TXMD stock lower as price target lowered at H.C. Wainwright on supply constraints

Citing the ongoing supply issues affecting a key product, H.C. Wainwright has trimmed the price target of the women’s healthcare company, TherapeuticsMD (TXMD -3.1%) on Friday.

After reporting worse-than-expected financials for Q4 2021, TherapeuticsMD (NASDAQ:TXMD) shares crashed on Wednesday.

During the quarter, the sales from the company’s top revenue generator, contraceptive vaginal system, Annovera plummeted ~14% YoY to $7.8M, driving a ~17% YoY decline in the topline that stood at $18.7M.

The analyst Douglas Tsao, who reiterated the Buy recommendation on the stock, calls the underperformance “a temporary setback,” as he points to issues impacting Annovera supply.

“TXMD is working to rectify these with the goal of meeting all demand by 2Q22, at which point the company expects it is going to be in position to provide revenue guidance,” the analyst wrote, noting strong underlying demand for the product.

During the earnings call, Chief Business Officer of TherapeuticsMD (TXMD) Mark Glickman noted that total prescriptions for Annovera climbed 11% QoQ and ~57% YoY.

If supply was adequate to fill the additional demand for 6K units, Annovera sales would have met or exceeded the firm’s $14.6M forecast, Tsao added.

However, arguing that supply constraints are expected to continue through Q1 2022, the analyst has lowered the per-share target for the stock to $2.50.

Commenting on challenges to Annovera sales, Chief Executive of TherapeuticsMD (TXMD) Hugh O’Dowd noted: “To be clear, our immediate challenge here is not about demand generation. But instead, it’s an issue of short-term supply and scale. We believe that this is a temporary event, which will be resolved by the end of Q1.”