Evofem Biosciences, Inc.
Q2 2021 Earnings Call Transcript

Published: 11 Aug 2021

[Operator:]

Good afternoon, and welcome to Evofem Biosciences Second Quarter 2021 Results Call. . Please be advised that today's conference is being recorded. I would now like to turn the call over to Evofem's Vice President of Investor Relations, Amy Raskopf.

[Amy Raskopf:]

Thank you, and good afternoon, everyone. If you haven't done so already, I encourage you to access the Second Quarter of 2021 presentation and the press release we have issued earlier today, both of which are at evofem.com under the Investors tab. Before we begin, I would like to remind you that remarks on this call will contain forward-looking statements, which are made only as of today, August 11, 2021. For a more detailed description of important risk factors that could cause our actual results to differ materially. Please refer to our annual report on Form 10-K and our most recently filed 10-Q. With that, I'll turn the call over to Saundra Pelletier, Evofem's CEO.

[Saundra Pelletier:]

Thank you, Amy, and thanks, everyone, for joining us today. Evofem delivered strong and sustainable growth in the second quarter of 2021. This includes 47% growth in Phexxi prescriptions and 65% growth in the units dispensed, and it also includes a 52% increase in the number of health care providers prescribing Phexxi. We achieved this despite an ongoing and ever-changing pandemic, at a time when many companies were below the impact of COVID on their results, we are delivering, and we are growing. The measure of the company's choices and people, strategy and ability to execute is often vesting and timely process. It's much easier to perform when doctors' offices are open, when patients are not in lockdown and when the overall tone of life is more positive. But what you're going to hear today is that we are delivering on our promise of breaking the hormone glass ceiling regardless of obstacles. Evofem has proven, the contraceptive market was ready for innovation. The Phexxi category has been dominated by hormones for decades, but there is a demand for a non-hormonal choice without the serious side effects that many women cannot tolerate. There are also the invisible side effects that many women feel, just makes them not quite like themselves. The feelings that makes them worse, whether something more serious is happening to their body because they take a hormonal medication every day that they don't even need. The demand is there, as evidenced by our continued growth. We look to harness that event and accelerate our growth by launching a robust national brand awareness campaign, featuring an any award-winning celebrity in early September that will break convention and will connect with women in new and meaningful ways. I'll discuss this and other ongoing initiatives after our CFO, Jay File, reviews the financial results and Russ Barrans, our Chief Commercial Officer, discusses Phexxi metrics and reimbursement.

[Justin File:]

Thank you, Saundra, and good afternoon, everybody. In the second quarter of 2021, net product sales increased to 68% to $1.9 million compared to $1.1 million in the first quarter. During the second quarter, we implemented cost containment measures across all departments. These included reduced spending, reduced non-sales force headcount by 15%, eliminating certain consulting roles and eliminating hires that were budgeted in 2021. These measures will result in aggregate savings of $9.5 million on an annualized basis. Research and development costs were $8.5 million, an increase of $1.2 million from Q1, reflecting higher enrollment in the EVOGUARD trial. As a reminder, trial costs are currently paid by restricted cash from the adjuvant investment last fall. Selling and marketing costs were $27.2 million, a decrease of $3.3 million from Q1, driven by lower media and agency fees, which were offset by costs related to the Phexxi sample rollout. General and administrative costs were $6.4 million, a decrease of $1.3 million from Q1, driven by lower headcount, recruiting and outside services. As a result, total operating expenses were $43 million, a 6% decrease from Q1. As of June 30, 2021, we had $47 million in cash and cash equivalents as well as $14.9 million in restricted cash from the adjuvant notes available for use. This totaled $61.9 million for use in ongoing operations. With that, I'll turn the call over to Russ for more detail on our commercial progress. Russ?

[Russell Barrans:]

Thanks, Jay. In the second quarter of 2021, Phexxi prescriptions increased 47% and units dispensed to the patients increased 65% from the prior quarter. June was our strongest month yet, with over 5,000 prescriptions and nearly 6,000 dispensed Phexxi units. Prescriptions and units dispensed trends for July are on track to meet or exceed June levels, and that is despite the heavily traveled 4th of July holiday. We also saw a 52% increase in our prescriber base from Q1 to Q2, more than 4,700 HCPs prescribed Phexxi in the second quarter. From launch through July 16, more than 7,700 HCPs have prescribed Phexxi and this number continues to grow week-over-week. Our strong growth was driven by a highly engaging DTC campaign, increasing access by our professional sales team, growing awareness of Phexxi among health care providers and women seeking contraception that is right for today. We are already seeing the benefits of the Phexxi samples that we rolled out in Q2. Our team has successfully introduced sampling to our HCP audience, and they have been received exceptionally well. The main benefit of a 3-pack sample is that it eliminates the need to give out a detailed unit for a woman to try Phexxi. We recently conducted some market research to understand who is using Phexxi and where are they coming from? We learned that 49% of women coming to Phexxi were not on a medical contraception in the past year. This aligns with our expectation among this audience. As expected, we are growing the non-hormonal market. Another interesting finding is that 29% of women coming to Phexxi are switching for oral contraceptions and an additional 7% are switching from hormonal rings and patches. In aggregate, more than 1/3 of our Phexxi users have switched from hormonal contraception from Phexxi opting for a non-hormonal contraceptive gel. This data indicates we are converting a significant number of Phexxi users from the hormonal contraception segment, representing about 18 million women using hormonal contraception which, together with the women currently not using a prescription contraception, suggests that Phexxi may have one of the largest target potential of any brand in the contraception category. Another important finding of our market research is that the age of the demographic of women most likely to use Phexxi is early 20s to under 35. That is, as you would say, our sweet spot, exactly what we expected and who we are already aligned with in our DTC campaign. Just to quickly touch on reimbursement, while we continue to work towards having Phexxi placed on the ACA list of contraceptive options, over 65% of prescriptions are currently covered for Phexxi. The prior authorization process for the remaining 35% of virtually insured women is the most straightforward, easy to complete prior authorization form, that I've seen in 30 years of working in female contraception. And our approval rate on PAs exceeds the benchmarks for the category in a significant way. And finally, 100% of Medicaid recipients have access to Phexxi through the National Drug Rebate agreement. Additionally, Medi-Cal in the State of California added Phexxi to a preferred drug position in July, providing Phexxi undue restricted access to the 2 million women with contraception through Medi-Cal. With that, I'll turn it back to Saundra.

[Saundra Pelletier:]

Thank you, Russ. Already, we are taking meaningful market share performance, and we're growing the non-hormonal market. With 47% prescription growth in Q2, we're excited to keep that momentum going and continue to increase our market share. In early September, the Phexxi movement is getting kicked into high gear, when we launch our new fully integrated 360-degree marketing campaign for Phexxi. The campaign was born out of the idea that women deserve to be completely in control of their bodies, of their decisions and especially, their birth control. The campaign empowers women by creating a world where they make the rules. There's no judgment, there's no settling, just an understanding that when it comes to something as important as pregnancy prevention, Phexxi is a brand that listens, understand and lets women call the shot. It's hormone-free control on fair terms. I was on the set last week with our creative team and our celebrity ambassador, and I look forward to hearing your reaction to this campaign. Another key initiative is our ACA strategy. We continue to work with lobbyists, politicians and women's advocacy groups with a goal of gaining a new category for Phexxi as a vaginal pH modulator on the FDA's contraceptive categories chart. We feel very strongly that our ACA efforts are going in the right direction, and the recent positive progress increases our confidence that we will succeed. The Health Appropriations Committee, which funds the office of women health, included in a funding memo, that they expect the office of women health to take action on the contraceptive categories chart. Additionally, the Federal Health Resources & Services Administration is currently reviewing its guidance regarding contraceptive coverage for insurers and expects to complete its review late this year. We believe that, that review will culminate in a positive update to the current guidance and will ensure new and unique methods, such as Phexxi will be required to be covered by insurers in the U.S. under the ACA. Gaining this new category will provide increased access to Phexxi for women across the U.S. You already heard from Russ, how incredibly simple Phexxi's prior authorization works are, while they will no longer be needed. The majority of insurers will offer Phexxi to their members at no cost to women. Now turning to R&D. I'm pleased to report that enrollment in EVOGUARD remains on track to complete enrollment by the end of this year. This is our pivotal Phase III trial with EVO100, with the prevention of chlamydia and gonorrhea. We continue to expect to report topline results in the first half of 2022, and assuming positive results, we will file an sNDA for these potential new indications by the end of next year with a 6-month review. Our work dovetails on the CDC's newly released STI National Strategic Plan that includes, among its goals, to support the development and uptake of STI's multipurpose prevention technologies like Phexxi. Our market research estimates that prevention of chlamydia and gonorrhea is a $2.1 billion market opportunity in the U.S. alone above and beyond the USD 2.4 billion opportunity in contraception that we are currently addressing. And in STI prevention, there are no FDA-approved prescription preventative measures. Right now, the choices are condoms or AMPREVENCE, and based on the continuing rise of reported STI rates. Clearly, that is not enough. These are just a few of the many near-term catalysts for AMPREVENCE that we believe will support our ongoing growth and our ability to deliver long-term value for shareholders. In the life cycle of any new successful brand, there are critical levers that must be activated. We are building our inflection claim, by educating health care providers, raising awareness among women and driving women to offices, resulting in them getting prescriptions that are rapidly growing month-over-months. Bottom line, we continue to grow during COVID. This is because we have the right product, the right team and the right message. Look, at best, when women gets put on hormonal birth control, it is really a craft shoe. Maybe you won't have hormonal side effects, but maybe you will. The moodiness, the sense of just not feeling like yourself, literally clients all months want and not knowing why are just some of the things that we hear every day when we get feedback from women. Women want to feel like themselves again and stop having hormones determine how they feel. This is why Phexxi delivers on this avenue. So with that, operator, please open the call for Q&A.

[Operator:]

. Our first question comes from Ram Selvaraju with H.C. Wainwright.

[Raghuram Selvaraju:]

So in the context of what you are seeing from a script trend perspectives as well as underlying market dynamics. Can you maybe comment a little bit on what some of the factors are that are driving women to switch from one type of contraceptive or another to Phexxi? And if you can also give us a sense of what you are seeing emerging in terms of trends among women who are currently not using active contraceptive methods.

[Saundra Pelletier:]

Yes. Yes. Thank you for the question, Ram. Well, just to start, I will say to you that what we have all been experiencing is when we open up the pandora's box to say, let's talk about hormonal birth control, women respond quickly and say, "oh my god, don't even get me started." Even then we'll say don't even get me started. But Russ, do you want to add -- more crisply put a fine point on that.

[Russell Barrans:]

Sure, Ram. One of the things that we found in market research, but had also been discovered in other research is that 70% or greater, the women who are currently using a hormonal method to indicate that they have some concerns about their exposure to hormones. They indicate that when they want to become pregnant, they're afraid that might hinder their ability to oral -- there is some concern about what's the long-term implications of decades of hormone use has on their health. So we think that, that is really probably the major driver that is taking these women once they've seen our DTC campaign or their health care professional has shared with them that there is now a new option that's available that goes beyond hormones, that is what really drives that segment. So in a way, it's not surprising to see that we've got nearly 1/3 of -- or more than 1/3 of our users switching from that method. But it is a pleasant thing to see because it validates all things that we knew were true. And when we start looking at some of the trends among the nonusers, again, we indicated we have about 49% of them or roughly half that are coming from that. A couple of things that I saw in that trend is that they did respond by going to their doctor's offices. As we have seen previously in a market research that 80% of those were still seeing their position at least once or twice in a year. So it really dovetails in, as we said, that -- these women are saying, "I only quit because there was nothing available for me." But now there is and the women who are on hormonal methods are saying, "I've been waiting for something to come, I wasn't willing to take a chance on nothing." But now that it's here, we're seeing large numbers come from that category as well.

[Raghuram Selvaraju:]

That's very helpful. Also, I was wondering if you could comment on how you expect sales and marketing spend to evolve over the course of the second half of 2021? And specifically, when we talk about lower media and agency fees, can you discuss what you have found to be most effective in terms of media dollar allocation spend? And what you have elected not to continue pursuing because it wasn't having the appropriate impact.

[Russell Barrans:]

Well, thankfully, for us, one of the things I can say is that working together with our partners that analyze all this or looked at it. We found ourselves that we pretty well have been very effective at our spend, and we put it all in the right place. We did get some eyebrows look, I think, initially when we started going to TV because people had said, "well, isn't TV sort of a thing of the past." So we understood that during COVID times, that women were returning to because they were at home and it wasn't just on their phone anymore, but it was actually in these capable cases. So we found that, that perfect mix of not only on air, but also on those platforms like Hulu and YouTube TV and places like that where you also can just stream it on to your device has been great. And then mixing that in together with the search that we've done. And the amazing thing, Ram, is we're getting just an incredible amount of what we would refer to as unpaid search. In other words, it's organic. They're finding it themselves. And then when we kind of synergistically put that together with the way it is being discussed in social media, among those women who have influence among others. We found that our spend is just about ideally placed and there hasn't really had to be a whole lot of shift or adjustment in that. So we would anticipate that, going forward, it would be in a very similar space as we've had it in the first part since the launch of our DTC campaign. And the same thing, I think, you asked on the sales side would be true. We had been pretty active at making sure our sales team was in the right places and that they were being utilized to the maximum. We've made a few switches in the sense that when we found that there were some great coverage in one part of the country where there was no access issues. We've switched those positions, but we maintained the same spend or the same number of people that are out in the field calling upon on health care providers.

[Raghuram Selvaraju:]

Great. Very helpful. I also wanted to ask, specifically, about the prescriber base and how that is evolving? And if we look at the number of prescribers who have written a script for Phexxi, can you see a group within that group, a subgroup as it were of kind of repeat prescribers? Is that a developing trend that you can actually tease out at this point? Or is it really too early to tell who are likely to be kind of high-volume repeat prescribers of Phexxi at this juncture?

[Russell Barrans:]

Well, what I will say is that we do continue to see that prescriber base grow pretty substantially month-over-month, quarter-over-quarter. And one of the reasons I think we're getting there is as we went out and had our salespeople calling on offices that were still open, that weren't shut down, that wanted to find out more information in a variety of different ways, whether it was through the different programs that were offered for them to come outside of their office or inside their office or virtually. That set the base up really well for when the DTC drove these women in, that they were ready to prescribe and give them the Phexxi as they had asked. Now we started looking at how that breaks down. We're not completely ready to go down to the scientific part of this and say this is absolutely what's happening. But we do find that if you look at the top prescribers, they do tend to be more often women than men, and they tend to be maybe only in practice up to a 10-year period of time versus those who've been in practice for 25 years. Probably those who are, again, closer to their time as a resident and are finding that their -- the women who call -- who comes to them are also the younger set versus those who are moving into more of a gynecology practice.

[Raghuram Selvaraju:]

Great. Very helpful. Just one other question. Do you have any updates at this juncture regarding the ACA ad situation?

[Saundra Pelletier:]

Well, we actually -- so where we are now is that we haven't given some positive updates that everyone has agreed that, in fact, the contraceptive chart should be updated and will be updated. The challenge is the timing. And so -- what the indication that's been given to us is that it will likely happen by the end of the year. However, we're not just going to sit back and cross our fingers. We actually have a very deliberate push where I'm actually going to be on Capitol Hill next month. I have a series of meetings with a variety of different advocates and politicians. And we also have a social media push talking about the fact that our product, in particular, as a vaginal pH modulator addresses a population of women who cannot use a hormone clinically contraindicated, and yet they are being denied access. So we have had very positive correspondence, but we have made a very serious push. And so I would think that we have agreement that we should have our own category, but the issue is timing. And so I am hoping that my trip is really going to activate a much more precise decision point. But I would tell you, we were going to be betting, we would say, end of the year or first quarter, but we're going to try to push that to be sooner as possible.

[Operator:]

Our next question comes from Annabel Samimy with Stifel.

[Annabel Samimy:]

I noticed, since you've implemented the sampling to, I guess, a 3-unit sample instead of a full box, and you also have 65% covered lives over 55% last quarter. So could you give us a sense of how that potentially helped your net price? And what can we think about going forward as far as improvement?

[Russell Barrans:]

I think one of the things, Annabel, is done for our net pricing. Because we have started seeing a greater number of those are going through, as you said, we are starting to see that progress happen, that, is by its nature, has started to do that because we're not having to cover such a large amount in terms of the co-pay card situation. It's a part of our ACA strategy where we really believe that if we will continue to drive women who are interested in a non-hormonal method, we continue to make sure that the PA process is an easy one. We're helping the offices in the sense that we're using cover my meds and we're making sure that our salespeople on the streets understand how to activate this without really requiring a lot of time or effort on the part of the office's staff. As Saundra mentioned, it typically is just a couple of quick check boxes, and we've got a good number of those that are going through that way. So that's been part of that. The sample has allowed us to then make sure that if there is a PA process going on, that for the next 24 hours or so, if that's how long it takes, that they have something and their physician to begin the process of using Phexxi. And it also as you referred to, it eliminates the need to make that first one free with the co-pay card in order to give them an opportunity to use the product and get some trial with it. So those are all very positive things for us, and we think that's having some brilliant impact upon our gross to net.

[Annabel Samimy:]

Okay. Any chance that you can quantify that? I think it was about $85, net, last quarter. Could you give us something for this quarter?

[Justin File:]

Yes. This is Jay. Just to expand on that, as Russ mentioned, the focus really is on script growth through the remainder of the year leading up to ACA. And so we're not spending as much time managing gross to net, down to a specific number at this point. We're pretty happy with some of the implementations of items that we met that Russ commented on. So we won't be giving out any further guidance on it at least through the end of the year.

[Annabel Samimy:]

All right. So I guess, moving on, I did notice also that you have a lot more coming from the contraceptive -- oral contraceptive market or hormonal market than you originally anticipated. I think you only had about 1% to 2% penetration of that market. Has this changed your thinking about how much you can penetrate this oral contraception market and the potential upside opportunity there?

[Russell Barrans:]

Yes, absolutely, Annabel. And one of the things that we did early on because we wanted to make sure that we were appropriately placing ourselves into an expectation that match. But we did severely cut back the anticipation of the number we would get in that category from what our market research told us because our -- we really kind of thought our sweet spot was going to be there. And if you look at the commercial, we brought out in February, one of the things that we hit on was what we call Sophia and she is the woman who, again, represented that. And we have made a decision as we started launching for the first few months of launch, we came aware that there was, as we had always said and Saundra said, if you mentioned non-hormonal modern group of women in a social setting or even in a business environment, you'll have them go, tell me more. And what we started seeing was, that was sort of the response was, tell me more. So we started telling them more. And so that started down that road. Now the numbers that we came up with, to your point, were pleasantly surprising from the sense that we expected that. So we will continue to be exactly where we already set our course out to be, which is to make sure those women who are using hormonal methods of contraception understand that they don't have to, if that's not the right choice for them. we kind of think that that's probably going to continue to maintain or even grow the number that we present today, which is more than 1/3 of our users are switching. That makes this a much more attractive category to begin because as often as seen when you have an established category, people ask how many of those users are you going to move from that method to your method, it's a little easier to calculate because they're counted already among script data. And so we're going to be able to feel pretty confident that we know we're getting a good portion of ours, that already used these scripts to move over from one to another. And then as we supplement that with those 2, finally, I can come back into using something and give me the security and the peace of mind of knowing that I too now have an option for me.

[Annabel Samimy:]

Okay. Got it. And one last question, if I may. So you got an sNDA that you're planning for EVO100 at the end of the year. It is an sNDA, I guess. So does that mean that you solidified your strategy of how you're going to go forward with this product, is EVO100 is going to be an extension of Phexxi at this point? And what are the benefits, disadvantages of doing it that way?

[Saundra Pelletier:]

Yes. So yes, so it will be an sNDA. And again, the full enrollment will be complete at the end of this year. Our topline data will be in June of next year. And so when we really looked at it, we actually didn't find a huge advantage or disadvantage NDA versus sNDA. Because, frankly, when you look at adding on the chlamydia and gonorrhea indications, we were still going to have an opportunity to just grow a bigger piece of the market share. So when you look at the fact that there is still nothing indicated for these preventative indications and that they are the two most diagnosed and most prescribed STIs, the market opportunity is very clear, and unlike being in the contraceptive category, right, even though as a nonhormonal on-demand product, we see ourselves as having this unbelievable innovation. Yes, there are still other products. Although, we're converting a non-hormone category, to your last question, which we were going to target a 23 million women, and now we see we have a much bigger market opportunity. When you look at adding on these STI indications, it is a low-hanging fruit of epic proportion because there is nothing else. And so we're very excited that we're going to have a 6-month review. We're excited in all the research that we really anticipate our results to be comparable to our Phase IIb. And so yes, the short answer is, is that we feel good about the sNDA. We think we're going to be able to grow that additional share. And Russ, do you want to talk about the strategy for that positioning?

[Russell Barrans:]

Yes. Well, the key thing is really among the payers one of the nice things about having this as an sNDA is we do end up having what -- if I can use a sports analogy on you have 2 shots on goal. And that we have our first one with Phexxi around ACA. And then when we bring that next one in, again, the ACA also outlines that in respect to preventative care for sexually transmitted infections that it should be a covered benefit. So we see this as, if you will, sort of 2 shots on goal, 2 reasons for payers to really have to make sure that they can cover this because a woman who is sexually active needs to be protected from STI, no matter who she is. And if she's using a -- what protects her from STI, also to give her the protection of pregnancy. So we really think that this gives us, if you will, that I can use that terminology with 2 shots on goal, whereas other products really just are really limited to the one NDA that they have. This will be a really tremendous advantage for us.

[Operator:]

Our next question comes from David Amsellem with Piper Sandler.

[David Amsellem:]

So I just have a few. So first, can you talk about or just remind us what the gross to net would be in this scenario where you do get your own contraceptive category per the ACA mandate. And then to the extent that you don't get it, what would the gross to net look like, steady state? I don't know if you can comment on that. And then secondly, and I apologize if I missed this, what portion of covered lives, as of now, are covered at 0 copay. And then lastly, in terms of the expansion into STI prevention, can you talk about the expansion of direct-to-consumer and spend surrounding that if not in a quantifiable sense at least qualitatively what that would look like with that on board?

[Saundra Pelletier:]

Yes. So Jay, do you want to start with first gross to net, and then we can speak about copay.

[Justin File:]

I think Russ can move with the second part of the question.

[Russell Barrans:]

Yes. So on our gross to net, again, we don't want to be so specific that we're held to something when we know that we got to do that later on. But when you start looking at other brands that have been covered under ACA, you end up with a 78% net in the -- and it can even climb up into the 90s just depending on all the other factors that you have to take into that. So when Saundra talks about the fact that once ACA comes in, those people who are on the co-pay card, maybe, right now, are a heavy weight, if you will, they're costing us a lot. They usually go from where you don't make a whole lot off of each person to jump right up in that 70% range and then continue to climb as you refine your cost of goods and so on. So we think that, that, again, that strategy makes a lot of sense, and we would expect us to jump into that range on that and having had other products in the past and looking at those, that's a pretty consistent number, just depending on where your cost of goods would might lie. And then when we started looking at the portion of lives that are currently covered at 0, it's running around the 8% to 10% range that come in at 0. And so again, that -- we see that as a big bonus just for the simple fact that tears the number of payers that have already recognized, we should be one of those covered benefits. But even among those who require us to be either in a non-preferred position, but still on the covered benefit, we're not seeing copays in those respects that are exceeding, typically, maybe $75 or so, and then we make sure that, that buy down allows a woman to get it at a rate that does not affect your out-of-pocket. And then the result is our gross to net with those are still really pretty healthy at this point. So we do have strategies in place to come and approach that should ACA not be put into place, which we would assure we have our best contracts available. Just as a reminder, we talked about this before. We have chosen not to contract with PBMs that give them outrageous requests from their rebate side of that. As we grow business, we get into in a much better position to negotiate that. So we'll be in a position after -- at some point, should we not get ACA to get a much more favorable rebate than they wanted to give us when we had no business at all. And then we'll warn ourselves around that to make sure that we're in the right position. Those are things we've got already in the books in the sense of saying we're going to -- we've got a strategy if it doesn't come through. We won't be stuck flat-footed. But we really do believe, as Saundra said, that we're on path to get the ACA and all of this will turn into a really nice gross to net.

[Saundra Pelletier:]

And before Russ touches on the DTC question, David, I just want to put one more final point on this is that -- and just for the people who are listening that might not have done the review on ACA and what the situation is, look, in 2010, Affordable Care Act established this contraceptive chart with 18 categories. And any product that came to market doesn't fill the 18 categories. But what happened is that the chart did not move forward with evolution, with change. So new products have been introduced to market that they haven't been put on the list. The difference for Phexxi is that we aren't one of those new products that already has a generic. Many of the new products that came to market had generic rings and generic patches. Phexxi really is the innovation that we state because it is the only vaginal pH modulator, the only product with no hormone, that is used on demand. And the reason our confidence level is high is that the vulnerable population, 800,000 cancer patients for just this year alone, diabetic patients, patients with a high BMI, smokers, all the patients that are clinically contraindicated for hormones, they are left wanting because the majority of them will not use the only other product, which is a copper IUD, which has its own very serious side effect issues. And so the push is that this vulnerable population is being denied, it's just -- not only is it not right. But the fact that there is an FDA-approved asset that was approved in May of last year, and there's still a population that literally has been told, well, too bad for you. So the dual we're pushing on isn't just inside. We've been given direct feedback from the agency in the office to say, we agree. These women deserve an option. You have clearly brought that only options to the table. And so that's why we feel really confident that this is going to happen. I do appreciate that we have contingency plans, but I just wanted to point out for everybody that our confidence isn't just because, we like Phexxi. It's because there's a subset of women that should not be denied ethically from the only product that they can use if they're trying to manage their fertilities. So then the DTC question, David, could you just state it again one more time, you want to know -- I'm sorry, the investment or...

[David Amsellem:]

Yes, sure. Sure. What I'm just asking is the extent to which you're going to expand DTC with STI prevention in the label, and I don't know if you can talk about it quantitatively, but just -- even just qualitatively, what's the extent to which you're going to expand your DTC efforts to the extent you have STI production in the label?

[Russell Barrans:]

Yes. So David, that's -- we have -- I think what you call the perfect timing from the sense of saying, when we get approved for STI, we will be at a stage when the DTC for contraception would have biased nature started to drop down and spend because our awareness is now high enough and we don't have to keep that same level of spend. And it will really be, if you will, sort of it transfers over then so that we don't have to increase our DTC spend in order to go out and make the STI brand or approval aware to consumers. So it will really be at the perfect timing as we're seeing our need to talk about contraception go down. It will then increase when we talk about STI. But the other side of that coin is, and it should -- and again, I'm projecting into the future, it should be less for the simple fact, though we no longer have to educate the masses on what is Phexxi, what is this non-hormonal vaginal pH modulator that you've got. They will be aware that to a much higher degree. So it takes much less effort in order to say and then not only in contraception, but also in STI. And so it'll bring those 2 together in a nice way. So we would anticipate that when it comes on board, our DTC spend does not actually go up, but will continue to drop down, but not at the same rate if there was only one indication.

[Operator:]

Our next question comes from Jeff Hung with Morgan Stanley.

[Jeff Hung:]

For the sample program that you started in May, what kind of feedback are you hearing from physicians and your sales reps on the samples translating to more scripts being filled? And is there a way that you can actually tease out the additional contribution from the samples?

[Saundra Pelletier:]

Yes. I mean I'll have Russ jump in more, but the one thing that has been very important is our consistent and ongoing training of our sales force. So you heard us say that when we talk about as Terra as a medical necessity forms, our call point 1 is Phexxi, our call point 2 is Terra . I mean our reps are constantly trained. And my point in saying that is that, the reps go in with an absolute expectation that the doctors only get a sample if it is associated with the prescription period. This isn't, let's try different flavors of ice cream in the grocery store. This is serious and these samples are going to be given with the expectation that prescriptions follows. Now -- and I mean that, like, you have to understand, too, that there's not a lot of companies. There's a lot of companies that told their sales force to stay home during COVID, literally stay home. Well, we weren't one of them, I can assure you. And so being one of the very few companies that are still in those offices, the reps are going in and not in a too aggressive way, but in an appropriate way to expect that the prescriptions go in, and it's really working. We're giving them different messages and different styles with personality type, but I would tell you the effectiveness of the prescription selling hand-in-hand with the samples has been very, very encouraging. And I don't know if Russ if you wanted to...

[Russell Barrans:]

The only thing I'll say is that we did launch the sample program in May. So we only had about half of the quarter of which there were actually samples in the field. So it's been a little bit too early to say we think that, that's resulting in a certain number of scripts being filled. What we can say and just to add to Saundra's comments is, and this is a little bit more anecdotal. But I've been out in doctors' offices talking to them and talking about how the samples fit. And I've got to tell you that almost without exception, I'm thanked by them that they have that because at this point in time, there are really only one other contraception in their cover that has a sample to offer to women. So they really appreciated that we came up with this for them. And quite honestly, many of them never actually physically have seen a unit outside of the pictures and this allowed them to start touching, feeling and handling. So it's been a really tremendous response on that. And we would anticipate as we watch this over the next quarter that we're going to see this definitely translate into a great return on our investment.

[Saundra Pelletier:]

And you know what, Jeff, the final note is that our samples too, just so everybody knows, they aren't actually given out by the rest. So the doctors order them on the iPad and then they get shipped, the rep gets a notice. So it's a second opportunity for the reps to go into the office, to verify the samples came, is everything good. So it's just yet another opportunity for them to have an additional call with the doctor. The reps don't have to have storage facilities. They don't have to count inventory, none of that extra spends or time. It just goes right to the doctor's office.

[Jeff Hung:]

And then back in March, you indicated that it would take about 5 to 7 months to get a better sense of the real refill rate. Can you talk about what you're seeing? Or when do you think that you would have a better sense of the refill rate?

[Russell Barrans:]

We are seeing what we would say, it looks like the trend is up, as we're looking at 2 things that IQVIA is turning into us and showing us. One is that those refill rates are going up, not at a rate that you would typically expect, a monthly method where you can start tracking it month over month. So -- but we never anticipated that would be the case. But the other thing that we're seeing is that -- and we talked about this, the units that are dispensed and now are starting to increase at a rate that's a little bit higher than what you would say the prescription that's going out there, indicating that a lot of physicians are now starting to say rather than making a prescription in box of 12, they are making a prescription of 2 boxes of 12. That in itself, again, extends the length of time that's going to happen between that original and initial script and the refill. So we're doing two things, Jeff, one is trying to get a handle on it with IQVIA to be able to track this in a way that allows us to really quantify where and how these are going out. And the second part is recognizing that with the great number of women who actually started using our product in March, as you said, and since March, you need any 4, 5 or 6 months to get to a feeling of where that's going to fall out respective to each person. Remember, we did our market research, we projected 6 to 7 fills in a year. But again, that was off of a category that's brand new. So we were assuming, based on what we heard from of women and physicians in our market research, how frequently they would use it and we watched our utilization during the clinical trial. We think we're pretty close to that number, but we'll probably need to have, again, a few months out from that time where really we started with the bolus of our users in March.

[Jeff Hung:]

All right. And if I can ask one last question. For the upcoming marketing campaign that you're starting next month, what would you want to see to consider the campaign success? And how quickly can you see the impact? And how long do you think it would take to translate to greater numbers of scripts and sales? Just how should we be thinking about that?

[Saundra Pelletier:]

Yes. So the campaign that's kicking off in September, we would say, conservatively, if you look at other endorsements and other campaigns, so this is a year campaign, and it really is multilevel. And so I would say that, conservatively, we are saying that we expect a 25% lift on the campaign conservatively. Now we're launching in September. I would tell you that by the data that we are going to get by the end of October, early November, that's when we anticipate we would see that kind of a movement. And again, that's really looking at -- look, the tough part is with all the other parameters in this moment in time in the country are things going to maintain the way they are now. And so we're thinking end of October, beginning of November, we'll see the positive push from the campaign kicking off in September.

[Russell Barrans:]

Right. To give a more, I guess, financial fine tune to that is keeping in mind delays we have in scripts and then -- and so we would expect to start seeing with the first 4 to 6 weeks, some of that take off. The one thing I will say, Jeff, is that when we did this in February, we saw a pretty quick response within a few weeks when had virtually 4% awareness before the campaign kicked off, as we see triple or even 4x higher awareness than we entered into this campaign. We would anticipate that the response will be a fairly quick and keep moving. I'm not going to be quite as great as Saundra, although, I'm very, very bullish on the fact that if you look back at the trends you saw happen in the first few weeks post the DTC campaign in February, I think we can expect that and more as we move into this new campaign because it's just the quality of the message that will go out with a familiar voice and a higher awareness to start with.

[Saundra Pelletier:]

Well, I also to, Jeff, just to add more thing. I do think the thing that all of us internally find very refreshing about this campaign is that it really does speak to the fact that women don't have sex every day. And if they're not feeling as soon as they should and they really want a healthier choice and they want to manage their fertility, taking control of that with Phexxi is an opportunity for them to feel good, for them to have a good quality of life, for them to not have to worry about visible or invisible side effects that are occurring and should they decide they want to get pregnant. Once you start taking Phexxi, it's out of your system. You can get pregnant tomorrow if you choose to. There is no flesh-out period. if you are breast-feeding, you don't want to have hormones in your breast milk. If you're walking your dog, right, your child on the cycle, do you really need contraception? No, you don't. So the great thing about the campaign is that it really speaks to the real world practicality and what's really going on with women's lives, and I think you're also going to find the messaging. Although, yes, it's a little humorous, but really the intention is to talking about meeting women where they are and really talking about the real things that women bear. That's the dirty little secret about the side effects that really happen that no one talks about. And I just want to say, just because something has been done one way, it doesn't make it right, and for too long women have been asked to suck it up and to be quiet and to be moderate and just suffer through it. And Phexxi now allows them to say, I'm not going to do that anymore. And so this campaign, I think, is going to appeal to a variety of different women in a very meaningful way. And so we're excited about it. And so, yes, we really believe that women are going to leave looking at some of these messages saying, you know what, I have a better option.

[Operator:]

Thank you. That concludes the question-and-answer period. I will now turn back the call back to Saundra Pelletier for closing remarks.

[Saundra Pelletier:]

Well, thank you, everybody, for joining us today. We really appreciate it. We appreciate your ongoing support. We have a lot of levers that we are going to continue to execute on. We look forward to sharing more with you at the September Equity Conferences and on our Q3 Call in November. So have a great rest of your day, and thank you again for your time.

[Operator:]

This concludes today's conference call. Thank you for participating. You may now disconnect.