish the contracts, we only need CVS and Caremark to get to that 70% on the commercial side. And we will definitely get that done in Q3 and then all we have to do is get the majority of the Part D which we've said in Q4 all along, We said post October. Right, October 1 is when those things happen and I know we got united early but we'll get there. And remember we've achieved 6% market share. So just do the math, right. From where we are today 6% market share shows such an unmet need for a new vaginal estrogen and women already exceeding compliance of all the other products with ours.

So, it's really, really attractive -- is over three fills. In addition to that, the data that we've seen -- I'm going pass it over to Dawn here is that symphony already is very close to where we are. I would -- IQVIA and I am as we've tried to work with them and hopefully they'll get more accurate but I think you can look at Symphony weekly and be pretty close.

Dawn Halkuff -- Chief Commercial Officer

Hi, Ken. It's Dawn. So, to answer your question which was around what has been more difficult or what has been easier since the launch of IMVEXXY. I think what we knew or anticipated would be difficult is -- there was a lot of entrenched behavior in this marketplace. These products have been around for a long time, which is why we took the approach we did of providing the $35 open access. And so what I've been very pleasantly surprised by is how providing that as an opening has led to very fast volume growth in fact that volume growth trending with (inaudible) really beating by multiple some of the newer launches in the category. So again it's what we anticipated would be difficult, but that's why we took the approach we did and now that's paying dividends with a lot more doctors adopting us over time.

Dan Cartwright -- Chief Financial Officer

That's the big thing to take away from today's call. You can do the math as the payers come on. And that will fix itself, the payer adjudication will come out. And these net revenue per unit will normalize at that rate and you can see there's enough data there to see that it's not slowing down. Good 32% adjudication, a compliance is growing, so women like it. So, the model's working and I'm glad we did it as opposed to some of the previous launches that have been out there with heavy DTC, heavy big spends and things like that. Because its a very cost effective way to build a product and it's working.

Ken Cacciatore -- Cowen and Company -- Analyst

Great. Thanks so much.

Robert G. Finizio -- Chief Executive Officer, Co-Founder, and Director

Thanks Ken.

Operator

And our next question coming from the line of Jay Olson with Oppenheimer. Your line is open.

Jay Olson -- Oppenheimer & Co. -- Analyst

Thanks for taking my questions. I had a few on IMVEXXY and one for ANNOVERA. With regards to the $108 net price that you're targeting for the third quarter of next year. I guess that gets you to your 60% goal for the $108 maintenance pack. But assuming that your product mix has a few starter packs in there. Does that mean that it could be greater than $108 net price per script when we include some starter packs.

And then my second question, for IMVEXXY is, in your timeline on Slide 6. You didn't mention any metrics for the second quarter of this year. I was just wondering if you could perhaps share your thoughts on what we should expect in the second quarter for IMVEXXY net revenues per unit.

And then finally for ANNOVERA. Can you just talk about the FDA designation as a new contraceptive category. What exactly is the process there and the timeline for that. Thank you.

Dan Cartwright -- Chief Financial Officer

All right. A lot there. Let me try to go through each one and if I don't cover it all let me know. All right. So the $108 net in Q3, is a very conservative number. You're right. And the reason we did that is so we have some upside. Let me walk you through that. It is heavily heavily, heavily biased on maintenance packs as you can see through our numbers as were vast, vast majority of -- scripts are coming from what does that mean to everyone. That means when a new woman comes in and she atrophic, she would start on a starter pack which is get therapy every day for two weeks and then twice a week from there on after. That WACs, 405 -- $405.

Well, when you already stable on another product even though the label says to start with a starter pack on the new product, most doctors are just switching them over to maintenance packs. So private label that's one area we can really improvement in and if we do that it will improve that number from 108. I think there's some upside that we can get there. But remember my job is to be conservative here.

In addition, to that, that also shows such a pent up demand here for something that is physically different than what's out there today. And I think the numbers are showing and the model's working. Does that answer your question.

Jay Olson -- Oppenheimer & Co. -- Analyst

Yes, that's helpful. Thank you very much.

Dan Cartwright -- Chief Financial Officer

The other thing is remember every additional refill is another 74 million net to the bottom line. Assuming very conservative assumptions I read off before. 25% to 30% market share. No price increases. Assuming no new women, there's all these it's very, very conservative assumptions there. Would you articulate the value that a better received product that's used more often can deliver and that's why we're showing every single month on compliance. To show you how well this is received and how fast these scripts are going up.

And I'll tell you every single question, I've ever received on this is, hey, once you got to 25%, 30%, 35%, 40% adjudication and a step that has kick in and the copay cards don't work like you've seen with other launches, is that going to slow you down or stop you, and it's not. They're all accelerating. So, the model works. We've got 10 months of data and we've got 6% market share, right. We're just starting. It's only our first product. So we're going to keep going here. So, on Slide 6, you're asking are we going to tell you what we think we can do for Q2 in net revenue. So what we're saying is already in April we've seen a 5% uptick in adjudication without any new plans coming on. And that's basically the high deductible and copay resets kind of headwinds going away. We can't give our numbers for Q2 obviously, but what we can do is we can tell you that the majority of the GAAP between where we are now and when we get to the $108 will happen this year.

That makes sense.

Jay Olson -- Oppenheimer & Co. -- Analyst

Yeah.

Dan Cartwright -- Chief Financial Officer

So, by Q4, I don't care if you're in Part D or commercial. I'm going to have a lot of coverage and they're going to get a lot of adjudication and I don't care what the population is. I just need customers. All right. I just need to continue to drive this model and take market share. Okay.

Jay Olson -- Oppenheimer & Co. -- Analyst

Okay.

Dan Cartwright -- Chief Financial Officer

All right. And then last, last is ACA. So, what's the process? So the Affordable Care Act is -- has currently has 18 what they call methods or types of contraception and the ANNOVERA does in our opinion and from what we've understood with development of the drug with population counsel really does not fit into the current 18 methods. Let me give you an example.

If you are a 90 day pack of birth controls versus a 38 or 28 day pack those are different methods because you don't want it to confuse it. There is a currently monthly vaginal ring, but to make sure that's never confused for an annual ring. Especially, with a different active in it. There will be a separate method or category created. Once we launched that in Q3. The FDA will start that decision and when they officially listed on there -- on their website it will be adopted by payers across the country. The new news today is that you've got 42 million women in almost 10 states that the day we launched this -- once they go through the therapeutic review, which will be lot faster than the six-month block which is new news here. There will be no copay for those 42 million women in those 10 states. In fact, there's another nine states that can do a therapeutic review and can have a copay, but also will be a very accelerated adoption given there's no six month blocks just a therapeutic review. So, the eight -- so this whole situation here with revenue coming from ANNOVERA, we think has taken a great step forward here.

Jay Olson -- Oppenheimer & Co. -- Analyst

So, the clock for designating ANNOVERA as a new contraceptive category starts at launch?

Dan Cartwright -- Chief Financial Officer

You got it. So, we have a lot of inbound demand on a weekly, it used to be on a daily basis still from lots of different types of organizations. So, as soon as we get some product we want to help meet that demand and start that clock and that'll be Q3. Okay.

Jay Olson -- Oppenheimer & Co. -- Analyst

All right. Thank you very much.

Dan Cartwright -- Chief Financial Officer

Thank you.

Operator

And our next question coming from the line of Annabel Samimy with Stifel. Your line open.

Annabel Samimy -- Stifel, Nicolaus & Company -- Analyst

Thanks for taking my questions. Just back on IMVEXXY. I know that you're getting a little bit more adjudication, so to what extent is some of this being dragged down by the deductibles and do you have a sense if that's going to drag into Q2 and whether there are any of these plans use copay accumulators that could potentially extend this deductible. Where were -- you'll have to continue covering the prescription.

And then on BIJUVA. So, just in terms of coverage, do you feel that you're in a better position with these payers because now you have two products to work with and adjudication may go faster. I know that you have a few -- that are presumably already going to be adjudicating upfront. And are you considering doing anything differently with a copay card and I know said you've got $35, but it seems like it's taking a long time to sort of get this going and meanwhile, you're covering a lot of the cost of these prescriptions.

And then finally on -- another -- I think, I just missed it. But when the clock starts, what is the time when the clock starts that you actually get the classification is a set schedule? Thank you.

Dan Cartwright -- Chief Financial Officer

That's a lot, Annabel. Let me start at the top, if I missed anything let me know. All right. So copay accumulators would they affect us? No, that's in specialty, that is not in our category at all. High deductible?

Yes. High deductible plans copay resets, huge impact across the industry Q1, that was my statement as to an April adjudication is already up 5% or 6% with no additional, new plans coming on and that -- we believe that's a reduction in the high deductible plans and things like that. So, we expect the net revenue per product to continue to accelerate throughout the rest of Q2 and Q3 and Q4. Right. Does that answer your question on high deductible?

Annabel Samimy -- Stifel, Nicolaus & Company -- Analyst

Yeah. That -- well -- exactly I have no covenants and letters already. It's helpful. So that's good.

Dan Cartwright -- Chief Financial Officer

Yes. So here is the beauty of our portfolio, the speed of coverage. So part B as you can see is a massive portion of IMVEXXY. And that's where we're weakest. That'll fix itself. I -- we will cover the plans and we'll get majority of part and commercial in Q3 and Q4. We just got to keep growing market share because all of those scripts will cash in. So don't worry about that. But the beauty of BIJUVA is the Part D coverage is insignificant. It's like 10% or 12%. It's not a meaningful population and it's a cash pay market we're going into. With a copay card of $35 where women are used to paying $50 or two generic co-pays that can easily be $40. And it's a great, great step in our direction. So, as you're seeing a six quarter process for IMVEXXY because of a Part D contracting timeline that is very slow, that is significantly reduced by a quarter two for BIJUVA. And then when you get to ANNOVERA, you've got 20 states where they can just do a therapeutic review and have to pay right away. Regardless of ACA and 42 million women will have no out of pocket regardless of age today and that will answer your question on ACA.

The clock starts today, we launch it. I can only look it historically there is no guideline to tell them when they have to give us a decision the FDA, but I can tell you that in the past when it first came out, some products were done in just a couple of months. Some took up to six-months. So that would be the range, I would give you. But I want to emphasize that 10 states and 42 million women will we're going first have no out of pocket. Okay?

Annabel Samimy -- Stifel, Nicolaus & Company -- Analyst

Okay. All kind ---

Dan Cartwright -- Chief Financial Officer

So every product will accelerate by quarter to coverage, to normalize.

Annabel Samimy -- Stifel, Nicolaus & Company -- Analyst

Okay. And if I could just ask a couple of follow-ups. On the Part D plans, your adjudication is low. Didn't Medicare -- doesn't medicare have to legislatively cover these products and I guess why is adjudication so slow? On the Part D plan? And then -- go ahead, I'll just follow up on?

Dan Cartwright -- Chief Financial Officer

It's exactly what I said it would be on every single earnings call. We got united early. And I always said it would be October before we were gonna get anything meaningful in Part D. And that's Q4 and I'm sticking with it. All right. So commercial move quickly. We only have one guy to get to get to that 70 plus percent which is that in the first Caremark. And -- on the Part D side it's just the way the clock works. There's also a lot of instability in that market with potential legislative changes as well, which isn't driving them to move quick, but if you go back and look at what we've said, we've always said Part D is October 1st when the plans reset start, start time for us. Okay.

Annabel Samimy -- Stifel, Nicolaus & Company -- Analyst

Okay. And just, and just quickly on the some of the legislature changes on ANNOVERA. You know, there is, I guess the recent you know, it's a little bit of a complex issue, but when it comes to the recent declarations by the administration of declaring religious freedoms is there any chance that there going to be entities that refuse to cover this or any of payers that refuse to cover this and how might that affect you going forward?

Dan Cartwright -- Chief Financial Officer

Well, remember there's federal law like you said, ACA and then the state laws. So, 20 state laws there's no declaration the other 30. If they decided to occur -- I believe the total number of six employer groups today that have that right and have been excluded. I don't think that's new. They could expand that potentially, but let me tell you something. Contraception and the cost of unwanted pregnancies is something because you know we've pretty well, we understand politics well at our -- on our board given the makeup of it. Across the aisle on both sides contraception and women's rights are something that both sides believe in.

And I don't think the ACA mandate, on contraception will change. I could be wrong, but if it does you still have the other 20 states in state law that cannot change. Okay. Unless they do it one by one. So, I think we're in great shape with ANNOVERA.

Annabel Samimy -- Stifel, Nicolaus & Company -- Analyst

Great. Thank you.

Dan Cartwright -- Chief Financial Officer

Thank you.

Operator

And our next question coming from the line of Chris Schott with JP Morgan. Your line is now open.

Christopher Schott -- JP Morgan -- Analyst

Great. Thanks very much. Just a couple of quick ones here. First, on BIJUVA. Any update on how you're thinking about normalized price per unit there given some of the experiences with IMVEXXY, so far. I think there's many change in the thinking at all on that front. My second question, the comment about 70% coverage on the commercial side by 3Q. Does that mean we should expect that adjudication number and commercial to get to 70% by the time we get the end of 3Q or is any type of lag between coverage and adjudication as we think about that ramp, I guess and price per unit. And then my final one is just -- sorry, for those two and I do follow-up with that.

Dan Cartwright -- Chief Financial Officer

Could you say that once -- sorry, you broke up a little bit here. I got the BIJUVA question on -- what's it going to be like, but what was the second question?

Christopher Schott -- JP Morgan -- Analyst

The second one is the 70% commercial coverage by 3Q. Does that mean basically we should be getting to about 70% adjudication in commercial by 3Q, or is there any type of lag between coverage and adjudication?

Dan Cartwright -- Chief Financial Officer

Absolutely, so -- so to answer your second question first. 70% contracted or one contract away from that in that sense. Once it's done it does take some time for employer plans and different pieces to get it going. You get a great bump right upfront. Don't get me wrong. You'll see it move the needle, but there'll be a lot of -- let's say employer plans that do it a little bit slower and yet the column and things like that, that we find out as you go. But the biggest headwinds you're seeing in Q1 isn't that. The biggest headwind in Q1 we believe are more the high deductible copay resets and our biggest plan came out in March. Right. That was our first big pickup. So, we will get to that 70%. It does not mean you have 70% commercial adjudication, there will be some lag there. But I don't think it'll be that significant, especially at the end of the year as the copay resets are gone.

And then the question on BIJUVA. Yeah, we still think it's pretty much in line with IMVEXXY from a potential standpoint of trending on volume and or similar to IMVEXXY pickup once we get again commercial coverage and we can really push it. Okay.

Christopher Schott -- JP Morgan -- Analyst

Great. And then the final just follow up. I just -- I think one of the charts showed that you were kind of overweight at this point Medicare Part D versus commercial plans. Just give me -- what exactly is going on there and is that something we should think about normalizing over time?

Dan Cartwright -- Chief Financial Officer

Absolutely. Great question. It shows and I'll turn it over to Dawn here as well. It shows, just a huge pent up demand. Remember, if you're in Part D, you're typically a little bit of an older age and it's showing that women want a new estrogen product and they're staying on the product. That problem of being overweight on the Part D side is actually a high quality problem. It doesn't look good today because you don't have the coverage there. But that coverage will come in and it will fix itself and we'll keep that market share. Dawn, do you have anything to add there.

Dawn Halkuff -- Chief Commercial Officer

The only thing to add there is, when you look at the refills that we're getting what that suggests is that this is a product that's providing a good experience and remember that the major gap in the market and why IMVEXXY was designed the way it was, was to provide the patient satisfaction needed versus the other experiences on the (inaudible) that were out there in the marketplace. And so, as Rob said, the fact that we are overweight in the Medicare older population suggests these are women coming from the other products in the marketplace where there wasn't a good experience. We expect that to normalize over time.

Christopher Schott -- JP Morgan -- Analyst

Thank you.

Dan Cartwright -- Chief Financial Officer

Thank you.

Operator

(Operator Instructions) And our next question coming from the line of with Chris Howerton with Jefferies. Your line is now open.

Christopher Howerton -- Jefferies -- Analyst

Thanks for taking the questions. I think a lot of the questions were asked already. But I was just, I think from an operational perspective. I'd just be curious to know kind of what the different components are of the copay assistance program? How does that work from a patient experience perspective? And what services specifically does VitaCare Prescription Services add to that process?

Dan Cartwright -- Chief Financial Officer

So, give me that question one more time. So copay assistance? What components are there?

Christopher Howerton -- Jefferies -- Analyst

Yes. (Multiple Speakers). As you know from a patient experience perspective, how does that work?

Dan Cartwright -- Chief Financial Officer

Oh, I see. Okay when a patient --

Christopher Howerton -- Jefferies -- Analyst

And -- Yeah, go ahead.

Dan Cartwright -- Chief Financial Officer

Sorry, Chris. To cut you off. Does was it more?

Christopher Howerton -- Jefferies -- Analyst

And then I just -- we noticed that on some of the copay assistance/pages there was something called VitaCare Prescription Services. I was just curious what that was about? So that was the --

Dan Cartwright -- Chief Financial Officer

Absolutely. So our copay assistance card is from RelayHealth and (inaudible). All right. Those are the two big companies to use. And when a patient ops into that -- that allows us to contact that patient as we've always said like the prenatals, we are in touch with a high, high percentage of our patients which is the get -- which is the absolute key to being in touch with this whole compliance or a non-branded education piece depending on what's important. So they opt-in when they -- when they use our copay card and that's VitaCare is.

Christopher Howerton -- Jefferies -- Analyst

Okay. So, it's basically, just an assistance program to kind of get them through the process and so that you can get to know a little better is that a fair characterization?

Dan Cartwright -- Chief Financial Officer

Very.

Christopher Howerton -- Jefferies -- Analyst

Okay. All right, great. And then when you think about the patients that are utilizing the copay assistance program relative to the overall numbers that you're seeing is there any differences in terms of what the patient or payer mix is?

Dan Cartwright -- Chief Financial Officer

No, not at all it's exactly what we put up on the board. It's exactly what we put up there. So let me give you an example. So we had -- I believe 37% Part D. Yet, the overall percentage was 24% or 23% for the markets who overweighted there. All right?

Christopher Howerton -- Jefferies -- Analyst

Yeah.

Dan Cartwright -- Chief Financial Officer

Our cash pay was low and our commercial pay was a little bit lower than where we should be and overweighted on Part D.

So, it's just more Part D women happen to want to get IMVEXXY script filled, and we just got to get those payers on board which we will do. But we're going to have problems here guys. I'd be telling you right now. We're one contract away from getting that commercial thing rounded out to our commercial coverage round out to 70 -- approximately 70%. And then we've just got to get here to Q4 to get the contracts down one of the Part D side. We'll deliver it.

Christopher Howerton -- Jefferies -- Analyst

Okay, great.

Robert G. Finizio -- Chief Executive Officer, Co-Founder, and Director

And maybe just one last clarification with respect to that program for the cash pay patients and it looks like Medicare as well -- they may not be fully eligible for the $35 total out of pocket. What would be the maximum that a patient would expect to pay using those services?

Dan Cartwright -- Chief Financial Officer

It depends on their plan. But there's somewhere from what I understand to $40 and $50 typically $45 or $40 for Part D copay, for VVA products. We only now -- remember we only have United and the employer groups can we designed a little bit different, but it's typically very close to what our commercial copay card is $35.

Christopher Howerton -- Jefferies -- Analyst

Got it. Okay. And then the last one, Dawn, was kind of describing a little bit around the ANNOVERA launch that it would be a soft launch, in the third quarter and that there would be additional kind of CMC work that needs to be done. Could you provide any more color on exactly what has to happen to kind of get to full scale?

Dan Cartwright -- Chief Financial Officer

We will be at scale here in Q3.

Christopher Howerton -- Jefferies -- Analyst

I got it.

Dan Cartwright -- Chief Financial Officer

The reason we're launching it soft. So, let me be really crystal clear. Q3, is the goal for scale. We're going to build inventory in Q4. But the whole idea is there's a lot of inbound demand. And if we can meet that demand in these states with these state laws that is in essence in -- you never heard us talk about this before our last earnings, it is quite an opportunity with no copay mandated coverage in 20 states in this -- in the country mandated coverage in 10 of those and 42 million women having no out-of-pocket expense.

Without ACA. So, we want to try to meet that demand. We want to start to start that payor clock, as we build inventory for, of national launch. Right. So kind of that ACA clock is ticking we're building inventory for the national launch and meeting the demands where we can't get coverage out of the gate in those first 20 states. That makes sense how it comes together?

Christopher Howerton -- Jefferies -- Analyst

Yeah, yeah. That makes sense.

Dan Cartwright -- Chief Financial Officer

Kind of taking the payer. The payer gift we're getting here in the 20 states and matching that with our initial inventory. As we build bigger inventory and the ACA decision comes for a national launch.

Christopher Howerton -- Jefferies -- Analyst

Got it. Okay. And actually, a -- yeah, going ahead -- I'd rather --

Dan Cartwright -- Chief Financial Officer

We don't expect any manufacturing capacity issues at all.

Christopher Howerton -- Jefferies -- Analyst

Fantastic. Okay, great. And, you know, I'm sorry -- there was just one last question on the IMVEXXY revenue. Were you -- are you able to split that out in terms of new patient prescriptions relative to refills?

Dan Cartwright -- Chief Financial Officer

Absolutely. I believe to simply do that, I believe, Symphony has it. Somewhat accurately today. It's pretty accurate if you take a look.

Christopher Howerton -- Jefferies -- Analyst

Okay.

Dan Cartwright -- Chief Financial Officer

If I believe the news are consistently low, right now, and they're working on getting those corrected. And that's why we'll continue to give monthly updates once Symphony gets perfected we'll probably pull back to quarterly updates. But it is getting pretty close. It's only a portion of it that's off is the news and I believe they're showing up now. They're just a little bit low.

Christopher Howerton -- Jefferies -- Analyst

That's right. So from late to -- got it. So, the extrapolation seems pretty good in terms of what they're showing on a relative basis. But there could be an underestimation of new patient adds basically.

Dan Cartwright -- Chief Financial Officer

That's it. That's exactly it. The news are a little bit low. But don't get -- they're good, they're working on it. They're working with us. They've been wonderful. So --

Christopher Howerton -- Jefferies -- Analyst

Okay. All right. Well, thank you very much for taking my questions. I appreciate it.

Dan Cartwright -- Chief Financial Officer

Thanks Chris. All right everyone we thank you --

Operator

At this time, I'm showing no further questions.

Dan Cartwright -- Chief Financial Officer

So, I'd like to end the call. Sorry, Operator. I'd like to end the call today and remind everyone of our Investor Day in New York City on June 10. And we look forward to giving everyone a very deep update on all of our progress and strategies going forward. Thank you.

Operator

Ladies and gentlemen, thank you for your participation in today's conference. This concludes today's program you may all disconnect. Everyone have a great day.

Duration: 55 minutes

Call participants:

Nichol Ochsner -- Vice President of Investor Relations

Robert G. Finizio -- Chief Executive Officer, Co-Founder, and Director

Dawn Halkuff -- Chief Commercial Officer

Dan Cartwright -- Chief Financial Officer

Louise Chen -- Cantor Fitzgerald -- Analyst

Ken Cacciatore -- Cowen and Company -- Analyst

Jay Olson -- Oppenheimer & Co. -- Analyst

Annabel Samimy -- Stifel, Nicolaus & Company -- Analyst

Christopher Schott -- JP Morgan -- Analyst

Christopher Howerton -- Jefferies -- Analyst

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