Will TherapeuticsMD Inc (NYSEMKT:TXMD) succeed in achieving its objective
Boca Raton-based TherapeuticsMD Inc (NYSEMKT:TXMD) is a 5-year-old company. It has only just recently started trading on the NYSE under the ticker “TXMD”. It will be presenting at “The Jefferies 2013 Global Healthcare Conference”. This is slated to be held from 3-6 June 2013, in New York at the Grand Hyatt. Chief Executive Officer, Robert Finizio, will be presenting on 5 June.
With the dilemma of a low-market-valuation, money-losing distributor business model, the management as well as the company insiders had acquired VitaMed, a pharma company, and turned it into a wholly-owned subsidiary. TXMD had filed Investigational New Drug applications with the Food Drug Administration. The company has announced that it had received the nod to commence clinical trials on specific compounds.
An IND application allows the pharmaceutical company that is requesting permission to ship a particular experimental drug, across state lines, for testing, before the marketing application for it has received approval. The IND application is reviewed by the FDA which tests it for safety. Once the application is cleared, that candidate drug will generally move through to a Phase I clinical-trial.
The road ahead
The TherapeuticsMD Inc (NYSEMKT:TXMD)’s Management’s ultimate objective is to create a countrywide distribution network that will carry proprietary drugs that are used to address women’s health. The company focuses on HRT or Hormone Replacement Therapy products that are used in menopause. At a cursory glance, all of this seems very much like a sound business plan but in reality it is more of an idealistic one. Firstly, it is not possible for distribution companies to transform themselves overnight into completely-viable competitors against much larger multi-national drug companies that have exponentially experience and even more resources at their disposal.
Another glaring truth is that it is not very easy to gain approval for HRT drugs. The three compounds in the company’s drug-pipeline also have no issued patents right now. One more consideration is that TXMD is not a private company and thus does not really have the cash outlays for a transformation that is as bold as this one. In essence, it is going to be a while before things start looking-up for TherapeuticsMD.