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AGRX: Initiating Coverage of Agile Therapeutics; NDA for Weekly Contraceptive Patch Set to Be Filed…

By David Bautz, PhD


We are initiating coverage of Agile Therapeutics, Inc. (NASDAQ:AGRX) with a $7.00 valuation. Agile is a women’s specialty healthcare company developing products to fulfill the unmet contraceptive needs of women. The company’s lead product, Twirla® (AG200-15), is a once-weekly low-dose combination hormonal contraceptive patch. Agile has conducted a comprehensive development program for Twirla® that includes three Phase 3 clinical trials, and the company will be resubmitting the new drug application (NDA) during the first half of 2017. We believe Twirla® has a number of positive attributes that are likely to lead to commercial success, including:

• Convenient Once-Weekly Application: The market leader for female hormonal contraception is the once-daily pill. The reason for its popularity has more to do with familiarity than with any significant advantage it has in terms of potency or superior safety profile. While effective, there are significant drawbacks regarding compliance associated with oral contraceptives, with studies showing that the average woman misses approximately two to four pills per month. Twirla® is a patch that is applied three times per month (once per week), thus instead of needing to remember to take a daily pill every day for three weeks, users of Twirla® need to just remember to apply a new patch once a week.

• Superior Tolerability Profile: Twirla® is a low-dose contraceptive patch, which translates into fewer adverse side effects as compared to hormonal contraceptive products that deliver higher doses of estrogen. The recently completed Phase 3 SECURE trial, which included 2032 women, showed the highest percent of adverse events were associated with headache (4.3%), nausea (4.1%), and breast tenderness (2.0%). In contrast, in the clinical trials for the Ortho Evra® patch, those same adverse events were experienced but a much higher percentage of subjects (headache = 21.0%; nausea = 16.6%; breast tenderness = 22.4%). 

• Real-World Efficacy Shown in Diverse Population: For the SECURE trial, the FDA requested that Agile have limited exclusion criteria and include women of all ethnicities, races, and body types. Previous contraceptive studies were typically conducted in a female population that was heavily skewed toward Caucasians with normal body mass indexes (BMIs). The SECURE trial population included a high percentage of subjects that were overweight (25%) or obese (35%). Results showed that the Pearl Index (PI), which is a measurement of the rate of pregnancies over a specific period of time in a clinical trial, was highly correlated with BMI. Those with a normal BMI (<25) had a PI of 3.03, while those that were overweight (BMI ≥ 25 - < 30) and obese (BM ≥ 30) had PIs of 5.36 and 6.42, respectively.

• Skinfusion Technology Superior to Other Patches: Agile has developed a proprietary patch technology, termed Skinfusion, that optimizes adhesion while delivering a steady stream of contraceptive hormones through the skin. The outer surface of the patch is made of a soft fabric, while the inner portion consists of several layers of material that contain the active ingredients ethinyl estradiol and levonorgestrel. The patch is designed to prevent seepage of the adhesive from around the edge, where it could collect dirt and leave a “black ring” on the skin, a frequent complaint from users of patches that do not utilize the Skinfusion technology. No royalties are owed to any third parties for the Skinfusion technology.

Agile reported $41.7 million in cash and cash equivalents at the end of the first quarter of 2017, which we believe is sufficient to fund operations into the second quarter of 2018. Assuming the NDA is resubmitted in the first half of 2017, with a six-month review Twirla® could be approved by the end of 2017. Agile will require additional capital for the commercial launch of Twirla®, which could be acquired through a number of different means, including a commercial partnership, the sale of equity, debt financing (Agile recently amended its loan and security agreement with Hercules Capital, Inc. that allows the company the opportunity to draw an additional $8.5 million until January 31, 2018), or royalty monetization. 


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