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TherapeuticsMD Inc (NASDAQ:TXMD)
Q2 2019 Earnings Call
Aug 6, 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's Second Quarter 2019 Financial Results Conference Call. [Operator Instructions]

I would now like to turn the call over to TherapeuticsMD, Vice President and Investor Relations, Nichol Ochsner, Nichol.

Nichol Ochsner -- Vice President, Investor Relations

Good afternoon, everyone. Thank you for joining today's call to discuss our second quarter financial results and business update. This afternoon, TherapeuticsMD issued a press release announcing our second 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 today's conference call may contain forward-looking statements. Such forward-looking statements are based upon current expectations, and there can be no assurance that the 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 and our annual, quarterly and other reports filed with SEC. These forward-looking statements are based on information available to TherapeuticsMD today, and the company assumes no obligation to update statements as circumstances change. An audio recording and webcast replay for today's conference call will also be available online 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 on August 6, 2019.

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

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

Thanks Nichol. Good afternoon, everyone, and thank you for joining today's call. We are pleased to report a solid quarter. As you can see on Slide 3, total net revenue for the second quarter of this year came in at approximately $6.1 million above our guidance range of $4.5 million to $5.5 million.

Net revenue for IMVEXXY came in at approximately $3.12 million above our financial guidance range of $2.5 million to $3 million. IMVEXXY net revenue was up 55% in the second quarter as compared to the previous quarter of this year. We launched BIJUVA on April 17, and recorded approximately $134,000 in BIJUVA net revenue for the partial quarter. Combined our FDA approved drugs came in at approximately $3.25 million in net revenue for the quarter.

Moving to prenatal vitamins, net revenue came in at approximately $2.8 million for the second quarter above our financial guidance in the range of $2 million to $2.5 million. Dan will review the financial results in more detail later in the presentation.

I would now like to turn the call over to Dawn Halkuff, our Chief Commercial Officer to discuss performance in more detail. Dawn?

Dawn Halkuff -- Chief Commercial Officer

Thank you, Rob. Let's start with our progress on IMVEXXY on Slide 4. IMVEXXY growth continues with approximately 289,500 total prescriptions dispensed since launch through July 31, 2019. Total prescriptions for the month of July were approximately 45,500, which is an increase of 21% or 8000 units over the month of June. This is a good start to the quarter given summer months are historically slower months for pharmaceuticals. We also continue to gain strength with average weekly volume crossing over 10,000 for the month of July.

Slide 5 shows that IMVEXXY continues to trend with the Vagifem launch curve, which launched in 2000, a much less restrictive time for pharmaceutical launches. We also continue to outperform other more recent launches in the category. This volume translated to a market share in June of 9%. To provide some perspective on the strength of our launch trajectory, we not only continue to outpace the more recent launches in the category of Osphena and Intrarosa, we are now outpacing them in real time with our volume more than approximately doubling each of those products in the month of June.

So what is achieving volume and share in the VVA market worth. To understand this, let's turn to Slide 6. Despite multiple generics entering the VVA market, in 2018, the market generated more than $1.7 billion in gross revenue. As a reminder, this revenue is with only 7% of the market being treated. This is a marketplace which holds significant potential for IMVEXXY.

Now moving to Slide 7. Along with unit volume, we continue to see growth and strength in our refill rate. IMVEXXY continues to demonstrate strong patient adherence. Women are trying IMVEXXY and staying on IMVEXXY. In the first year, we are seeing an average of over 3.7 fills per patient. In fact, for those women that started one year ago, they have averaged 7.8 fills out of a possible 13. For comparison, Vagifem had an average of 1.7 fills in their first year of launch, and as the product matured, topped out at an average of 3.5 fills per year. Vaginal Creams topped out at an average of 1.5 fills per year.

Let's turn to Slide 8. To tie it all together on the potential for IMVEXXY in the marketplace based on key financial variables of number of fills per year, average net revenue per unit and market share achievement. If you look at the left hand side of the slide, you can see in purple circles the difference between four fills, five fills or six fills per year. Moving to the right in blue, you can see two net revenue per unit estimates, and then further to the right, different market share percentages IMVEXXY may achieve over the next few years. In our first year, we have already taken 9% market share, and assuming that we achieve 35% market penetration at an average net revenue per unit of $100, we would achieve a $322 million business at four fills per year. If you look at the next chart down with five fills per year with the same percent market share and $100 net per unit, the value of each additional fill per year is worth $80 million, bringing the total opportunity to $402 million. The refill lever is a key focus and one we are already well on our way toward optimizing.

Now, how do we get to that peak opportunity. Increasing payer coverage is fundamental to that achievement. Turning to Slide 9 on the commercial front, we have seven top payers adjudicating for IMVEXXY. There was no change in top payer coverage during the second quarter period. We expect coverage determination from CVS and Aetna during the third quarter. In addition, we are now in discussions with Kaiser.

Moving to Medicare Part D on Slide 10. The top six plans account for approximately 78% of all Part D pharmacy lives. As mentioned last quarter, IMVEXXY has preferred status with United. We have submitted preferred bids for the other four Medicare Part D large payers. Since copay card cannot be used with Part D, if contracts are accepted at preferred, this would ensure a similar copay range of approximately $40. We expect remaining coverage decision in the third and fourth quarter timeframe for the 2020 coverage cycle with adjudication to start on or before January 1st.

Let's turn to adjudication rates for IMVEXXY by payer type on Slide 11. Chart 1 shows for the second quarter of '19, our overall adjudication rate for IMVEXXY increased from 27% in the first quarter to 34% in the second quarter with no additional top payers. Overall adjudication progress is impacted by the IMVEXXY Medicare population. The area with the lowest coverage to date being overweight versus the category. Moving forward to chart two, by securing our last few top commercial payers, and most importantly, securing Part D payers in the third and fourth quarter of this year with adjudication to begin on or before January 1st, we expect to see adjudication improve to approximately 70% plus once coverage has been fully established.

So what's next for IMVEXXY. Turning to Slide 12, as we look forward to the remainder of 2019, we have several events that we believe will support our violent [Ph] volume growth as well as improve our net revenue per prescription. As mentioned in the third quarter, we expect to have commercial coverage determination from the remainder of the top commercial payers, and in the third and fourth quarters we expect to have coverage determinations from the remainder of the top Medicare Part D plan. We have also just launched direct-to-consumer marketing for IMVEXXY, an important milestone to drive IMVEXXY share and potential category growth.

In the fourth quarter, we will be highlighted as the premier sponsor of the North American Menopause Society, with publication supporting both BIJUVA and IMVEXXY. Also in the fourth quarter, we plan to begin optimization to our copay card program, as by that time, we anticipate we will have secured the majority of commercial coverage. These are just some of the initiatives we continue to focus on as we look to optimize top line and bottom line growth.

Let's move on to BIJUVA. Slide 14 outlines our launch pathway for BIJUVA, which started on April 17. During the second quarter, the sales force main focus was on IMVEXXY as we continue to build payer coverage for BIJUVA. For the initial phase of our launch, each sales representative was directed to focus on approximately 10 prescribers per territory for BIJUVA. In addition, once BIJUVA payer coverage has been established in the fourth quarter, we plan to further introduce BIJUVA into the compounding channel through our Bio-Ignite partnership.

Moving on to metrics on Slide 15. Prescriptions for BIJUVA total approximately 8,900 since launch. Through July 31, approximately 2,300 prescribers have written a prescription for BIJUVA, reaching a total of approximately 4,700 patients.

Now let's turn to Slide 16 for payer coverage for BIJUVA. As a reminder BIJUVA is a much quicker payer process than IMVEXXY due to the younger patient population and therefore smaller Part D population. We are happy to announce United Health Care and OptumRx began to adjudicate for BIJUVA on August 1. That brings our total to four of the top commercial payers now adjudicating for BIJUVA in our first quarter of launch. We are in discussions with the remaining top commercial payers and expect each payer listed on the slide will make the coverage decisions by the end of the fourth quarter of 2019.

Let's turn to adjudication rates for BIJUVA by payer type on Slide 17. For the second quarter of '19, our overall adjudication rate for BIJUVA was 34%, up from 25% in May of '19. You can see that our adjudication rate is moving up more quickly with BIJUVA than IMVEXXY, given the majority of patients are commercial. As a reminder, we expect all payer coverage decisions in the fourth quarter of this year. We expect to see adjudication improve to approximately 70% once coverage has been fully established.

Let's move to Slide 18 to discuss our Bio-Ignite program to partner with the community based compounding pharmacies to access the 12 million to 18 million annual compounded prescription in the E plus T market. Bio-Ignite continues to be a critical part of our launch pathway for BIJUVA, given the volume of prescriptions in the channel as well as the trust established between the pharmacist and the women they support. We've launched the Bio-Ignite model with IMVEXXY and now have national reach with 74 accounts live, 129 in the contracting process and 52 in the vetting stage. In addition to increasing our distribution, we are seeing strong refill rates in Bio-Ignite that match or exceed 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.

Slide 19 shows the potential of BIJUVA in net revenue. In a similar fashion to the IMVEXXY slide, you can see the net revenue per unit estimates on the left hand side of the slide, and the net revenue potential at different market share percentages, as you move to the right. We calculated the net revenue estimates using a market size definition of only the FDA approved separate estradiol and progesterone doses of 3.9 million scripts, plus the low end of the estimated compounding market of 12 million scripts. As you can see, the range of peak values that BIJUVA can achieve by offering a best in class product with proven efficacy, safety and convenience when compared to off label use of FDA approved products or unapproved compounding products is significant.

Turn to Slide 20 for what's next for BIJUVA. We expect to complete the commercial coverage cycle in the fourth quarter of this year. We will also be highlighting BIJUVA data at the North American Menopause Society, and importantly, plan to expand the Bio-Ignite program. Like with IMVEXXY, in the fourth quarter, we expect to begin to optimize our copay card program when commercial coverage accelerates and anticipate beginning direct to consumer in the first half of 2020.

Let's move to Slide 21 with ANNOVERA. Moving to Slide 22. ANNOVERA is an exciting innovation in the birth control category and overall for women's health. I am proud to announce that last month, the Galien Foundation announced ANNOVERA among the 2019 annual Prix Galien USA Award nominees in the best pharmaceutical product category. We believe this nomination underscores the progress that ANNOVERA represents for women seeking choice in managing their fertility.

We have highlighted several of the previous award winners across a variety of specialties. Across the board, it is clear that we are in good company and that the innovation delivered by some of these past nominees and winners has translated to significant opportunities in their respective categories.

Turning to the value of the contraceptive category on Slide 23. This slide shows the value of the contraceptive market, which is the largest FDA approved category in women's health valued at $5 billion. With ANNOVERA for the first time, a woman can choose to have a long term product and also choose to change her mind without the need to have an invasive procedure.

Moving to our launch approach and potential catalysts for ANNOVERA turn to Slide 24. We have set the WAC price for ANNOVERA at $2000 per unit aligned with our responsible pricing strategy and at a slight discount to NuvaRing on an annual basis. I am pleased to announce a key milestone for ANNOVERA. Our initial production batch is in the packaging stage, keeping us on track for our prelaunch activities. We have started our prelaunch activities, including discussions with the FDA on the potential for ANNOVERA to be designated a new 19th method of contraception and have started discussions with payers. In only a few short weeks since we have announced our price, as you can see on the slide, multiple payers have added up to their formularies, including two of the most well-known in Massachusetts. Harvard Pilgrim and Blue Cross Blue Shield of Massachusetts.

Starting in the fourth quarter, we will begin to test and learn market introduction, ramp manufacturing with up to 10,000 units available by year end, and will commence the official national launch in the first quarter of 2020. At full launch, our initial focus will be on prescriber targets that overlap with our Menopause products as well as ramp up direct to consumer communication, given the influence of the patient in this category.

Slide 25 outlines the large market opportunity for ANNOVERA, which is significant even if we only achieve a small portion of the addressable birth control market. On the left hand side of the chart, our different net revenue per unit achievements, and moving to the right, different market share ANNOVERA could achieve in the future. The chart -- top chart outlines the percent of the overall market for birth control. As you can see, if we achieve only a 1.5% of the 28 million annual new prescriptions for the overall market for birth control, it would be a $420 million to $735 million opportunity depending on the net revenue per unit. The bottom chart shows potential value of net revenue, if we take the illustrative percentage of NuvaRing new prescriptions sales. We will present more information about ANNOVERA at the American Society for Reproductive Medicine being held in mid-October.

Let me now turn the call over to our Chief Financial Officer, Dan Cartwright, to review our second quarter financial results in more detail.

Dan Cartwright -- Chief Financial Officer

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

Please turn to Slide 27. As Rob mentioned, net revenue from IMVEXXY was approximately $3.1 million for the quarter. The average WAC sales price of approximately $213.30 for the second quarter. The difference between WAC and net revenue is mostly driven by the cost of our copay assistance programs. Once we have completed our payer contracting, we believe our IMVEXXY scripts will generate higher revenues per unit and drive significant net revenue acceleration.

We launched BIJUVA during the second quarter of this year. During our first partial quarter of commercialization, BIJUVA net revenue was approximately $134,000 . Our total FDA approved product revenue for the second quarter was approximately $3.25 million coming in above our second quarter 2019 financial guidance of $2.5 million to $3 million. Net revenue from the company's prescription prenatal vitamins business was approximately $2.8 million for the second quarter of 2019 coming in above our second quarter 2019 guidance up $2 million to $2.5 million. Total revenues for the second quarter of 2019 were approximately $6.1 million coming in above our second quarter 2019 financial guidance of $4.5 million to $5.5 million.

Total operating expenses for the second quarter of 2019 increased compared to second quarter of 2018. These changes primarily reflect a commercialization -- an increase in commercialization expenses for the launch of IMVEXXY and BIJUVA. This has reflected in SG&A expenses for the second quarter of 2019, which were approximately $41.4 million compared with approximately $29.5 million for the prior year's quarter. This is primarily due to higher sales, marketing and personnel cost to support commercialization, including the expansion of our women's health salesforce to support the launch of BIJUVA.

In the second quarter, non-operating expenses included a onetime charge for extinguishment of debt of approximately $10.1 million, as we refinanced our previous term loan into a more favorable facility with TPG Sixth Street Partners. Turning to the bottom line, our net loss for the second quarter of 2019 was approximately $55.2 million or $0.20 per basic and diluted share. Excluding the onetime charge for extinguishment of debt, the net loss for the second quarter was approximately $45 million or $0.19 per basic and diluted share compared with approximately $33.2 million or $0.15 per basic and diluted share for the second quarter of 2018.

As we move to Slide 28, we finished the second quarter of 2019 with approximately $183 million in cash compared with approximately $161.6 million at December 31, 2018. Our company has taken significant steps this year to raise additional non-dilutive capital to support the commercialization of our three FDA approved products. In April, we closed on an upsized $300 million non-dilutive term loan facility with TPG Sixth Street Partners.

The initial funding was $200 million with additional funding available of $50 million upon the designation of ANNOVERA as a new category of contraception by the FDA on/or prior to December 31, 2019 as well as another $50 million upon achieving $11 million in net revenue from IMVEXXY, ANNOVERA and BIJUVA for the fourth quarter of 2019. I would like to clarify a common question that these are draw triggers and not covenants. Our loan facility provides us with a favorable amortization profile with no repayment of principal scheduled until June 30, 2023.

In July, we closed our ex-US license deal with Theramex, and yesterday, we received the upfront payment of $15.5 million. We also -- we are also eligible to receive additional regulatory and sales milestone payments as well as a royalty on net sales. Combining these two debt tranches and the upfront payment received from Theramex, TherapeuticsMD will have the potential to access over 115 million of non-dilutive capital over the coming eight months.

Please turn to Slide 29 for our revised quarterly guidance. We are pleased with our net revenue results for the quarter, and as Rob stated, we have reiterated our quarterly guidance for our FDA approved products and raised our third quarter guidance for the vitamin business to a range of $2.25 million to $2.5 million. Our guidance for total TXMD net revenue for the third quarter will increase to $6.75 million to $9 million range. For the fourth quarter of 2019, we reiterated our previous stated financial guidance for our FDA approved products and raised our guidance for the vitamins business to a range of $1.75 million to $2.25 million. Our guidance for total TXMD revenue for the fourth quarter will move to $2.75 million to $15.25 million.

Slide 30 outlines the impact on full year 2019 guidance. Given our second quarter beat, we revised our year-end financial guidance for FDA approved products to range of $20.75 million to $24.75 million. Moving to full year guidance for our prenatal vitamins business, we are increasing our range to $8.75 million to $9.45 million. Our guidance for total TXMD net revenue for the full year will move to $29.45 million to $34.2 million. This represents a net revenue increase of $1.7 million based on the revised guidance midpoint versus our previous guidance for the full year.

I would like to now turn the call back over to Rob for closing remarks.

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

Thanks, Dan. On Slide 31, in closing, we're pleased with our quarterly results. This progress confirms our Menopausal strategy is clearly working and execution has produced a solid market share adoption. At this point, we are confident that the payer contracting process will come to a positive completion for both Menopausal products in Q3 and Q4 of 2019. ANNOVERA is on-time and will contribute revenue in Q4 positioning us with three revenue producing products to meet our guidance and allow us to access another $50 million. This will also give us the time needed to discuss the 19th category with the FDA.

And then turning to Slide 32 for an illustration of the overall opportunity, the value of this company is based on three FDA approved products. As you can see, when you look at the sum of the parts, there are multiple paths to get to a potential billion dollars of peak sales. In the next 60 days, TXMD will have transformed to a three product company and be well on its way to being the new leader in women's healthcare.

With that, I'd like to turn the call back over to the operator for Q&A.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from the line of Louise Chen with Cantor Fitzgerald. Your line is now open.

Louise Chen -- Cantor Fitzgerald -- Analyst

Hi. Congratulations on the quarter and thanks for taking my questions here. So my first question is regarding the designation for ANNOVERA. When do you expect to hear regarding this? And then second question is, are you covered by CVS for IMVEXXY on the commercial side? And then last question some people ask us is on the potential launch of generic NuvaRing, and if that will impact your launch of ANNOVERA in any way? Thank you.

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

So, Louise, it's Rob. I'm going to tie together one and three, and Dawn if you have anything to add, please jump in. So with the 19th category, the process is as follows. So we already have started the dialogue with the FDA. There is currently 18 methods of contraception and there they are separated by various reasons to be different methods. Let me give you an example, a 30-day supply of birth control pills is one method, oral contraceptives, a 90-day supply of birth control pills that maybe even have the same progestin is considered a different method of contraception. So we believe and that given ANNOVERA is a 13 cycle long acting ring versus the only other ring out in the market, which is a three-week ring, NuvaRing it clearly, under the precedent and number of different ways constitutes a separate category. And -- so we think the process that we are undertaking should be very positive, and the process is as follows. So the Office of Women's Health runs this at the FDA, once they make a determination, assuming they designated the 19th category, they -- all they have to do is literally change it on their website and all of the payers nationally would have to follow it. As you know, 19 states will have to cover this product, and as you can see, payers for the first time, I mean, we just listed it and are covering it in a number of states. We had a number of the big guys reach out to us as well. So we're very bullish on this product. We do not see the NuvaRing generic, since it is a different -- not only different progestin, it's a different cycle. This is a long acting birth control product, NuvaRing is a short acting product, there's a different ingredient in it. And as you know, the market is going at long acting. We don't see the NuvaRing generic having any impact on this product whatsoever. It certainly would not ever be generic equivalent.

As far as CVS goes, and Dawn I'll ask you if have any other comments on that. As far as, CVS goes, we expect to hear from them this quarter. We're very bullish on it. I can't guarantee that we'll get it, but CVS net-net one, but we're very positive on it, and we hope for the best.

Dawn Halkuff -- Chief Commercial Officer

Nothing to add.

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

Okay. Did I answer your questions.

Louise Chen -- Cantor Fitzgerald -- Analyst

Yeah. Thank you very much,

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

Thanks, Louise.

Operator

Thank you. Our next question comes from the line of Annabel Samimy with Stifel. Your line is now open.

Annabel Samimy -- Stifel -- Analyst

Hi. Thanks for taking my question, and great progress there. Just on IMVEXXY regardless of CVS. Do you expect to see some pretty meaningful step ups in the adjudication, given that I think we're at a point now that we're past some of these six month blocks and these payers should start processing the claims already. Then separately affecting, I guess, the net price. Have you seen any change in the mix of starter versus maintenance packs facing more new stars or are you seeing switches?

Then separately on BIJUVA. Where are you seeing most prescriptions coming from at this point? Are you still seeing -- are you seeing it from off label use of the separate E plus T? Or from compounded or synthetic products? And then on ANNOVERA, I just want to understand the process here. I guess aside from your classification, I think you mentioned that you had a number of states that would have to cover it regardless. And I just want to -- we only -- I guess I didn't quickly count how many we're covering there, but is this an automatic pick up by a number of these states and these plans and if you can just help us understand the process there?

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

Absolutely, so Annabel, I'm going to.

Annabel Samimy -- Stifel -- Analyst

[Indecipherable] sorry.

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

No worries. We took -- I'm going to turn it over to Dawn for ANNOVERA. I'll take IMVEXXY and BIJUVA. So, yes, we do expect continued step up of adjudication in Q3 this quarter and next quarter. So we are -- we have three basic payers left on the commercial side. So CVS and Aetna cut them as one or two. We expect to hear from them. We're bullish on it. We can't guarantee it. They could say no, but we're positive on it this quarter. We just opened dialogues with Kaiser. As you know, Kaiser is a closed system without access. Even though they cover in Part D, they don't cover commercially and we've had some good progress there.

On the Part D side, we actually expect a couple of decisions here in Q3. The rest will be in Q4. And again, we're bullish. We think we'll get most. We might not get every single one, but I think we'll get most. And I think you guys can hang your hat on that. We have enough color there. In addition to that, as far as BIJUVA goes with the payers, we will be done with all of the commercial payers, as you can see, there's almost no Part D impact here. As you can see via our adjudication stats in early Q4. So we will have a number of BIJUVA commercial decisions. We just got Optum and United, which is huge. And we'll get in Q3 another three or so, and I believe the last two or three will come in October. And we will be done with the payer process in Q4 for BIJUVA and off to the races with full reimbursement. Again, I think we'll get most. I don't know if we'll get all, but I think our shareholders will be proud is what I expect for the commercial and Part D coverage for both of these drugs. As far as where the prescriptions come from for BIJUVA, we have only gone after the two fill market and we've only allowed our sales reps up to Q3 to only call on 10 doctors per territory, OK. There is a reason there, the reason is, we only have until we got United and Optum very recently, the first of this month, we only had 17% coverage in that market. So to go into the Bio-Ignite channel and have the additional distribution expense will eat up all of your revenue and eat into IMVEXXY revenue. So we're holding off on that till Q4 until we have solid coverage. But with that being said, they're only going after 10 doctors per territory and only after the two fill FDA approved market. And in fact, if you look at our adjudication for BIJUVA, it's actually 34%, even though, we only had 17% coverage. So it's just a situation where you happen to have more of the population that you're covered with, getting these prescriptions coincidentally. So obviously, both IMVEXXY and BIJUVA will even out that 70% plus in both Part D and commercial. And again, in the next five months that will be completed.

Dawn Halkuff -- Chief Commercial Officer

Okay, and just moving on to Ann -- one more point on BIJUVA that I think it's important is that 82% of the prescriptions are from riders, sorry 83% of the riders are also IMVEXXY riders. And so much of the overlap is playing out for us on where we're getting that volume. So the last question you had was on ANNOVERA and how the...

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

Starter versus main.

Dawn Halkuff -- Chief Commercial Officer

Ann, can you repeat the question on starter versus maintenance?

Annabel Samimy -- Stifel -- Analyst

There was -- I did have a question regarding whether you're saying more starter patients or new patients rather than just the switches that would push you to the maintenance pack and how that might affect the net price over time?

Dawn Halkuff -- Chief Commercial Officer

Yeah, so Annabel, because our refills are so strong, we obviously see a lot more of the maintenance than we see of the starter. I think we continue to see through the market share that we are getting some switches from some of the creams and others, and I think we showed some of that data on the market share at Investor Day. But again, the majority of our mix will be the maintenance pack given the amount of refills that we have.

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

And as the payers finish their cycle. The labels has to start with a starter pack even if it's coming from another product. We'll have the reps really push that and hopefully up that amount from starters and it's just a normal cycle until you get coverage. The discount you gave to the channel is a raw percentage. So you're giving, in essence, losing money on a starter pack whereas if there's no coverage or you're making a little bit of money, and if there's coverage, you're making good money. Okay.

Annabel Samimy -- Stifel -- Analyst

Got it. Okay

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

So that'll transition as we go forward here in Q3, Q4.

Dawn Halkuff -- Chief Commercial Officer

So on -- moving on to your question on ANNOVERA, how the process works for the 19 states and the automatic. I think what you're seeing thus far is that there have been some automatic ads on some of the payers that we showed putting us on formulary immediately. The way it works, though, is that there is, at the state level, there's regulation that they do have to cover us. Some states with a copay, some states without a copay automatically. But that doesn't mean that we will get it automatically at approval, we still have to have the conversation with the big national payers. And then once we get through those clinical reviews over the course of a few months, they would make the decision whether to put ANNOVERA on nationally or cover just those lives in those states. But the regulations as they do have to cover it. So we just have to get through a process, but that process is just much shorter than BIJUVA and IMVEXXY. And the birth control category just holds the whole lot of leverage that gets it to the table.

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

And from a population standpoint, you asked how many states. So it is 19 states that is mandated coverage without a generic equivalent, but obviously, there is none here. I believe the copay free population is 42 million women. And I believe the rest of the states outside of that is another 25 million women, which is approximately 45% to 47% of the women of this age in the country. So it's not quite apt, let's say, 40%, 45%. So it's a great way to start really fast and the good thing is the national plans -- all plan, these are big states, California, Washington, Maryland, Illinois. So you just get a lot of leverage with the payers walking in especially with the 19th category for the other states looming over their heads. For those 19 states, this designation of the 19th method or category really will have no impact. But the other 31 states, it would. So it really pushes the payers to a table to get something done quickly. And so we feel really bullish on it.

Annabel Samimy -- Stifel -- Analyst

Okay, great. Thank you so much.

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

Thank you.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Jay Olson with Oppenheimer. Your line is now open.

Jay Olson -- Oppenheimer & Co -- Analyst

Hey, thanks for taking the question. I just wanted to follow up on comments you made regarding CVS and Aetna on your July 9th update, you indicated that they were not covering the majority of their plan designs and that you were in negotiations for opportunities to increase access. And now here we are less than a month later, it seems like you may have made some significant progress there. So I was wondering if there is any comments or any color you could add to what's going on with CVS and Aetna and your indication that there may be a commercial coverage decision coming this quarter?

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

Yeah, absolutely. So, it's just taken longer there and we're trying to get to a situation where it's acceptable for both sides. They've been actually pretty good and we're -- we like them. It's just taken a little bit longer than we thought. There's a lot going on over there with mergers and stuff. They did their preferreds, we didn't want preferred in the commercial side, but do want preferred on Part D. And we -- on the commercial side are the next group to go for non-preferred access. We do think we're in good shape there. I cannot guarantee we'll get it. I've had situations where we thought we're in great shape and once before a phone rang and they've decided not to go with us out of all of our payers. So it's not guaranteed, but we feel good about it. And we do believe that decision will be made this quarter.

Jay Olson -- Oppenheimer & Co -- Analyst

Great. Thank you for that color. And then also I just wanted if I could just follow up on ANNOVERA, most reported second quarter sales of $240 million, which were significantly higher than expected for NuvaRing. And I was wondering if the resilience that NuvaRing showed in the second quarter changes your view of the opportunity for ANNOVERA?

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

Jay, it's the beauty of that is vaginal rings are being accepted and significantly growing with women. Kind of the yuck factor that was there ten years ago is really gone. If a woman's not using it herself, she has a friend that uses it, all right. So now we're not for every vaginal ring user like we're not going to replace every IUD and every oral contraceptive. But we are for a cross-section of those women that have to have a long acting option and want control over 13 cycles or a full year of their fertility and their menses. And with that being said, I think we are positioned very well with NuvaRing's progress kind of blazing the trail for us and getting this vaginal category accepted for birth control. And we hope the differentiated products -- the differentiation of our product versus NuvaRing will attract a lot of those women over. But certainly not all of them. It's not for everybody. But as you can see with the numbers we put up. You just got a 1.5%. This is anywhere from a $400 million to a $700 million product per annum. And I tell you, that's not very -- it's not that big of a piece of that category. Anything to add Dawn.

Dawn Halkuff -- Chief Commercial Officer

Yeah, hi Jay. The only thing I would add is, it doesn't necessarily change our outlook. But there are two places that I like to see and gives me confidence in the ANNOVERA opportunity. One is the acceptance of the ring category, which so I feel confident that they continue to see strong sales. And the second is the growth of the long acting market and we continue to see that as well. And as Rob just mentioned, we sit right in the middle of that. So for me, it doesn't change the outlook, it just increases my confidence.

Jay Olson -- Oppenheimer & Co -- Analyst

Great. Thanks again for taking the questions.

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

Thanks, Jack.

Operator

Thank you. This concludes today's question and answer session. I would now like to turn the call back to Rob Finizio for closing remarks.

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

Thank you all for joining our Q2 call, and we look forward to following up with you next quarter. Thank you.

Operator

[Operator Closing Remarks]

Duration: 45 minutes

Call participants:

Nichol Ochsner -- Vice President, 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

Annabel Samimy -- Stifel -- Analyst

Jay Olson -- Oppenheimer & Co -- Analyst

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