TherapeuticsMD (NASDAQ:TXMD) investors are celebrating the FDA’s green light for its vaginal treatment Imvexxy, a drug designed as an applicator-free estradiol vaginal softgel capsule for the treatment of moderate-to-severe vaginal pain during sexual intercourse (dyspareunia).
For context, dyspareunia is a symptom of vulgar and vaginal atrophy (VVA), a symptom stemming from menopause. Notably, TXMD’s Imvexxy is the sole product in its therapeutic class that offers a 4mcg as well as a 10mcg dose, with the former dose posing forth the lowest approved dose of vaginal estradiol on the market. In reaction to the bullish victory, shares have been sent racing almost 6% this morning.
Cantor analyst William Tanner cheers “when the improbable becomes a reality.” Moreover, the analyst notes that details of the 4mcg and 10mcg dose launches along with a label carrying the estrogen class black box warning all seem to have been prematurely posted a week ago.
On the heels of the approval, the analyst reiterates an Overweight rating on TXMD stock with a $26 price target, which implies a 282% upside from current levels. (To watch Tanner’s track record, click here)
The win “sets the company on a course to bring two important therapies to the market for treating symptoms associated with menopause, in our opinion. With the approval, TXMD can access $75 million from the recently-struck loan agreement. The PDUFA date for TX-001, an investigational drug for treating vasomotor symptoms (VMS, aka, hot flushes) of menopause is October 28. If approved, 2018 should be regarded as the most important year in the company’s history, in our view,” asserts Tanner, who says to put it bluntly there is “nothing not to like” here.
“Given the drug’s review history and apparent market skepticism as to its approvability (e.g., the share valuation), the FDA’s decision should be viewed as a major event,” wagers Tanner, who highlights: “Approval of the two doses supports the notion that they are effective and we believe they foot well with the treatment recommendation of using the lowest effective dose. Perhaps taken up at a later date could be modification of the black box warning but we question whether the FDA was prepared to broach that subject now […]”
However, could prospective TX-001 approval “steal spotlight” from the triumph of Imvexxy’s launch? After all, bears can no longer trumpet the skeptical question of an FDA win here, and Tanner anticipates investors that remain bearish on TXMD may deem the launch of the asset underwhelming. Tanner’s bet: a win on TX-001 come October 28th, especially considering its bigger revenue prospects may eclipse just how “robustly” the Imvexxy launch transpires.
Bottom line, the expectations for Imvexxy do not seem to trip TXMD up for “failure” ahead. For this year, the analyst calls for $18.5 million in revenue, hitting $128 million by next year, against FactSet consensus calling for $21 million in 2018 and $160 million by 2019. Tanner projects Imvexxy can magnetize roughly 4,000 yearly VVA patients this year (out of around 2.6 million yearly) and around 130,000 by next year.
TipRanks indicates a strong bullish camp betting on TXMD stock. All 4 analysts polled in the last 3 months rate a Buy on TXMD stock. With a return potential of 133%, the stock’s consensus target price stands at $15.00.