TherapeuticsMD (TXMD) risk factors, FY2024 10-K

Risks related to our business

1. 01We currently derive all revenue from royalties related to sales of our licensed women’s healthcare products, and the failure of our licensees to maintain or increase sales of these products could have an adverse effect on our business, financial condition, results of operations, and growth prospects
2. 02We have incurred net losses in the past and there are no assurances we will be able to maintain or increase profitability in the future
3. 03There is substantial doubt about our ability to continue as a going concern
4. 04We have experienced significant turnover in our top executives, and our business could be adversely affected by these and other transitions in our senior management team
5. 05Our dependence upon third parties for the manufacture and supply of our existing women’s healthcare products may cause delays in or prevent our licensees from successfully commercializing and marketing our products
6. 06The commercial success of our existing products will depend upon gaining and retaining significant market acceptance of these products among physicians and payers
7. 07Coverage and reimbursement may not be available for our products, which could make it difficult for our licensees to sell our products profitably
8. 08The availability of generic products at lower prices than branded products may substantially reduce the likelihood of reimbursement for branded products, such as IMVEXXY, BIJUVA, and ANNOVERA
9. 09Time and costs associated with winding down our general and administrative, commercial, and research and development activities may be significant
10. 10We sublease our properties, which could expose us to possible liabilities and losses
11. 11Unfavorable global economic conditions could harm our business, financial condition or results of operations
12. 12Licensing of intellectual property involves complex legal, business, and scientific issues, and disputes could jeopardize our rights under such agreements
13. 13Our revenue, results of operations and financial position could be affected by our ongoing disputes with Mayne Pharma
14. 14We maintain our cash at financial institutions, often in balances that exceed federally insured limits
15. 15Our products and our licensees are subject to extensive and costly government regulation
16. 16Current or future legislation or regulations may adversely affect reimbursement from government healthcare programs and third-party payers
17. 17Even after the approval of IMVEXXY, BIJUVA, and ANNOVERA, the products and the holder of the marketing authorizations will still face extensive, ongoing regulatory requirements and review, and the products may face future development and regulatory difficulties
18. 18Recent government enforcement has targeted pharmaceutical companies for violations of fraud, abuse and other laws
19. 19We cannot ensure that ours or our licensee’s compliance controls, policies, and procedures will be sufficient to protect against acts of ours or their employees, business partners, licenses, or vendors that may violate federal or state fraud and abuse laws or other applicable requirements
20. 20If our dietary supplement, hormone therapy pharmaceutical products or patient-controlled, long-acting contraceptive products do not have the effects intended or cause undesirable side effects, our business may suffer
21. 21Our products face significant competition from branded and generic products, and our operating results will suffer if we fail to compete effectively
22. 22Our future success depends on our ability to attract and retain qualified personnel
23. 23Our business may be impacted by any future pandemics or epidemics. The severity of the impact of any pandemic on our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted
24. 24Also, disruptions have occurred and may occur in the future that affect our licensees’ ability to obtain supplies or other components for our products, manufacture additional products, or deliver inventory in a timely manner. This would result in lost sales (and royalties) and damage to our reputation
25. 25Our success is tied to our licensees’ distribution channels
26. 26As of December 31, 2024, we had federal net operating loss (“NOL”) carryforwards of $579.0 million. Subject to applicable limitations, our NOL may be used to offset future taxable income, to the extent we generate any taxable income, and thereby reduce our future federal income taxes otherwise payable
27. 27Any failure of our licensees to adequately maintain a sales force or adequately promote our products will impede our growth
28. 28The announcement and pendency of Mayne Pharma Group’s agreement to be acquired by Cosette Pharmaceuticals, Inc. could have an adverse effect on our business, operations, and financial condition

Risks related to our intellectual property

1. 29If our efforts or the efforts of our licensees to protect the proprietary nature of the intellectual property covering our hormone therapy pharmaceutical products and other products are not adequate, we may not be able to compete effectively in our market
2. 30We must rely on Mayne Pharma to file lawsuits or take other actions to protect or enforce our patents and there can be no assurance they will take such actions or be successful

Risks related to ownership of our common stock

1. 31We may be treated as a “public shell” company which could have negative consequences, including potential Nasdaq delisting of our common stock
2. 32Our principal stockholder owns a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval
3. 33If we fail to maintain proper internal controls, our ability to produce accurate financial statements or comply with applicable regulations could be impaired
4. 34We do not currently intend to pay dividends on our common stock so any returns may be limited to the value of our stock
5. 35Some provisions of our charter documents and Nevada law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders and may prevent attempts by our stockholders to replace or remove our current management
6. 36Our business may be affected by unfavorable publicity or lack of consumer acceptance
7. 37Our licensees may initiate product recalls or withdrawals or may be subject to regulatory enforcement actions that could negatively affect our business
8. 38Product liability lawsuits could divert our resources, result in substantial liabilities, and reduce the commercial potential of our products
9. 39A failure to maintain optimal inventory levels to meet commercial demand for our products could harm our and our licensees’ reputation and subject us to financial losses
10. 40Our business may be impacted by new or changing tax laws or regulations and actions by federal, state, and/or local agencies, or how judicial authorities apply tax laws
11. 41We may not be able to maintain effective and efficient information systems or properly safeguard our information systems
12. 42Our failure to comply with foreign data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results
13. 43Our employees and business partners may not appropriately secure and protect confidential information in their possession
14. 44Employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading
15. 45If we are sued for infringing intellectual property rights of third parties, litigation will be costly and time consuming and could prevent or delay us from developing or commercializing our pharmaceutical product candidates
16. 46If we are unable to protect the confidentiality of certain information, the value of our products and technology could be adversely affected
17. 47We may be subject to claims that our former employees wrongfully used or disclosed alleged trade secrets of their former employers or of other third parties with whom we have obligations of confidentiality
18. 48The market price of our common stock may be highly volatile, and you could lose all or part of your investment
19. 49If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
20. 50Future sales and issuances of equity securities, convertible securities or other securities could result in additional dilution of the percentage ownership of holders of our common stock