Shares of TherapeuticsMD (TXMD 0.10%), a women's healthcare company, are on the rise following good news for its contraceptive device Annovera. Investors expecting more predictable cash flows have driven the stock 56% higher as of 1:06 p.m. EDT on Tuesday.
Annovera's a reusable contraceptive ring that contains two synthetic hormones -- segesterone acetate and ethinyl estradiol -- that prescription contraceptives have been using for a long time. Annovera remains inserted for three weeks and releases these two ingredients slowly before women need to remove and store the device for a week.
Annovera earned Food and Drug Administration (FDA) approval for its yearlong birth-control device in 2018, but so far, the launch has been slow. Sales of the contraceptive reached an annualized $23 million in the fourth quarter of 2019, which worked out to 36% of TherapeuticsMD's total revenue during the period.
Each Annovera ring is approved to be reused for an entire year's worth of four-week cycles, and this prescription contraceptive tool from TherapeuticsMD will probably be the only one that can make this claim for years to come. The newly issued patent provides U.S. patent protection for Annovera until 2039.
At the very least, it will allow TherapeuticsMD to keep potential competitors tied up in court for years while sales of the contraceptive keep rising.