EVOFEM BIOSCIENCES, INC. The terms "we," "us," "our," "Evofem" or the "Company" refer collectively toEvofem Biosciences, Inc. and its wholly-owned subsidiaries, unless otherwise stated. All information presented in this quarterly report on Form 10-Q (Quarterly Report) is based on our fiscal year. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years endingDecember 31 and the associated quarters, months and periods of those fiscal years. You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. For 26 -------------------------------------------------------------------------------- Table of Contents additional context with which to understand our financial condition and results of operations, see the audited consolidated financial statements and accompanying notes contained therein as ofDecember 31, 2020 and 2019 and related notes in the Company's Annual Report on Form 10-K as filed with theSEC onMarch 4, 2021 (2020 Audited Financial Statements). This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. The actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under Item 1A of Part I of the 2020 Audited Financial Statements. Unless otherwise defined in this section, the defined terms in this section have the meanings set forth in the 2020 Audited Financial Statements. Overview We are aSan Diego -based commercial-stage biopharmaceutical company committed to developing and commercializing innovative products to address unmet needs in women's sexual and reproductive health. Our first commercial product, Phexxi® (lactic acid, citric acid, and potassium bitartrate) vaginal gel (Phexxi), was approved by theUnited States (U.S.) Food and Drug Administration (FDA) onMay 22, 2020 and commercially launched inthe United States inSeptember 2020 . Phexxi is the first and only FDA approved hormone-free, woman-controlled, on-demand prescription contraceptive gel for women. We are conducting a pivotal Phase 3 clinical trial to evaluate our lead product candidate, EVO100 (L-lactic acid, citric acid, and potassium bitartrate) vaginal gel (EVO100), for the prevention of urogenital transmission of both Chlamydia trachomatis infection (chlamydia) and Neisseria gonorrhoeae infection (gonorrhea) in women. We refer to this trial as "EVOGUARD".
Phexxi: Our Non-hormonal, On-Demand Birth Control
We commercially launched Phexxi inSeptember 2020 with a sales force promoting Phexxi directly to obstetrician/gynecologists and their affiliated health professionals, who collectively write the majority of prescriptions for contraceptive products. Our sales force comprises approximately 69 regional sales representatives and business managers, supported by a self-guided virtual health care provider (HCP) learning platform. Additionally, we offer women direct access to Phexxi via our telehealth platform where women can directly meet with an HCP to determine their eligibility for a Phexxi prescription and potentially have it written by the HCP, filled, and mailed directly to them by a third party pharmacy. Our comprehensive commercial strategy for Phexxi includes marketing and product awareness campaigns targeting women inthe United States of reproductive potential, including the approximately 23 million women who are not using hormonal contraception and the approximately 18.8 million women who are using a prescription contraceptive, some of whom, particularly pill users, may be ready to move to an FDA-approved, non-invasive hormone-free contraceptive, as well as certain identified target HCP segments; payer outreach; and execution of our consumer digital and media strategy. According to our post-commercial launch market research, HCPs indicated they would recommend Phexxi to approximately 60% of patients who are currently using natural contraceptive methods, approximately 58% of patients who are currently using over-the-counter contraceptive products and approximately 26% of patients who are currently using prescription contraception or methods requiring an HCP to perform a procedure. Additional research into the demographics of more than 1,300 women who are using Phexxi reveals that 60% of Phexxi users are between the ages of 18 to 34 years of age. Among the subset of Phexxi users for whom prior contraceptive data is available (n=413), 39% of women who had recently started Phexxi switched over from either an oral contraceptive, hormone patch/ring, or long-acting reversible contraception. InDecember 2020 twoU.S. patents that cover Phexxi and its labeled indication were listed in theU.S. FDA publication Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. The Orange Book listing of these two patents covering Phexxi's composition of matter and its method of use in prevention of pregnancy is an important step in the ongoing development of our patent portfolio, which currently covers Phexxi into 2033. The newly listed method of use patent, number 10,568,855 (the '855 patent), covers contraception using the L-lactic acid Phexxi formulation. The '855 patent was issued by theU.S. Patent and Trademark Office (USPTO) onFebruary 25, 2020 and is expected to expire inMarch 2033 . The newly listed patent number 6,706,276 (the '276 patent) is a composition of matter patent covering Phexxi. Evofem has an exclusive license to this patent, which is held byRush University Medical Center (Rush University ). The '276 patent was issued by the USPTO onMarch 16, 2004 and is expected to expire inMarch 2026 if the five-year patent term extension (PTE) application that was timely filed by the patent owner is granted. The patents we licensed fromRush University expired inMarch 2021 outsidethe United States and are currently set to expire inMarch 2022 insidethe United States pursuant to an Order Granting Interim Extension that extended the expiration of theU.S. patent. In 2020,Rush University submitted a PTE application for theU.S. patent requesting a five-year PTE to 2026. We have not yet been granted the PTE, and there is no assurance that it will be granted for the full five-year term, if at all. OnFebruary 14, 2021 , we launched a direct-to-consumer advertising campaign, known as "Get Phexxi," designed to increase awareness and educate women on the benefits of Phexxi. The campaign highlights some of the struggles women face 27 -------------------------------------------------------------------------------- Table of Contents when choosing among the many available methods of contraception, including the lack of control with condoms, constant daily use of the pill, and abstinence required for cycle tracking. OnSeptember 9, 2021 , we launched a national brand ambassador campaign featuring Emmy® Award-winning celebrityAnnie Murphy designed to broaden awareness and drive uptake of Phexxi. We believe early metrics demonstrate that this campaign, called "House Rules," is effectively reaching our target audience, especially women who are beyond hormones. ThroughSeptember 30, 2021 , the "House Rules" DTC campaign has resulted in a 263% increase in visitors to Phexxi.com, and impacted key metrics including: •A 71% increase in ex-factory sales of Phexxi (unit shipments to wholesalers) in September versusAugust 2021 . •More than 5,100 women have begun using Phexxi since the launch of the "House Rules" campaign, driving a 56% increase in new patient starts in September versusAugust 2021 . •More than 2,800 women booked telehealth visits in the first three weeks of the campaign, a 4x increase over the three-week period pre-launch. •More than 8,900 Phexxi units were dispensed inSeptember 2021 , a 41% increase over the prior month, and total monthly prescriptions grew 45% to 7,839. •34% increase in new healthcare providers prescribing Phexxi in September versusAugust 2021 . Over 9,400 healthcare providers have written Phexxi since the product launched inSeptember 2020 . We are also collaborating with theNational Community Oncology Dispensing Association, Inc. (NCODA), an educational platform for community and academic oncology practices nationwide, to positively impact the quality of life for female patients living with, fighting and recovering from cancer by raising awareness about the importance and availability of Phexxi as a birth control option. Every year inthe United States , more than 800,000 new cases of cancer are reported among women, and many cancer treatment protocols require female patients of reproductive potential to use birth control while undergoing treatment. Until the introduction of Phexxi, non-hormonal prescription contraception options were starkly limited; previously, women were generally steered toward condoms or the copper IUD, a prescription medical device that is implanted in the uterus where it releases copper ions and can cause inflammation. We are working together with NCODA to develop and share resources and educational information for the medically-integrated oncology pharmacy team to help support female cancer patients in deciding which contraceptive option best meets each woman's unique, individual needs. InMay 2021 , the NCODA published a Positive Quality Intervention (PQI) in connection with Phexxi, and inJuly 2021 , our Chief Executive Officer and Phexxi were featured on NCODA's PQI Podcast. PQIs are part of the NCODA Quality Standards. These resources are designed to operationalize and standardize practices to achieve positive outcomes for patients. Additionally, our Chief Executive Officer delivered the keynote address at the NCODA 2021National Spring Forum , and two posters on data sets presenting relevant aspects of the Phase 3AMPOWER trial evaluating Phexxi were presented at the conference. We continue working to increase the number of lives covered and to gain preferred formulary position for Phexxi. As ofOctober 2021 , 70% of Phexxi prescriptions are being approved either by payers or through Evofem patient support programs. We have coverage for approximately 55% ofU.S. commercial lives, including approximately 9 million lives covered at no out-of-pocket cost and approximately 13.7 million lives covered under ourDecember 2020 contract award from theU.S. Department of Veterans Affairs . OnJanuary 1, 2021 , theU.S. Medicaid population gained access to Phexxi through our participation in the Medicaid National Drug Rebate Program. Medicaid provides health coverage to approximately 68 million members, including approximately 16.8 million women 19-49 years of age. Phexxi is classified in the databases and pricing compendia of Medi-Span andFirst Databank , two major drug information databases that payers consult for pricing and product information, as the first and only "Vaginal pH Modulator." We continue to work with theFDA's Office of Women's Health to update its Birth Control Guide to include a new category for vaginal pH modulators, as the current guide does not have a place for Phexxi due to its unique mechanism of action. We believe this update would require payers (including pharmacy benefit managers) to cover the Phexxi at no cost to patients. We are also working with elected officials inWashington D.C. to encourage updating the guidance regarding contraception coverage, as the guidance has not kept up with innovations like Phexxi. To support those initiatives, we have launched a grassroots coalition that shows the public's support of the need for updating the chart and guidance.
EVO100: Our STI Preventive Product Candidate
Our lead product candidate, EVO100, is a vaginal gel under evaluation for the prevention of chlamydia and gonorrhea in women - two of the most pervasive sexually transmitted infections (STIs) inthe United States . Currently, there are no FDAapproved prescription products for the prevention of either of these common STIs. 28 -------------------------------------------------------------------------------- Table of Contents According to theCenters for Disease Control and Prevention (CDC ), any sexually active person can be infected with chlamydia or gonorrhea. Despite theCDC recommendation for condom use to prevent STIs,U.S. rates of infection with chlamydia and gonorrhea climbed in 2019 for the sixth consecutive year. Based on these reports, an estimated 78 million women 18-65 years of age who are sexually active inthe United States could be at risk to contract these STIs. Based on the positive and statistically significant top-line results of our Phase 2B/3 AMPREVENCE trial, we initiated our Phase 3 EVOGUARD clinical trial inOctober 2020 . This randomized, placebo-controlled pivotal trial is designed to enroll 1,730 women with a prior chlamydia or gonorrhea infection and who are at risk for future infection. Participants are enrolled for a 16-week interventional phase followed by a one-month follow-up period. We expect to complete enrollment in the first quarter of 2022 and to report top-line EVOGUARD results in the third quarter of 2022. Assuming positive results from the trial, we expect to submit a supplemental New Drug Application for EVO100 in the first quarter of 2023.
The FDA has granted Fast Track designations to EVO100 for the prevention of chlamydia and gonorrhea in women. The FDA has designated EVO100 a Qualified Infectious Disease Product for the prevention of gonorrhea in women, which provides several important potential advantages, including longer market exclusivity.
Financial Operations Overview Net Product Sales Our revenue recognition is based on unit shipments from our third-party logistics warehouse to our customers, which consist of wholesale distributors, retail pharmacies, and a mail-order specialty pharmacy. We have recognized net product sales inthe United States since the commercial launch of Phexxi inSeptember 2020 ; the quarter endedSeptember 30, 2021 was our fourth full quarter of product sales. For the quarter endedSeptember 30, 2021 , shipments to wholesale distributors and pharmacies grew significantly compared to the quarter endedJune 30, 2021 , driving an approximate 29% increase in gross revenues. Phexxi outperformed the newer branded contraceptive market over the summer months and the launch of our "House Rules" campaign onSeptember 9, 2021 has increased Phexxi awareness, consideration, and prescriptions. Gross revenues, as discussed in Note 3- Revenue , were adjusted for variable consideration, including our patient support programs. We intend to out-license commercialization rights for Phexxi to one or more pharmaceutical companies or other qualified potential partners for countries or regions outside ofthe United States . We are currently in discussion with potential partners for various geographies. We cannot forecast when or if these arrangements will be secured, the structure or potential amount of revenues from these arrangements, whether upfront, milestone-related or related to future Phexxi sales (assuming approval of Phexxi for commercial sale outside ofthe United States ) or to what degree these arrangements would affect our development plans, future revenues and overall capital requirements.
Cost of Goods Sold
The Company began to capitalize the inventory costs associated with Phexxi inApril 2020 when it was determined that this inventory had a probable future economic benefit. These inventory costs include all purchased materials, direct labor and manufacturing overhead. Prior toApril 2020 , costs incurred for the manufacture of Phexxi were recorded as research and development expenses. In addition, we are obligated to pay quarterly royalty payments pursuant to our license agreement withRush University , in amounts equal to a single-digit percentage of the gross amounts we receive on a quarterly basis less certain deductions incurred in the quarter based on a sliding scale. We are also obligated to pay a minimum annual royalty amount of$100,000 to the extent these earned royalties do not equal or exceed$100,000 in a given year. A minimum annual royalty amount of$100,000 was first required for the annual period commencing onJanuary 1, 2021 . This royalty was approximately$0.1 million and$0.2 million for the three and nine months endedSeptember 30, 2021 , respectively, and was included in the costs of goods sold in the condensed consolidated financial statements. 29 -------------------------------------------------------------------------------- Table of Contents Operating Expenses
Research and development expenses
Our research and development expenses primarily consist of costs associated with the clinical development of EVO100 and costs associated with the continuous improvements related to Phexxi commercialization efforts. These expenses include: •external development expenses incurred under arrangements with third parties, such as fees paid to clinical research organizations (CROs) relating to our clinical trials, costs of acquiring and evaluating clinical trial data such as investigator grants, patient screening fees, laboratory work and statistical compilation and analysis, and fees paid to consultants; •costs to acquire, develop and manufacture clinical trial materials, including fees paid to contract manufacturers; •costs related to compliance with drug development regulatory requirements; •continuous improvements of manufacturing and analytical efficiency; •on-going product characterization and process optimization; •back-up contract manufacturing organization's evaluation to support future commercial forecast and reduce cost of goods sold; •alternative raw material evaluation to secure an uninterrupted supply chain and reduce cost of goods sold; •employee-related expenses, including salaries, benefits, travel and noncash stock-based compensation expense; and •facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and research and other supplies.
We expense internal and third-party research and development expenses as incurred. The following table summarizes research and development expenses by product candidate (in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Allocated third-party development expenses: EVO100 for prevention of chlamydia/gonorrhea- Phase 3 (EVOGUARD)
$ 6,890
- 17 - (10)
Phexxi for the prevention of pregnancy (AMPOWER) - 2 - (14)
Total allocated third-party development expenses 6,890 1,405 17,078 1,505
Unallocated internal research and development
expenses:
Noncash stock-based compensation expenses 160 291 1,122 1,689
Payroll and related expenses 1,048 1,438 3,988 3,539
Outside services costs 275 705 1,291 3,343
Other 328 378 991 1,028Total unallocated internal research and development expenses
1,811 2,812 7,392 9,599
Total research and development expenses $ 8,701 Completion dates and costs for our clinical development programs may vary significantly for EVO100 and any future product candidate we may seek to develop and are difficult to predict. We anticipate that we will determine which programs and product candidates to pursue as well as the most appropriate funding allocations for each program and product candidate on an ongoing basis in response to the results of ongoing and future clinical trials, regulatory developments, and our ongoing assessments of the commercial potential of each current or future product candidate. We expect research and development expenses to increase significantly in 2021 compared to 2020 primarily due to EVOGUARD, which was initiated inOctober 2020 . We will need to raise significant additional capital in the future to complete clinical development for EVO100 and any future product candidates.
The costs of clinical trials may vary significantly over the life of a program owing to the following:
•per patient trial costs;
•the number of sites included in the trials;
•the length of time and level of marketing required to enroll eligible patients;
•the number of patients participating in the trials;
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•the number of doses patients receive;
•potential additional safety monitoring or other trials requested by regulatory
agencies;
•the phase of development of the product candidate; and
•the efficacy and safety profile of the product candidate.
Selling and marketing expenses
Our selling and marketing expenses consist primarily of Phexxi commercialization costs, including direct-to-consumer (DTC) and HCP advertising, the Phexxi telehealth platform, our sample program, training, salaries, benefits, travel, noncash stock-based compensation expense, and other related costs for our employees and consultants. We expect our selling and marketing expenses to be significantly higher in 2021 compared to 2020 due to the cost of our sales force, which was established in the third quarter of 2020, and as we continue Phexxi promotional strategies, including all DTC marketing initiatives.
General and administrative expenses
Our general and administrative expenses consist primarily of salaries, benefits, travel, business development expense, investor and public relations expenses, noncash stock-based compensation, and other related costs for our employees and consultants performing executive, administrative, finance, legal and human resource functions. Other general and administrative expenses include facility-related costs not otherwise included in research and development or selling and marketing, and professional fees for accounting, auditing, tax and legal fees, and other costs associated with obtaining and maintaining our patent portfolio.
We expect our general and administrative expenses to decrease slightly in 2021 compared to 2020 due to lower recruiting fees, financing advisory fees, and payroll and related expenses.
Other Income (Expense)
Other income (expense) consists primarily of interest expense and the change in fair value of financial instruments issued in various capital raise transactions. The change in fair value of financial instruments was recognized as a result of mark-to-market adjustments for those financial instruments.
Results of Operations
Three Months EndedSeptember 30, 2021 Compared to Three Months EndedSeptember 30, 2020 (in thousands): Net Product Sales Three Months Ended September 30, 2021 vs. 2020 2021 2020 $ Change % Change Product sales, net$ 1,712 $ 278 $ 1,434 516 %
Phexxi was commercially launched in
Cost of Goods Sold
Three Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Cost of goods sold $ 955 $ 317 $ 638 201 %
The increase in cost of goods sold was primarily due to a full quarter of sales in the current period versus one month of sales in the prior year period.
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Research and development expenses
Three Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Research and development $ 8,701 $ 4,217 $ 4,484 106 %
The increase in research and development expenses was primarily due to a $5.5
million increase in clinical trial costs associated with EVOGUARD. This increase
was partially offset by a $0.4 million decrease in payroll and related expenses
due to lower headcount, a $0.4 million decrease in outside services associated
with manufacturing related activities, and a $0.1 million decrease in noncash
stock-based compensation.
Selling and marketing expenses
Three Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Selling and marketing $ 30,468 $ 14,700 $ 15,768 107 %
The increase in selling and marketing expenses was primarily due to a $13.8
million increase in media and marketing costs related to ongoing promotional
strategies, especially those focused on DTC campaigns that commenced in 2021, a
$1.7 million increase in payroll and related expenses due to increased headcount
and sales activities in the field, $0.5 million in the Phexxi sample program,
and a $0.3 million increase in facilities costs. These aggregated increases were
partially offset by a $0.5 million decrease in costs for outside services
associated with marketing and medical affairs activities.
General and administrative expenses
Three Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
General and administrative $ 4,957 $ 7,200 $ (2,243) (31) %
The decrease in general and administrative expenses was primarily due to a $1.2
million decrease in financing advisory fees and legal fees, a $0.6 million
decrease in outside services primarily related to recruiting, a $0.5 million
decrease in payroll and related expenses due to lower headcount, and a $0.3
million decrease in noncash stock-based compensation. These aggregated decreases
were partially offset by a $0.3 million increase in facilities costs.
Total other income (expense), net
Three Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Total other (expense) income, net $ (30,692) $ (3,741) $ (26,951) 720 %
Total other expense, net, for the three months ended September 30, 2021 ,
primarily included $1.2 million in interest expense related to the convertible
senior secured promissory notes issued to Baker Bros . Advisors LP (the Baker
Notes) and the unsecured convertible promissory notes issued to each of Adjuvant
Global Health Technology Fund, L.P. and Adjuvant Global Health Technology Fund
DE, L.P. (the Adjuvant Notes) as described in Note 5- Convertible Notes and
a $29.5 million loss from the change in fair value of the Baker Notes as a
result of mark-to-market adjustments during the current quarter.
Total other expense, net, for the three months ended
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Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30,
2020 (in thousands):
Net Product Sales
Nine Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Product sales, net $ 4,674 $ 278 $ 4,396 1,581 %
Phexxi was commercially launched in September 2020 . The increase in product
sales, net was primarily due to a full nine months of sales in the current
period versus one month of sales in the prior year period, continued growth in
ex-factory unit sales since commercial launch, and an increase in both gross and
net sales from the impact of Phexxi promotional strategies and gross-to-net
initiatives implemented since commercial launch.
Cost of Goods Sold
Nine Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Cost of goods sold $ 2,300 $ 317 $ 1,983 626 %
The increase in cost of goods sold was primarily due to a full nine months of sales in the current period versus one month of sales in the prior year period.
Research and development expenses
Nine Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Research and development $ 24,470 $ 11,104 $ 13,366 120 %
The increase in research and development expenses was primarily due to a $15.4
million increase in clinical trial costs associated with EVOGUARD, and a $0.5
million increase in payroll and related expenses due to increased headcount to
support clinical and regulatory activities. These aggregated increases were
partially offset by a $1.9 million decrease in outside services associated with
manufacturing and regulatory related activities and a $0.6 million decrease in
noncash stock-based compensation.
Selling and marketing expenses
Nine Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Selling and marketing $ 88,230 $ 32,553 $ 55,677 171 %
The increase in selling and marketing expenses was primarily due to a $45.3
million increase in media and marketing costs related to ongoing promotional
strategies especially those focused on DTC campaigns that commenced in 2021, a
$9.7 million increase in payroll and related expenses due to increased headcount
and sales activities in the field, $1.7 million in the Phexxi sample program,
and a $1.7 million increase in facilities costs. These aggregated increases were
partially offset by a $2.8 million decrease in costs for outside services
associated with marketing, market access and medical affairs activities, and a
$0.4 million decrease in noncash stock-based compensation.
General and administrative expenses
Nine Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
General and administrative $ 19,057 $ 24,077 $ (5,020) (21) %
The decrease in general and administrative expenses was primarily due to a $2.6
million decrease in noncash stock-based compensation, a $1.9 million decrease in
financial and recruiting related outside services, a $1.4 million decrease in
financing advisory fees and legal fees, and a $0.3 million decrease in payroll
and related expenses due to lower headcount. These aggregated decreases were
partially offset by a $1.0 million increase in facilities costs.
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Total other income (expense), net
Nine Months Ended September 30, 2021 vs. 2020
2021 2020 $ Change % Change
Total other (expense) income, net $ (24,244) $ (33,936) $ 9,692 (29) %
Total other expense, net, for the nine months ended September 30, 2021 ,
primarily included $3.5 million in interest expense related to the Baker Notes
and the Adjuvant Notes as described in Note 5- Convertible Notes and a $20.7
million loss from the change in fair value of the Baker Notes as a result of
mark-to-market adjustments in the first half of 2021.
Total other expense, net, for the nine months ended September 30, 2020 , mainly
included a $64.0 million loss on issuance of convertible notes, warrants and
purchase rights issued in connection with the Baker Notes, and $1.0 million in
accrued interest expense related to the Baker Notes and the Adjuvant Notes. This
loss was partially offset by a $31.0 million gain from the change in fair value
of the Baker Notes as a result of mark-to-market adjustments.
Liquidity and Capital Resources
Overview
As ofSeptember 30, 2021 , we had a working capital deficit of$39.8 million and an accumulated deficit of$809.1 million . We have financed our operations to date primarily through the issuance of common stock and warrants, cash received from private placement transactions, the issuance of convertible notes and, to a lesser extent, product sales. As ofSeptember 30, 2021 , we had approximately$14.9 million in cash and cash equivalents, and$9.0 million in restricted cash from the Adjuvant Notes that is available for use. Our cash and cash equivalents include amounts held in checking accounts, money market funds, and investments in fixed income debt securities with original maturities of less than three months. We invest cash in excess of immediate requirements in accordance with our investment policy, which limits the amounts we may invest in any one type of investment and requires all investments held by us to maintain minimum ratings from Nationally Recognized Statistical Rating Organizations so as to primarily achieve liquidity and capital preservation. We have incurred losses and negative cash flows from operating activities since inception. During the nine months endedSeptember 30, 2021 , we received net proceeds of approximately$81.5 million upon the sale and issuance of common stock and warrants to purchase common stock from two underwritten public offerings that occurred in March and May of 2021. InOctober 2021 , we received net proceeds of approximately$9.7 million from a registered direct offering. We anticipate that we will continue to incur net losses for the foreseeable future. We expect research and development expenses to be significantly higher in 2021 compared to 2020 due to our Phase 3 EVOGUARD study, which was initiated inOctober 2020 . We expect selling and marketing expenses to increase significantly in 2021 compared to 2020 due to the deployment of our commercial sales force that was established in the third quarter of 2020 and as we execute associated promotional strategies and initiatives, including our DTC programs. Lastly, we expect general and administrative expenses to decrease slightly in 2021 compared to 2020 due to lower recruiting fees and financing advisory fees. We currently expect our liquidity resources as ofSeptember 30, 2021 together with the net proceeds of the registered direct offering completed inOctober 2021 , to be sufficient to fund our planned operations into the first quarter of 2022. The uncertainties associated with our ability to obtain additional equity financing on terms that are favorable to us or at all, enter into collaborative agreements with strategic partners, and succeed in our future operations raise substantial doubt about our ability to continue as a going concern. In addition, the COVID-19 pandemic caused us to delay the commercial launch of Phexxi untilSeptember 2020 . Also, due in part to the impact of the COVID-19 pandemic, the completion of enrollment in the Phase 3 EVOGUARD study is now expected in the first quarter of 2022 and we expect to report top-line EVOGUARD results in the third quarter of 2022. Our ability to raise additional funds, and the terms on which those funds may be raised, will be dependent, in part, on how successful the commercialization of Phexxi is, whether we are able to gain revenue traction prior to raising such additional funds, and the success of our research and development efforts, including our ability to develop EVO100. If the COVID-19 pandemic continues to disrupt and negatively impact the commercialization of Phexxi or our research and development efforts, our ability to raise additional funds may be negatively impacted, or we may not be able to obtain funding on terms favorable to us or at all. If we are not able to obtain required additional funding when and as needed, through equity financings or other means, or if we are unable to obtain funding on terms favorable to us, the shortfall in funds raised, or such unfavorable terms, will likely have a material adverse effect on our operations and strategic plan for future growth. If we cannot successfully raise the funding necessary to implement our current strategic plan, we may be forced to make reductions in spending, suspend or terminate development programs, extend payment terms with suppliers, liquidate assets where possible, suspend or curtail planned programs, and/or cease operations. Any of these developments would materially and adversely affect our financial 34 -------------------------------------------------------------------------------- Table of Contents condition and business prospects and could even cause us to be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate our assets and, in doing so, we may receive less than the value at which those assets are carried on our financial statements. Any of these developments would materially and adversely affect the price of our stock and the value of your investment. The opinion of our independent registered public accounting firm on our audited financial statements as of and for the years endedDecember 31, 2020 and 2019 contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Future reports on our financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. Our unaudited condensed consolidated financial statements as ofSeptember 30, 2021 and for three and nine months endedSeptember 30, 2021 and 2020 included in this Quarterly Report do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should we be unable to continue our operations.
2021 Equity Financings
As described in Note 10- Stockholders' Equity (Deficit) , we received proceeds of approximately$28.0 million , net of underwriting discounts, from a public offering inMarch 2021 , upon the issuance of 17,142,857 shares of our common stock, and approximately$4.2 million , net of underwriting discounts, from the issuance of 2,571,428 shares of common stock upon exercise of the underwriters' overallotment option inApril 2021 . As described in Note 10- Stockholders' Equity (Deficit) , we received proceeds of approximately$46.8 million , net of underwriting discounts and fees, from a public offering inMay 2021 , upon the issuance of 50,000,000 shares of common stock and common warrants to purchase 50,000,000 shares of common stock. We received approximately$2.4 million and$0.1 million , both net of underwriting discounts, from the issuance of 2,547,794 shares of common stock and 7,500,000 common warrants, respectively, upon exercise of the underwriter's overallotment option inMay 2021 .
As described in Note 10- Stockholders' Equity (Deficit) , we received
proceeds of approximately
2020 Debt and Equity Financing
As described in Note 5- Convertible Notes , we received aggregate gross proceeds of$25.0 million upon the first and second closings of convertible senior secured promissory notes pursuant to the Securities Purchase and Security Agreement with certain affiliates ofBaker Bros .Advisors LP as purchasers during the second quarter of 2020. We also received gross proceeds of$25.0 million from the closing of convertible unsecured promissory notes pursuant to the Adjuvant Purchase Agreement during the fourth quarter of 2020. As described in Note 10- Stockholders' Equity (Deficit) , we received net aggregate proceeds of$103.7 million inJune 2020 upon the issuance and sale of 31,700,000 shares of our common stock from our 2020 Public Offering and net aggregate proceeds of$3.8 million during the first half of 2020 upon the issuance and sale of 676,656 shares of our common stock pursuant to the "at the market" (ATM) program. The ATM program was terminated inJune 2020 .
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